How to Clean Up Messy Business Books

Diagnose first

• Compare book balance to bank balance on every account
• Look at Owner's Equity for unexplained swings
• Scan the P&L for negative income or impossible margins
• Pull the GL detail for 'Ask My Accountant' or 'Uncategorized'

Fix in this order

• Reconnect or replay missing bank feeds
• Reconcile each account month by month
• Recategorize uncategorized and miscategorized transactions
• Clean up Accounts Receivable and Accounts Payable
• Reconcile loans, credit cards, and merchant clearing
• Adjust opening balances to prior-year return

Rebuild the chart of accounts

Match income and expense categories to your tax return lines. Fewer accounts, used consistently, beat dozens of one-off categories.