6 QuickBooks Hacks You Can Use NOW To Clean Up Your Accounting FAST

One of the first things I tell ALL my clients is to keep an eye on their books. This is because accurate accounting is the most important thing you can do to keep your business running smoothly. So it’s no surprise that a lot of my clients come to me needing to clean up their accounting!

Now, what does it mean to “clean up accounting,” and how can you ensure that the numbers in your business always “add up?”

If you’re using QuickBooks as your accounting software, you’ve probably seen that there are a wide range of Quickbooks files. Every file will be completed slightly differently depending on who set up the data–and most importantly, who is currently managing your data.

Of course, it’s perfectly OK to outsource your bookkeeping to a family member, friend, an online virtual bookkeeper, or keep it in-house. If you have seemingly uncomplicated and uneventful transactions, this might seem like the best option. 

BUT, doing this can be worrisome if the person in charge is doing it wrong. (Not to mention could cost you, literally!)

Here’s the truth about bookkeeping and accounting…

QuickBooks is very user friendly. But ACCOUNTING is really easy to mess up. This is especially true if you don’t know what red flags you’re looking for in the first place (or the person managing your data doesn’t know, either)!

Now, if this is you right now, you’re not alone. A LOT of business owners don’t quite have the accounting thing down yet, never mind knowing how to clean up the accounting. And how can you know what you don’t know?

I’ve been working with and training clients on QuickBooks for years. Part of what I teach is a simple way to quickly assess where your numbers stand. It’s a quick way to run a quick little audit when you don’t have time for a deep-dive into your accounting. 

If you use these check-in tips regularly, they’ll save you a ton of bookkeeping stress in the future (especially at Tax Time)!

So today, I’ll show you how to quickly identify any red flags. This will help you isolate and identify entries that might have skewed your reports. It will also help you target fraud. Finally, you’ll be able to generate an estimate on “clean up” for your books, should you need it. 

If you put these tips into action, you can get an additional layer of protection for your bookkeeping, your accounting, AND your sanity. That’s because you’ll know the red flags to look out for, and what to do if you find any! 

So let’s clean up your accounting! I’ll show you where to look and what to look for when you open up QuickBooks.

Now, let’s start with the biggest indicator of your bookkeeping and accounting health: Your Balance sheet.

Your Balance sheet holds most of your business’ secrets. So let’s pull it up, go through this list of questions, and let’s review each of them one at a time. 

1. Do you have anything in your accounts receivable account (AR) that shouldn’t be there? If you have open AR on your balance sheet that is not actually outstanding, you could be potentially (and erroneously) DOUBLING your income on your P&L report. This means you could be increasing your tax liability and skewing your projections, which is a big-time lose-lose.

2. Do your undeposited funds clear each month? This is a common one when you have AR set up. It is complicated accounting, but one thing is for sure: this account NEEDS to be at zero most of the time. If there is a balance, this means some deposits were not applied to open collected funds. This puts you at risk of the same outcome as above (erroneously doubling your income, that is!). 

3. Is anything sitting in uncategorized assets? This is an often overlooked QBO glitch. It happens when expenses or transfer payments default into uncategorized assets, and it can be a major pain. NOTHING should be in “unrecognized assets.” If there is and it goes unnoticed, it translates into two issues. First, it understates your expenses. Second, it means you will also have to delete this transaction, re-enter it, and re-reconcile all previous months. 

4. All Asset & Liability Accounts should be positive. If any are negative, that is a red flag they need more attention.

Now, let’s look at the other big indicator of your bookkeeping health, your Profit and Loss report.

Pull up your Profit & Loss year to date and review the following:

5. Be sure to drill down your income. Are there any owners transfers, loans or refunds in income? If so, be sure to back these out to the proper accounts. If you are counting loans, owners transfers, or refunds as income, you are getting inaccurate information on your P&L. This can cause the pains of unnecessarily higher taxes.

6. You should not have any negative amounts under “expenses” unless it’s a refund and is offset to the original purchase. If you have negative amounts in the expenses section that aren’t refunds, this is likely supposed to be income or a balance sheet item.

These are just a few quick hacks that will help you catch bookkeeping errors before they become bookkeeping disasters! 

Of course, we are just scratching the surface here. If you really wanted to clean up your accounting completely, we’d get into settings, entity types, tax mapping…the list goes on and on.

But Still, these tips are a great place to start. There’s no need to do it all overnight! So the next time you open up QuickBooks, put this quick audit into action and see where you stand! 

Love, Light, & Money, Honey.

Kaylee

P.S. There’s a lot to know about cleaning up accounting, isn’t there? If you want to know more about why accounting and bookkeeping is such a big deal, check out this article! I go into the major reasons why accounting is the foundation of a profitable business, and how to get yours in order!