When a company’s book are not in a desirable state and little confidence is placed in their accuracy, it’s time to get those books cleaned up. You can’t make sound business decisions when you don’t know if the numbers you see on your financial statements truly represent the performance of your business.
If you have ever thought to yourself, “My books are a mess!”, then it’s time that you seriously consider bringing in an experienced bookkeeper to sort things out. You could be hindering your business growth by relying on completely inaccurate financial statements.
During a cleanup, one of the first things an experienced bookkeeper will do is pull preliminary financial statements before they do any cleanup work. They will then request bank, credit card, loan, or mortgage statements. These documents will allow the bookkeeper to ensure that all of the transactions have been recorded in the accounting software and that there are no duplicates in those accounts. They will also request copies of insurance policies to get coverage dates and premium payment dates as well as the most recent tax return filed for the business.
From the preliminary financial statements, an experienced bookkeeper can get a sense if something is “off” and they can research it. They may find that transactions are mapped incorrectly and don’t appear in the correct section of the applicable financial statement or discover that it’s mapped to the wrong financial statement. Working in consultation with the business owner, an experienced bookkeeper will have plenty of questions as they work to understand the business and identify problem areas.
Your chart of accounts will be reviewed to make sure that accounts are set up properly, that there are not multiple occurrences of the same account, and that they are mapped correctly. Product and services lists will be reviewed to make sure these were set up properly and mapped correctly.
Making sure that all of your expenses have been assigned Payees will make your reports more effective. Making sure that payments received are assigned Customers, posted against invoices, and not just entered as a bank deposit will clear up your accounts receivable. The same is true for accounts payable – making sure that payments are posted against a bill and not just entered as a check or an expense.
Getting to Work
Cleanups, as you can see, are very time-consuming and they can be costly. Depending upon the availability of source documents and the response time between parties a cleanup project could take weeks, if not months. However, don’t let that be a deterrent to you getting your books in tip-top shape. The longer you wait, the worse your situation will become.
We here at Cape May Counting House are very experienced in conducting cleanups and work closely with you to make sure that your reports are presented as accurately as possible.
When you are ready to initiate a cleanup of your books, reach out to us and we would be happy to have a conversation to see if we are a good fit and tell you how we can help you!
Once Your Cleanup is Complete
A Cleanup is very involved as we try to tackle a lot of problem areas to get your books in order and as accurate as possible. Once your Cleanup is complete, there are two options to continue working with Cape May Counting House.
Our basic service, Reconcile, allows you to have your monthly bank, credit card, and loan statements reconciled. No other services are included in this option.
Now that your books are organized, you can boost your business up a notch with our Bookkeeper+ service. This option includes having an experienced bookkeeper handle your monthly bookkeeping, perform monthly reconciliations, perform a monthly financial statement analysis, work with you to identify specific metrics to monitor, help create workflows, provide training, and be available as a bookkeeping advisor.