Start 2020 Off Right With a Business Books Clean Up

You may have started 2019 with goals of keeping your books in perfect order, but sometimes life gets in the way. Maybe you hired the wrong employee and they weren’t diligent about recording transactions. You might’ve changed banks mid-year and never reconciled the new account. Any number of setbacks can get your financial records out of whack. Take the time now to do a thorough business books clean up so you start 2020 on the right foot.

First, assess the problem.

There’s a mess, and then there’s a disaster. Slapping a few bandages on the problem may end up being more time-consuming in the long run. If you’re dealing with a few select entries over a specific time, it’s better to take the time to fix the errors. If it’s months and several categories of accounting errors, it may be faster to start over from scratch. Starting over has the advantage of letting you compare as you go. Create a new QuickBooks file separate from the old one. Then you can figure out where you went wrong so you don’t repeat the mistake.

  • Relink your accounts.
  • Reconcile your bank statements.
  • Record your transactions. This is the hard part. You’ll need to re-input all of your receipts and invoices. If you haven’t been keeping digital copies, that means wading through stacks of paper, which can be a total mess. Digitize them as you go so you can shred it and forget it. A small receipt scanner will help make quick work of your pile.

Some errors will jump right out at you. Start with the totals of your accounts receivable and accounts payable. This could indicate missing or duplicated entries. Update your invoices so you can begin to follow up on open accounts. You may be leaving money out there simply because you haven’t sent regular payment notices. Similarly, pay your vendors and all of your bills. Late fees are just money wasted and missed payments will hurt your business credit rating.

Determine if you have legal liability.

business books clean up

If the errors go back to the beginning of the year, then you’ll need to examine whether or not you paid correct tax estimates. If you’ve underpaid your taxes, you could be subject to fines. The mistakes may have been innocent, or maybe not, depending on who was in charge of your books at the time. It’s always possible that your books may be a mess because someone made them that way on purpose to cover criminal activity such as fraud or embezzlement.

Depending on how bad the books are, you may need to file an extension on your tax returns this year. If continuing to operate your business while you’re cleaning up accounting errors means that you won’t be able to file on time, then it’s better to pay the fees for filing an extension. Getting your return done right the first time is a better course of action than filing a faulty return and then amending it. If the IRS flags your return before you amend it, you could be open to an audit.

When all else fails, get help!

business books clean up

If you feel your books are too far gone to handle on your own, reach out for qualified help. There’s no mess that Prestige Bookkeeping can’t handle. Give us a call! [954-818-4922] We can help clean up your current mess to get you ready for tax season, and get new systems in place so that a similar situation never happens again.

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