Plain-Language Guidance on Keeping Books That Hold Up.

Cleanup is diagnostic before it is corrective. The first pass identifies duplicated transactions, categories that changed meaning over time, balances that never cleared, and accounts that stopped reconciling. Only then does correction start — oldest verified period forward — so each fix rests on a confirmed starting point rather than a guess.

• Find the last month where the accounts genuinely matched the statements.
• Separate structural problems (chart of accounts) from data problems (entries).
• Document every assumption, because someone will ask about it later.

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A close is finished when the accounts reconcile, the period is reviewed for completeness, the reports are issued, and the open questions are written down. If any of those four are missing, the month is still open — regardless of how complete the file looks.

• Reconciled bank, card, and processor accounts.
• Statements that reflect how the business actually earns and spends.
• A short, explicit list of unresolved items carried into next month.

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Reconciliation is the only routine check that compares your records to an independent source. Everything downstream — margins, cash planning, tax filings — inherits whatever the reconciliation missed. A difference is a question, not a rounding nuisance; tracing it to its source is the work.

• Reconcile every account with outside activity, including merchant clearing accounts.
• Trace differences to a transaction, not to a plug entry.
• Record unresolved differences visibly instead of absorbing them.

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Reports answer three questions: what came in, what it cost, and what is left. Read the income statement for how the period performed, the balance sheet for what the business owns and owes, and the cash summary for whether performance actually converted into money.

• Compare periods, not just single months.
• Ask what a line item includes before concluding anything from it.
• Watch the gap between profit and cash — it usually has a specific cause.

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Tax preparers work faster and ask fewer questions when the year arrives closed: all months recorded, all accounts reconciled, large or unusual items documented, and owner activity clearly separated from business activity.

• Close every month before the year ends, not after.
• Collect documentation for large purchases as they happen.
• Give your tax professional one organized package, not a folder of exports.

Written by Custom One