Running a business gets busy, and bookkeeping can quickly fall behind. We’ve helped business owners who thought their books were fine until we looked closer and found incorrect balances, uncategorized transactions, payment processor issues, and old invoices affecting their reports. Here are five signs your books may need a clean up.
1. Your bank balance does not match your bookkeeping software
Your bookkeeping balances should match your actual bank and credit card statements.
If your software shows $15,000 in checking but your bank statement shows $11,500, something needs to be reviewed. You could have missing transactions, duplicates, or transactions recorded incorrectly.
2. You have transactions sitting in uncategorized accounts
Check accounts like Uncategorized Income and Uncategorized Expenses. If transactions are piling up there, they have not been properly classified and could be making your financial reports inaccurate.
3. Your Stripe or PayPal activity is not recorded correctly
If you accept payments through Stripe, PayPal, or another payment processor, make sure both your sales and processing fees are being recorded. For example, if a customer pays $1,000 and Stripe deposits $970 after a $30 fee, simply recording the $970 deposit as income can understate both your income and expenses. Your payment processor accounts should also be reviewed and reconciled individually.
4. Your Accounts Receivable has old invoices that should not be there
If your books show customers still owe you for invoices that were already paid, cancelled, or should have been written off, your Accounts Receivable may be inaccurate. Review older invoices and make sure payments, credits, and write offs are recorded correctly.
5. Your Balance Sheet has negative balances that do not make sense
Unexpected negative balances in asset accounts, such as your bank accounts or Accounts Receivable, are worth investigating. For example, if your books show a negative bank balance but there is actually money in the account, there may be missing or incorrectly recorded transactions.
If any of these sound familiar, it may be time for a bookkeeping clean up. We can help get your books accurate, organized, and back on track. Book a call to learn more about our services.
