4 Steps to Checking Your Small Business Bookkeeper

As business consultants that are often brought in to shore up the small business bookkeeping, we can tell you a few ways to check the work and make sure it is trustworthy. This is a simple list to audit your books for accuracy. Note: this is not a session on how to interpret what you see. It’s only about building credibility for the bookkeeping data that is in there.

To start, you need to find out how “up to date” your books are. When was the last time your bookkeeper caught up your books? You should run all reports as of the last date the bookkeeper says things are complete. This is often the end of last month, or even a couple months back.

I’m going to use QuickBooks language, but the report requests are the same whether you use FreshBooks, Xero, or any other small business accounting program:

  1. Last 12 months Profit and Loss, columns by month. This is BY FAR one of the most useful reports you can get. This shows you each month’s sales and expenses next to each other, and gives you a chance to weigh in on oddities and anything that simply seems “off”. Make notes on the report and ask lots of questions.
  2. Looking further at the above report… Look at a few expense lines that you know should be level (or close)… Rent, Health Insurance, Utilities, Car Lease… All of these should have a value each month, and it should be pretty similar month to month.
  3. Balance Sheet. This is a statement of account balances. There are few you have easy access to, right? Do those look right to you? Is your bank balance right? Credit card balances? Loan balances? Does A/R look right: are you owed that much money?
  4. Reconciliation Report. Specifically, look at the “unreconciled transactions” in that report. More specifically, old stuff. This shows you items that are logged in to QuickBooks (and all of your financial reporting as done), yet have never cleared. If you see EFT or ATM, or any other notation for online bill pay here, then there are errors. Those don’t linger – they clear fast.

Need help running or looking at these? We love this stuff!  Happy to help. If you have more questions about these, feel free to email us and we can answer direct questions, or do another blog based on the questions.

About the Author Barb Fisher

Barb is the CEO of Fisher Bookkeeping, an outsourced bookkeeping consultancy that provides small businesses with a full-service financial department. Her favorite aspect of work is to break down the accounting to meaningful bits, so entrepreneurs can make a powerful difference in their own business. She's also a power lifter (squat: 215, DL: 270).

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