Quickbooks Clean Up Checklist: 4 Simple Steps For Data Health

Reethi Iyer
5 min read
Quickbooks Clean Up Checklist: 4 Simple Steps For Data Health

You know your QuickBooks data is messy and seriously out of date — or maybe you’ve never maintained accurate books. How can you clean up QuickBooks and get your finances back on track?

The good news: Cleaning up your books is fixable and there are experts to help. Many new businesses encounter bookkeeping issues. Ideally, every startup would prioritize accounting from the first days of incorporation. Accurate finances allow your business to understand its cash position, create forecasts, attract investors, and ensure compliance. 

However, many founders underestimate the importance of accounting during the first stages of operation, which can complicate reconciliations and create major concerns for long-term business continuity. And while Intuit QuickBooks provides user-friendly tools for streamlining some accounting tasks, the software isn’t designed for inexperienced users. 

By working with an experienced bookkeeping service or team, you can restore order to your general ledger — and present clear financial data to investors, lenders, and your internal team. 

4 Steps To Your Quickbooks Clean Up Checklist

If your QuickBooks has a long list of uncleared transactions or if you’ve neglected to follow Generally Accepted Accounting Principles (GAAP), you’ll need to perform a clean-up with guidance from experts who have experience in your industry. Here’s a basic QuickBooks cleanup checklist to help you get started.

1. Don’t delete QuickBooks historical data.

If you have limited experience with business accounting, you might consider restarting your QuickBooks to build an entirely new chart of accounts. After all, during QuickBooks cleanup, you need to reconcile old transactions, and founders rarely have time to dig through historical data to categorize every transaction appropriately. 

Both QuickBooks Desktop and QuickBooks Online (QBO) allow users to purge historical data — but “starting over" isn’t always optimal as you’ll need access to historical data to maintain an accurate balance sheet. While you might have backups of important financial reports (for instance, bank statements and invoices), your QuickBooks file data may include important information that can help your finance team contextualize the numbers. 

2. Make a list of known issues.

Review your chart of accounts and identify inaccuracies that could indicate problems with your accounting records. Some common examples:

  • You haven’t reconciled your accounts regularly and therefore cannot identify the source of discrepancies on your balance sheet. 
  • You haven’t accurately tracked bank fees, loan interest, or fixed asset depreciation.
  • You can’t generate an accurate profit & loss (P&L) statement or other key financial statements.
  • Your QuickBooks doesn’t include correct information about inventory levels.
  • You rely on estimations when paying state, local, or federal taxes.
  • You have duplicate transactions and journal entries.

Until you address these issues, your business activities are limited: Investors and lenders will need reliable information during due diligence, and you may underpay (or overpay) taxes. You also won’t be able to create useful projections or communicate financial goals to your team. 

By identifying problems in your QuickBooks data, you can help your finance team find solutions — and build a more sustainable approach to everyday bookkeeping.

3. Review (and consider revising) your Quickbooks chart of accounts.

Your chart of accounts allows you to categorize transactions and forms the basis of all key financial statements. Often, founders ignore the chart of accounts when setting up QuickBooks or use the software’s built-in categories. That can be a costly mistake: Miscategorization can affect tax obligations and present an inaccurate image to people outside your business (such as investors).  

Put simply, you should tailor the chart of accounts to your business’s operations and industry. The goal is to provide an appropriate level of detail — not too much, not too little — to demonstrate historical trends and predict future performance. 

4.  Find a long-term bookkeeping team.

Cleaning up your QuickBooks data can be time-consuming, but it isn’t a one-time project. Your startup needs a full-time bookkeeping and finance team that can help you maintain GAAP compliance and structure a chart of accounts that helps you meet your long-term goals.  

Look for professionals who will prioritize the accuracy of historical data instead of “starting fresh.” Most importantly, be open to changing your bookkeeping practices to simplify future reconciliations and attain an error-free picture of your business’s finances from year to year. 

See Also: QuickBooks vs. Accountants: Do You Need Both?

Zeni’s finance team can help you clean up your books and spend less time on bookkeeping.

At Zeni, we understand the challenges of operating a new business. Our finance team can help you with a cleanup process by optimizing your chart of accounts and addressing QuickBooks issues. Your company will walk away with the reliable financial statements necessary for long-term performance. By drawing on the knowledge of accounting experts with experience in Software-as-a-Service (SaaS), manufacturing, eCommerce, and other industries, we deliver on-target advice and suggestions on automation improvements.

The Zeni platform features an easy-to-use interface with customizable views for different users. You’ll have access to a GAAP-compliant chart of accounts and key reports — without dedicating hours of your time to bookkeeping.

Experience the power of AI Accounting & Bookkeeping for
your business in our interactive demo!
Start Exploring Zeni
Let's Get Your 2024 Budget Right!
Schedule Your Free Consultation
Hire A Fractional CFO
Not sure where to start? Feeling overwhelmed? Just want someone to take this off your plate?

Secure a free 1:1 session with Zeni’s Fractional CFO
Schedule a Free Call