3 Reasons a QuickBooks Cleanup is Important to Small Business Success
Without a healthy set of accounting data and reporting, a business may be slowly closing its doors. Important financial statements cannot tell an accurate story if the information presented is incorrect to begin with. It’s just not possible when the bookkeeping is a “mess”.
So, what exactly makes a “mess” in the world of bookkeeping?
Here’s one example:
Forced adjustments to accounts, such as reconciliation discrepancies, shows that there are issues getting an account to reconcile—a process used to verify that an account balance is correct. This, in turn, leads to missing or incorrect information.
Now, what does all of that mean?
Well, not only will the tax return be negatively affected, but what story are the reports telling? And can one make sound business decisions based on the information presented?
Small businesses that neglect their bookkeeping are at high-risk for going out of business. Unfortunately, it does happen. Cash flow is the biggest reason businesses shut their doors.
How can we fix cash flow?
Well, that’s a positive result of balancing the books correctly! If records are clean, systems can be put in place to ensure that operations are running smoothly, and that cash flow is not a pain point.
Dusting off your QuickBooks File
Over the years, we’ve been so excited to work with a variety of businesses across various industries. Before initiating monthly bookkeeping services, the majority of these businesses have needed a QuickBooks Cleanup. This is one of our favorite projects! It allows us the opportunity to really dive into the data to not only correct it but to also reveal the story that’s being told. Only then, can our clients make strategic and healthy business decisions based on analysis and projections.
When your books are clean and correct you have the power, as a small business owner, to make smart business decisions by utilizing accurate data that is available to you 24/7 via QuickBooks Online. Without a clean set of books, it becomes very difficult to fix glaring issues, such as cash flow and broken accounting processes.
The 3 reasons a QuickBooks Cleanup is so important to small business success
1. The System: Without a solid system in place, we have disorder… chaos.
- Who manages the books?
- Is data updated regularly?
- Are accounts reconciled monthly?
- Who’s reviewing the data?
- Is there a 3rd party involved to advise and give feedback?
These questions, and their answers, are all part of the system that is maintaining a well-oiled accounting machine.
2. The Story: When it comes time to review the financial statements, the numbers must make sense. If they don’t, strategic financial decisions cannot be made.
- Is income higher or lower than it should be?
- Are expenses accurate?
- Have CPA adjustments been entered?
- Do the books match the latest tax return?
3. Moving Forward and Decision Making: When looking ahead, we must make sure that we can predict trends and decide how to respond early on.
- Does the historical data on the books represent what actually happened?
- Can we predict future growth along with expenses based on these numbers?
- Are we prepared to handle seasonal growth?
- Do we have the necessary staff in place?
We’ve had clients come to us that have been concerned about the state of their bookkeeping for a while. They thought they could “push through” and figure it out eventually. In the meanwhile, the day to day operations of their businesses proved harder than it should have been. Why? The right systems, processes, and information were simply not available. If you’re finding yourself in a similar boat, let’s change that today!
We’re here to help you reach your business goals!
Reach out now for a free discovery call and let’s get those books cleaned up.
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