Using a cleanup checklist for successful QBO cleanups

QuickBooks cleanup projects can easily become overwhelming and time-consuming, especially if you’re not sure where to start. That’s why I always recommend using a cleanup checklist for successful QBO cleanups. It will help you stay on track, make sure nothing is missed, and give you confidence in the end result. Watch the video below or keep reading to see what a cleanup checklist can do for you.

Click on the video link below to watch: Using a cleanup checklist for successful QBO cleanups

First things first, what is a cleanup?

What is a QuickBooks Online cleanup? Let’s define what I’m talking about just to make sure that we’re all on the same page. A cleanup starts with your client’s messy or incomplete books and follows a process – which includes reviewing the books, catching them up, fixing problems, and reconciling – and ends with books that are complete, accurate, and tax-ready.

The cleanup process is full of challenges. When facing a cleanup, you may be wondering: Where do I start? What order should I work in? How do I know when I’m done? Well, there are a lot of things happening during a QBO cleanup, so it’s really important to stay organized. Proper organization will address each of those questions for you.

The best way I’ve found to stay organized is to follow a system and use a cleanup checklist customized for my different types of clients. Using a cleanup checklist, you’ll be able to work in order, stay organized, track important client information, track the status of all the work that you’re doing, and keep track of notes and comments.

The QuickBooks Online Cleanup Checklist

There is a specific checklist that I use when tackling a QBO cleanup. I call it my QBO Colossal Cleanup Checklist (Available for purchase in the 5MB Academy linked here). Whether you’re using my checklist , or creating your own, there are some key pieces you’ll want to be sure are included.  My checklist starts with two main sections – one is for client information and then the other is the actual cleanup checklist.

Client information

To start off, you want to record the following client information:

• Company name (Legal business name).
• Tax form that’s being filed (depends based on entity type and location).
• Type of business entity (Sole Proprietor, Partnership, LLC, S-Corp, C-Corp, etc.).
• Accrual or Cash accounting (method used for their internal bookkeeping and method used for tax purposes).
• Tax return year-end date (whether it’s a calendar year-end date or a different fiscal year-end date).
• Period(s) that you’re cleaning up.
• Whether there is a Schedule L in the tax return or not. (For US companies, Schedule L is the balance sheet in the tax return. Part of the cleanup process is reconciling that balance sheet on QuickBooks to the balance sheet of the tax return.)

Cleanup checklist

Now, let’s take discuss the cleanup checklist itself. To keep everything clear and organized, there should be the following:

• a section for each step in the cleanup, listing all the sub-tasks in that step.
• a column to check as each task is complete, so you know exactly where you are in the process.
• a column to note if you are waiting on information from the client. (This is especially important if you have more than one bookkeeper in your firm working on a cleanup. It’s so easy to lose track of where you are and who has done what).

Here’s how the cleanup workflow laid out on my QBO Colossal Cleanup Checklist:

1. Fill out the client information tab.
2. Perform a balance sheet reconciliation to the tax return schedule L, if applicable to the business entity.
3. Determine whether there are any personal expenses you need to address and clean those up. We don’t want any personal expenses on the books.
4. Verify that all transactions are recorded in QuickBooks and enter or import any missing transactions.
5. Complete the bank and credit card reconciliations.

Of course, many of the steps listed above will include multiple sub-tasks. The cleanup checklist you use should break these out so you can walk through them step-by-step, avoiding confusion. As an example from my checklist, one of the most important things when doing a bank reconciliation is to go back and look for any old uncleared items or any unclear transactions in the reconciliation because typically those are duplicates or transactions that were entered in error. Those need to be reviewed and voided or deleted. Each of these tasks is laid out on the checklist to make it simple to work your way through.

You’ll also want to customize your checklists to fit the type of clients you’re working with. For example, you’ll clean up undeposited funds, work on the P&L, etc. for every client, but if you’re working with e-commerce sellers, you’ll also need to reconcile PayPal and other industry-specific items. Inventory and COGS will be relevant for some clients and not others. Areas like payroll and sales tax will depend on the type of business and what’s being done in QBO.

Wrapping up a QBO cleanup

Once you’ve worked your way down the list, answered any questions that come up, collected any information needed from the client, you’ll be able to confidently say that the cleanup is finished and the books are ready to go to the client or the tax preparer. Success!

Closing

When it comes to QBO cleanups, using a cleanup checklist will help you to stay organized and in control, and lead to successful QBO cleanups. I know that it has definitely helped me and my team. If you are looking for a tool to help you handle your QBO cleanups quicker and more confidently, you can follow the links to purchase my QBO Colossal Cleanup Checklist from the 5MB Academy for bookkeepers and accountants.

For more tips on QBO cleanups, visit the QBO Cleanup section of this blog, or check out the QuickBooks Online cleanup & diagnosis playlist on my YouTube channel: 5 Minute Bookkeeping for even more content. While you’re there, make sure to like, comment, subscribe and share, and let me know in the comments if there are any other cleanup topics you’d like me to cover in the future.

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