Tips for taking on a massive QuickBooks Online cleanup

Are you taking on a big QuickBooks Online cleanup project and not sure where to get started? I’ve been in your shoes, but after years of performing QBO cleanups, I’ve developed a system for organizing my cleanup projects from start to finish. I want to share my tips for taking on a massive QuickBooks Online cleanup, to help you confidently take on even the toughest projects. Check out my video linked below, or keep reading to learn how to be more successful with your own QBO cleanup projects.

Check out my video linked below: Tips for taking on a massive QuickBooks Online cleanup:

Defining what a QuickBooks Online cleanup is

Let’s start by defining what a cleanup is. Cleanup is really like a puzzle. In fact, it’s like a puzzle with no picture. It has a lot of missing pieces and there are probably a few pieces thrown in from another puzzle. That’s what it’s like when you start a massive QBO cleanup.

Really, a cleanup is taking a set of messy and incomplete books and going through a process of reviewing, catching up, fixing what’s wrong, and reconciling. The goal is to reach a point where you have complete, accurate, and tax-ready financials. In the end, your client should be able to take those books and hand them over to their tax preparer, who should have to do very few adjustments in order to get the tax return done.

Types of cleanups

There are different types of cleanups you may encounter. You may be hired as a virtual bookkeeper to clean up specific areas of QuickBooks, like bank reconciliations, undeposited funds, inventory, etc. I consider that a partial cleanup.

Second, there’s the kind of cleanup that I specialize in, and the kind you would typically come across. It’s what I call a full cleanup.

Goals of a QBO Cleanup

When you’re doing that full cleanup, what do you clean up? First of all, your goal is to have tax-ready books. That means being able to present the tax preparer with books that are cleaned up and that need very few adjustments. Another goal when cleaning up the books is to have financials that are meaningful and accurate. Having financials that really tell the story of the business to the business owner, to a banker, to an investor, and whoever is looking at the books. Ultimately, the goal is that the books are caught up, cleaned up, and reconciled.

What it takes to do a QBO Cleanup

To reach those goals, we need to clean up bank reconciliations, undeposited funds balance sheet accounts, reconciling the balance sheet to a prior tax return of the business, cleaning up the profit and loss accounts, cleaning up the accounts receivable and accounts payable aging, and cleaning up inventory. You may also need to clean up sales tax, payroll, the chart of accounts, the products and services list, company settings, bank feeds, and App integrations, depending on the situation. Sounds like a pretty massive undertaking, doesn’t it?

One of my biggest tips when tackling a big cleanup is that you have to get organized and you have to follow a system. The challenge with doing a massive cleanup is really knowing where to start. What order should I work in? How do I know when I’m done? I can definitely identify with that those feelings. After doing so many cleanups, I know it’s easy to get overwhelmed. To avoid that and save time and stress, I recommend that you follow a cleanup workflow.

The cleanup workflow

A good cleanup workflow should include the following steps in order:

1. Get a signed service agreement and paid invoice from a client.
2. Go through an onboarding process with your client and collecting everything you need from them.
3. Go through a planning phase, making sure that you know what needs to be done, and when you’ll have the work completed for your client.
4. Perform the cleanup according to your plan to get those books caught up and cleaned up.
5. Review the cleanup and make sure everything is in order.
6. Communicate with your team members (if you have a team), the client, and the tax preparer to answer any questions and resolve any issues.

The cleanup checklist

One of the most important things that you need to have in your cleanup is a checklist. An important key to a successful QBO cleanup is to follow a system. You want to use a checklist customized to your specific client, and to their specific needs.

Your checklist ensures that you follow a systematic workflow and that nothing gets missed. It’s very easy to get out of order and miss crucial steps in your cleanup if you don’t have a way to keep everything in order. After working with hundreds of cleanups, I learned that I really shouldn’t get started doing the cleanup until I had certain things in place.

First of all, you must have a signed service agreement and a retainer. Until you have a signed service agreement and upfront payment from your client, they’re really not a client, they’re a prospect. Once when you have that signed service agreement or a signed engagement letter, plus upfront payment from them, then you have a client. Then, you can go into the onboarding process, requesting the documents and access that you need from them.

During onboarding you make sure you have everything you need, so you’re not held up later on. This can help you avoid a lot of the frustration of taking on a cleanup in bits and parts. For cleanup projects at VM Wasek, we request a copy of their last business return, PDF copies of all of the business bank and credit card accounts for the period being cleaned up, accountant’s access to their QuickBooks Online, and an introduction to the tax preparer, if we will be coordinating with them.

Closing

I hope you find these tips for taking on a massive QuickBooks Online cleanups helpful as you prepare for your next cleanup project. If you are interested, you can purchase the exact cleanup checklist we use at VM Wasek from my 5MB Academy, by clicking HERE. It can save you hours and make each and every cleanup more profitable and less stressful. To see all of the QuickBooks Online cleanup resources and courses available on my 5MB Academy (both free and paid), click HERE.

You can also visit my QuickBooks Online Clean Up playlist on my YouTube channel: 5 Minute Bookkeeping for even more content. Make sure to like, comment, subscribe and share when you visit my YouTube channel, and let me know in the comments if there are any other cleanup topics you’d like me to do in the future, I’m here to help you.

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