5 Signs Your Bookkeeping Needs a Clean Up

When a business gets busy, bookkeeping is usually the first thing to slip. We regularly work with owners who were confident their books were in good shape — until a closer look turned up balances that didn't reconcile, transactions sitting in the wrong place, payment processor activity recorded incorrectly, and invoices that should have been cleared months ago. Each of these quietly distorts the reports you rely on to make decisions.

Here are five signs it may be time for a clean up.

1. Your bank balance doesn't match your accounting software

The balances in your accounting software should line up with your actual bank and credit card statements. If your software is showing $15,000 in your transaction account while the bank statement says $11,500, that gap needs explaining.

Usually it comes down to one of three things: transactions that were never recorded, transactions entered twice, or transactions coded to the wrong account. None of them fix themselves, and the gap tends to widen the longer it goes unaddressed.

2. Transactions are piling up in uncategorised accounts

Take a look at your Uncategorised Income and Uncategorised Expenses accounts. If there's a growing list sitting in either, those transactions haven't been properly classified — which means your profit and loss statement isn't showing you an accurate picture of how the business is performing.

A handful of uncategorised items is normal in any given month. A backlog stretching back a quarter or more is a sign the books need attention.

3. Stripe or PayPal activity isn't recorded properly

If you take payments through Stripe, PayPal or a similar processor, both the sale and the processing fee need to appear in your books.

Say a customer pays $1,000 and Stripe deposits $970 after taking a $30 fee. Recording only the $970 that landed in your account understates your income by $30 and misses the expense entirely. Multiply that across hundreds of transactions and your reporting drifts a long way from reality.

Payment processor accounts should also be treated as accounts in their own right and reconciled individually — not just tracked by what arrives in your bank.

4. Old invoices are still sitting in Accounts Receivable

If your Accounts Receivable report shows customers owing money on invoices that were paid, cancelled or written off long ago, the figure isn't reliable — and neither is any cash flow forecast built on it.

Work through your older invoices and confirm that payments, credit notes and write-offs have all been recorded correctly. It's often the quickest way to bring your receivables back to something meaningful.

5. Your Balance Sheet shows negative balances that don't add up

Unexpected negative figures in asset accounts are worth investigating. If your books show a negative bank balance but there's genuinely money sitting in the account, something has been missed or entered incorrectly.

The same applies to a negative Accounts Receivable balance, which usually points to payments being allocated against the wrong invoice or recorded without a matching invoice at all.

Where to from here

If any of this sounds familiar, a bookkeeping clean up will get your records back to a position you can trust — and make everything that depends on them, from BAS lodgement to business decisions, far more straightforward.

CSCG can review your books, identify what needs correcting and get things back on track. Visit www.cscg.com.au or call 9974 8333 to organise an obligation free consultation with one of our specialists.