What a QuickBooks cleanup is, and how to tell if you need one

What the term means

A cleanup is bringing a set of books from “there is data in here” to “these numbers are correct and I can rely on them.” It is not data entry. Most of the work is deciding what already-entered transactions actually were, then fixing the ones that were wrong, then proving the result against the bank.

Catch-up is the related job: the books are not wrong, they simply stop several months ago. Catch-up and cleanup often arrive together.

Seven signs you need one

• Your bank balance in QuickBooks does not match your bank. The most direct signal there is.
• “Uncategorised Expense” or “Ask My Accountant” has a real balance in it. Those are parking spaces, not accounts.
• Undeposited Funds keeps growing. It should empty every time a deposit clears. A growing balance usually means income counted twice.
• Your profit and loss shows a month you know was good as a loss — or the reverse.
• Accounts receivable lists invoices you know were paid. Payments were recorded as deposits instead of applied to the invoice.
• Owner draws and business expenses are tangled. Common, fixable, and worth fixing — commingling is also the most common way a single-member LLC weakens its own liability position.
• Whoever does your taxes asked for something you could not produce. Usually the moment people discover the problem.

What the work involves

In roughly this order, because each step depends on the one before it:

• Agree the period. How far back, and where the last known-good close is. Every cleanup needs a starting line.
• Reconcile every account, month by month. Bank, credit card, loan, payment processor. Not the most recent month — every month in the period, in order.
• Clear the holding accounts. Uncategorised, Undeposited Funds, Ask My Accountant, and any suspense account.
• Fix the chart of accounts. Merge duplicates, retire accounts nobody uses, and make the categories match how you actually think about the business.
• Separate owner activity from business activity. Draws and contributions are equity, not income and not expense.
• Sort out receivables and payables so the aging reports are true.
• Close the period and write down what was assumed. The last part matters more than it sounds: a cleanup nobody documented is a cleanup somebody will redo.

Why it is quoted separately, always

A cleanup is finite and a monthly service is not. Rolling a cleanup into a monthly fee means one of two things — the monthly price is inflated forever to pay for a one-time job, or the cleanup gets compressed until it fits. Faro quotes projects separately, once, before the work starts.

Nobody can quote a cleanup accurately without looking first. Anyone who gives you a firm cleanup price before seeing the file is guessing, and the guess will be resolved in their favor or yours — neither is a good way to start.

What good looks like when it is finished

Every account reconciled through the close date. Holding accounts at zero. A profit and loss you recognize as your business. A balance sheet that balances for reasons you can explain. And a written note of every assumption made along the way, so the next person — including future you — can see the reasoning.

See how cleanup and catch-up work