What clean books actually look like

Owners are routinely told their books are fine by the person keeping them. Here are the five checks we run on every prospective client’s file — you can run them yourself in ten minutes.

The five tests

One: the bank reconciliation. Every account should be reconciled to the statement within days of month-end, with no stale unreconciled items older than sixty days. Two: negative balances where they make no sense — negative cash, negative payroll liabilities — are the smoke of forced entries.

Three: the balance in ‘Ask My Accountant’ or ‘Uncategorized Expense’. In a clean file it is zero. Four: accounts receivable that no one expects to collect — invoices from eighteen months ago inflate the asset side and hide bad-debt reality. Five: retained earnings that move for no reason between years, the classic fingerprint of prior-period edits.

Fail one test and you have a cleanup project. Fail three and the numbers steering the business are fiction. Either way, the fix is mechanical — rebuild from the bank feed, reconcile everything, adjust with documentation — and it is precisely the cleanup engagement we quote most often.