Bookkeeping cleanup
Behind on bookkeeping in Alabama? Here is where to start
A clear starting point for Alabama business owners with overdue bookkeeping, missing statements or unexplained account balances.
If your Alabama business is several months behind on bookkeeping, the most useful first step is to define the work. “Fix the books” can mean entering missing transactions, correcting duplicates, reconciling bank accounts or reviewing how transactions were categorized. These are related tasks, but they are easier to complete when you can see the boundary of each one.
Define the accounts and dates List every account used for business activity and identify the last period that was reviewed. Include bank accounts, business credit cards and payment platforms. Make a separate note of closed accounts that were active during the period you are cleaning up.
Agree on a start date and an end date. A cleanup for the current year may still require checking an earlier balance, because that balance carries into the period being reviewed. Document the dependency rather than making an unsupported change to older records.
Gather evidence before making corrections Download statements and collect customer invoices, supplier bills, receipts and loan statements. Ask your previous bookkeeper or accountant for available reports and reconciliation records. Preserve a copy of existing reports so you can compare the result of the cleanup with the starting point.
Create a question list for payments or deposits you cannot explain. For each question, include the date, amount, account and the information needed. A focused list is easier to answer than repeated messages about isolated transactions.
Work through the records in order Start with the earliest month in scope. Check that statement activity appears in the books and investigate any duplicate entries. Then reconcile the account and review unresolved differences. Continue month by month so that one period's closing balance can support the next period's opening balance.
Keep categorization questions visible. A reconciled bank account confirms an important part of your records, but it does not by itself prove that every purchase has the right accounting treatment.
Set a routine after the cleanup A useful handoff includes the periods completed, the issues resolved and any questions still waiting on documents. Decide who will send statements, answer questions and review reports going forward. A regular monthly appointment can make the next review much smaller.
Patrick Palmedo Accounting can discuss bookkeeping cleanup and ongoing support for businesses in Birmingham and across Alabama. Call or text (205) 209-5207 with the number of accounts and the months you need reviewed.