Recently I was hired on by my client, Maria, to take over the bookkeeping for her home design and remodeling company.
There was an enormous amount of bookkeeping catchup and cleanup needed for her company because Maria had not had a bookkeeper nor maintained most of the bookkeeping for the past four months.
After catching up Maria’s bank accounts and all job-costing related transactions (which included redesigning her entire service/non-inventory items list and the chart of accounts), I noticed a serious problem with her business credit card account in her bookkeeping company file (QuickBooks). Not only were these credit card’s bookkeeping entries woefully behind, but the previous entries, made by the previous bookkeeper, we inadequate for these reasons:
- All credit card charges were dated the exact same date for each month.
- All of the previous 9 months of reconciliation reports were not in alignment with the actual credit card closing statements.
- The most recent register closing balance in the bookkeeping software was not in alignment with the corresponding closing statement.
- A journal entry had been created for the previous end of year in the bookkeeping software for what looked like a catchup entry to catch up this credit card account’s balance.
So, unfortunately for my client, after requesting all of the previous 12 months of credit card closing statements, I had to go in to the bookkeeping software and undo all of the previous 12 months’ of reconciliation work and redo this and also make lots of corrections to the actual dates of the transactions and modifications to various other entries.
Overall, the lesson learned here by Maria is always review your bookkeeper’s work and feel confident that things are being done right for your company.
Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.