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Best Practices When Cleaning up QuickBooks Online: A Checklist

Mark Cohen
Posted by Mark Cohen on Sep 27, 2023 9:46:38 AM

You probably get these emails a lot… “I need help with a QuickBooks clean-up for my business. What should I do?”   

When navigating through financial records starts to feel clunky, business owners will reach out to their accountant (you) for advice. It’s then that offering support through a QuickBooks clean-up will come in handy.  

In this article, we'll take you through the process of a QuickBooks clean-up and provide you with a comprehensive checklist that you can provide to your clients so they can streamline their financial data and pave the way for smoother operations.

Consider Keeping Historical Data 

Clearing out old data to make QuickBooks feel more streamlined sounds tempting to business owners but as an accountant, you understand that retaining historical data is crucial for accurate financial analysis, reporting, and compliance.  

Past transactions offer insights into business growth, trends, and financial health, which is essential for informed decision-making. Deleting this data could lead to incomplete records, hindering you and your client’s ability to assess their business's financial well-being and comply with regulatory requirements.  

Ultimately, the value of retaining historical data far outweighs the short-term satisfaction of fewer numbers in your workspace. 

Write Out the Issues Getting in the Way 

What's giving your client trouble? Before embarking on the clean-up process, identify and document any issues in the QuickBooks data.   

  • Duplicate entries? 
  • Mismatched transactions? 
  • Irregularities in account balances?  

This preparatory step ensures a systematic approach to tackling each problem, guaranteeing a comprehensive and accurate clean-up process. By addressing issues proactively, a strong foundation is established for informed decision-making and strategic growth based on reliable financial records. 

Take a Close Look at Your QuickBooks Chart of Accounts 

Your client's Chart of Accounts (COA) functions as the foundational structure for your financial organization, so you want to dedicate ample time to conducting a comprehensive review. Examine each account meticulously to ensure precise and consistent categorization. If there are outdated or redundant versions, contemplate merging or archiving them.   

Next, assess how well the COA aligns with current business objectives and aspirations, a step that can substantially enhance the accuracy and efficiency of financial tracking.   

Embrace the notion that necessary changes are acceptable- adapting the COA ensures that it remains a relevant and effective tool.  

During the COA review, remain mindful of potential areas of discrepancy, such as:  

  • Duplicate or Overlapping Accounts: Sometimes, similar accounts might be created by mistake, leading to confusion and errors in reporting. Comb through your client’s COA to identify and rectify any duplications or overlaps. 
  • Misclassified Transactions: Transactions placed in the wrong accounts can distort the financial picture. Carefully examine each transaction to ensure its accurate placement within the COA. 
  • Inadequate Detail: If the COA needs more specific accounts for particular expenses or revenues, don’t risk lumping diverse transactions together. Consider expanding the COA to provide more granularity and insights. 
  • Unused or Obsolete Accounts: Over time, your client’s business operations might change, rendering certain accounts obsolete. Regularly review and eliminate accounts no longer relevant to its current activities. 
  • Inconsistent Naming Conventions: Inconsistent or ambiguous account names can lead to confusion. Standardize naming conventions to enhance clarity and minimize misunderstandings.  

Remember, modifying the COA to address these issues is perfectly acceptable. Making these adjustments is crucial to maintaining an accurate and efficient financial system. Ensure the COA evolves alongside your client’s business to reflect its changing dynamics. 

Get an Expert Bookkeeper to Help 

As an accountant, QuickBooks clean-ups may come naturally, but it’s a task that requires ongoing attention, and you may need to recommend your client reach out to a bookkeeper.   

Consider working closely with a specialized bookkeeping team, whether as an in-house resource or through outsourced services, to keep books in order. A professional team can ensure the following: 

  • Ongoing organization of your QuickBooks 
  • Correct categorization of transactions 
  • Accuracy of your financial reports  

This approach ensures your client’s financial management remains consistent and reliable. By entrusting experts with this responsibility, you free up valuable time to focus on strengthening core business activities and strategic growth initiatives. 

Leverage Software Integrations with QuickBooks Online 

In cleaning up QuickBooks Online, automation, and software tools are immensely valuable.   

These tools can enhance workflow by automating data entry and reducing the likelihood of manual errors while expediting the clean-up process. Evaluate solutions for: 

  • Efficient data entry 
  • Transaction categorization and matching 
  • Reconciliation 

For example, if your client’s books require inventory management, Katana could be a helpful integration, especially for inventory-related tasks, like real-time synchronization of sales, purchases, and inventory data. Like many other helpful tools, it integrates with QuickBooks Online and makes accounting tasks much more efficient.   

By embracing automation and software tools, businesses enhance the accuracy and efficiency of their financial records, setting the stage for informed decision-making and reliable reporting. 

Stick to Our QuickBooks Clean Up Checklist 

Helping your clients through a QuickBooks Online clean-up journey is essential for maintaining their business's financial health. Following the outlined steps paves the way for a more streamlined and efficient financial management system and unlocks a foundation for better decision-making and sustained success.   

With automation and specialized software on your side, it’s possible to provide your clients with a nice and tidy QuickBooks Online.  

Topics: Cloud Accounting


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