Bookkeeping clean-up

Nobody has ever shown us a set of books we were shocked by

It is worth saying this first, because it is the thing that stops people ringing. Books fall behind. They fall behind because the business got busy, which is the same reason they were worth keeping in the first place.

We have taken on records that had not been reconciled for several years, records where the previous bookkeeper left mid-year, and records kept diligently by an owner who had simply been shown the wrong way to do it once and had been consistent ever since. None of it is unusual and none of it is a reason to be embarrassed. The only version that gets genuinely expensive is the one left another two years because of that embarrassment.

How long a clean-up takes

A typical clean-up runs from a few hours to several days. It depends on the number of transactions, how far behind the records are, and how many errors or unreconciled items have to be corrected. We look at the records before quoting, so the estimate you are given is for your books rather than for an average.

That last clause is doing real work. One of the biggest variables is not the state of the books at all, it is how quickly missing information is provided. Which is why we ask for the records first and quote after we have looked, rather than the other way round.

The file we decided not to fix

One of the hardest clean-ups we have handled involved records kept so poorly that correcting the existing QuickBooks file was no longer the sensible option. Every correction created another inconsistency somewhere else, and the history was unreliable enough that we could not trust what we were correcting towards.

So we did not correct it. We created a new QuickBooks account and rebuilt the accounting records from a clean starting point, with agreed opening balances that had actually been checked rather than inherited.

That is not the usual answer and we do not reach for it lightly, because it is a bigger job up front. But there is a point at which repairing a file costs more than rebuilding it and leaves you with something you still cannot rely on. Knowing which side of that line a set of records falls on is most of the skill in this work, and it is a judgement we would rather make before quoting than halfway through.

What a bookkeeping clean-up actually involves

Catching up the entries is the visible part and usually the smallest. The work that makes the records trustworthy is underneath it: reconciling the bank accounts properly, reviewing and recoding transactions that were posted to whatever was nearest, agreeing the debtors and creditors to something real, and checking the opening balances rather than carrying them forward because they were carried forward last year.

We look for the same specific faults every time, because they recur. Income posted to expense codes and expenses posted to income. A refreshed bank feed that created a second bank account in the software instead of reconnecting to the first, so the balance sheet carries an account that does not exist. VAT, PAYE and CIS control accounts that have never been agreed to what was actually paid. None of these announce themselves and all of them survive a reconciliation that looks clean.

What happens after the bookkeeping clean-up

A clean-up is worth very little on its own. It puts the records right on one date, and if nothing changes about how they are kept, they drift again from the following month.

So the end of a clean-up is a conversation about what caused it. Sometimes the answer is ongoing bookkeeping, because the owner never wanted to do it and it was never going to hold. Sometimes it is software setup and training, because the person doing it is perfectly capable and was shown the wrong thing. Occasionally it is neither and the records simply needed one bad year sorting out. We will tell you which we think it is, including when the answer is that you do not need us monthly.

What we will tell you that you may not want to hear

If the records are in a state where the previously filed returns look wrong, we will say so. That is uncomfortable, because it turns a tidying job into a question about what was submitted to HMRC and what should be done about it.

It is also the whole point of asking somebody to look. Where historic errors affect returns that have already been submitted, there are formal HMRC correction and disclosure procedures, and which one applies varies with the tax, the nature and size of the error and the circumstances. We will explain the compliance steps that apply to your situation and, where it needs specialist tax advice, say so and refer you. What we will not do is produce a clean set of books that quietly leaves an incorrect return standing behind it.