At our old house, the water line used to shut off all the time. I’m talking breaks, leaks—constant issues. It got so bad that the neighborhood Facebook group was basically a 24/7 complaint hotline. So yeah, it was a real problem.
When the water did come back on, it would be all brown and muddy and make that loud spitting noise for a few minutes before finally running clear again. That gross, murky water moment? That’s kind of what it feels like when you know your QuickBooks is messy. You look at your numbers and something just feels… off. A little muddy. A little unclear.
Now imagine instead having crystal-clear financials—like that clean water finally running smoothly. You open your QuickBooks and instantly see exactly where your business stands. Clean reports, accurate numbers, zero second-guessing.
That’s what I want for you—and good news: it’s 100% possible. And if that murky feeling is something you’re dealing with, this is for you.
Today, we’re going to talk about cleaning up your QuickBooks—why it’s important, the steps you can take, and how it can completely change the way you understand your business finances.
Especially this time of year, as we head into year-end, it’s so important to make sure your books are accurate and up-to-date. So stick with me through the end of this—we’ve got a lot of key points to cover, and you’ll walk away knowing exactly what to do next.
So let’s start with the obvious question: Why does it matter if your books are clean?
Well, the short answer? Accuracy. But there’s more to it than that. Clean books help you:
- File your taxes correctly (no overpaying or underpaying)
- Understand what’s actually going on in your business
- Make smarter decisions because you’re not working off of inaccurate data
If your income or expenses in QuickBooks are even slightly off—too high, too low—it throws off your entire net income. That affects your taxes and your ability to see which of your offers are selling best or which expenses are actually worth it.
And here’s the part people don’t talk about enough: messy books can cost you. Not just in tax overpayments, but in missed deductions and bad business calls.
So now that I’ve (hopefully) convinced you that this matters—let’s talk about how to actually clean things up. And yes, we’re going to focus specifically on QuickBooks today.
Step one of a QuickBooks clean up? Review and reconcile your accounts.
Let’s talk about reconciling—yes, that word. It sounds scary and gets a bad rep, but reconciling is actually one of the most important steps in keeping your books clean. All it really means is this: you’re comparing what your bank or credit card statement says to what QuickBooks says—and making sure they match. That’s it!
Here’s why this matters: it’s surprisingly easy—and honestly, pretty common—for things to slip through the cracks. Maybe a transaction didn’t sync one day, there’s a duplicate entry, or something just didn’t get recorded. And when that happens, you’re not getting a full or accurate picture of your business finances.
Reconciling helps you catch those little errors before they become big, expensive problems. I’ve seen large issues come up simply because this step was skipped—and it could’ve all been avoided with a quick review.
Once your accounts are reconciled, the next step in your QuickBooks clean up is to run your Profit and Loss report.
I personally love running this report month by month. In QuickBooks, you’ll want to search for the “Profit and Loss by Month” report. This one is super useful because it lets you see your income and expenses broken down for each month—side by side—so you can spot trends or gaps at a glance.
Just a quick note here: this report is available on every version of QuickBooks except for the self-employed version. That version is super limited in what reports you can run and how much you can customize categories—so it’s one of the reasons I don’t recommend it.
Here’s why I love the P&L by Month report: it helps you spot things that are missing or look off. Maybe one month you notice there’s no software or subscription expense showing up—something you usually have. That’s a clue! Did a payment bounce, not go through, or did something accidentally get deleted? This report helps you track those patterns and stay on top of them.
You’ll also start to see seasonality in your business. Like for me, things slow down in the summer—May through August is a quiet season. Then things pick back up in September when people start to panic a little and realize, “Oh no, I’ve totally ignored my bookkeeping.” From there, it ramps up all the way through tax season in April.
Your busy season might look different. Maybe the holidays are huge for you. Maybe the new year is when everyone is ready to get organized. Either way, these reports help you see the patterns—and that helps you plan ahead.
If you’re in health or fitness—or really any industry—your reports can tell you so much about when your services or packages sell best. When you actually take time to review your numbers, it’s easier to see patterns and make smarter decisions based on real data.
It’s also a great opportunity to do a gut check on the numbers. I’ve had a lot of clients come to me saying, “There’s no way my sales were this high,” or “I’m sure I made more than that last month.” And sure enough—either there were duplicates or missing transactions.
So if your numbers don’t seem to match what you felt was happening in your business, your reports are where you can start digging in and finding the issue.
I also want to share something really important: I recently had a client who got audited by the IRS because they weren’t categorizing their PayPal sales as income. They simply didn’t realize those needed to be tracked that way—and unfortunately, that mistake led to a big tax bill. So, this is another reminder of why reconciliation and proper categorization matter. They help prevent big, costly issues down the line.
Once you’ve reviewed and reconciled your accounts, the next thing for your QuickBooks clean up is to look at is categorization errors.
These are often small mistakes, but they can throw off your reports and make things more confusing than they need to be.
One common example I see: fees from platforms like Stripe or PayPal. Sometimes clients will categorize those as both “merchant fees” and “bank charges”—which ends up splitting the same type of expense into two places. It’s not necessarily wrong, but it does make your reports messier and harder to read. Instead, I recommend picking one category and sticking with it, so everything stays clean and consistent.
Another issue? Circular categories.
Let’s say you bought office supplies from Amazon, but instead of categorizing that expense as “Office Supplies,” you accidentally categorized it as a payment to your bank or credit card account. That creates a loop—and it ends up duplicating your expense in the books, making your net income look worse than it actually was.
I know these can feel like tiny details, but they matter—especially when you’re trying to make sense of your money. Another one to watch out for is mismatched transfers. If you moved money from one account to another and QuickBooks didn’t match it properly, you might see a duplicate transaction that throws everything off. And again, this is where reconciliation comes in—it’s the step that helps catch those things before they snowball.
So, once you’ve reviewed and reconciled your accounts and cleaned up any categorization errors, the next thing you’ll want to do—especially if you invoice through QuickBooks or any software—is to review your outstanding invoices.
One really important report in QuickBooks is the Accounts Receivable Aging report. This shows you who still owes you money and how long those invoices have been outstanding. If you send invoices after the work is done—or if you’re still accepting checks—this report is crucial.
Why? Because unpaid invoices can quickly turn into cash flow problems.
You’ve done the work, you’ve delivered the value, but you’re still waiting to get paid. That’s money you should have in your bank account but don’t. And for many business owners, this gets pushed to the back burner—either because they don’t like confrontation or they just don’t know what their options are when it comes to following up.
So here’s the deal: the longer you wait to collect, the harder it gets. You don’t want to be chasing down invoices that are 90 or 120 days past due. Keep tabs on this regularly, even if you feel uncomfortable doing it. It protects your cash flow—and ultimately your peace of mind.
Even if you usually require payment upfront (which is awesome!), it’s still worth checking this report once in a while just to be sure nothing slips through the cracks.
Now let’s talk about duplicates—because this is the #1 issue I see that throws off people’s books.
Duplicate income entries can inflate your revenue, which means:
- You might owe more in taxes than you should.
- You’ll have a skewed sense of how well your business is actually doing.
Here’s how to catch them:
- Go to your Profit & Loss report.
- Click into your income accounts.
- Look for duplicate invoices (especially same-day, same-customer) or double deposits.
If you’re reconciling regularly, this should help catch most duplicates—but it never hurts to do a quick visual scan and gut check.
And finally, one more place to tidy up: check your accounts for things like Uncategorized Expenses or Undeposited Funds.
And can I just say? The word “Miscellaneous” is basically a curse word to accountants. It doesn’t tell us anything—what it was for, where it came from, or how it should be treated. It’s the junk drawer of your chart of accounts.
Instead, aim to get specific with your categorization. That way, your reports are more accurate, your CPA will love you, and your future self will thank you when tax time rolls around.
I try to avoid using any of those vague catch-all accounts in QuickBooks—things like Uncategorized Asset, Uncategorized Expense, Uncategorized Income, Other Income, or Undeposited Funds. These categories are muddy, and they don’t give you a clear picture of your finances.
If you see any of those show up in your reports, click into them. See which transactions are sitting there and ask yourself: Is there a more accurate category I could use?
Now, every once in a while, it’s okay to have a one-off transaction that doesn’t need its own specific category. That’s fine. But we want to avoid building a habit of letting a bunch of transactions land in these junk-drawer categories. Because when tax time rolls around, those unclear entries make it harder for your CPA (and you!) to know how to classify them correctly.
Giving each transaction a clearer, more specific label helps simplify your bookkeeping, makes tax prep smoother, and gives you better insight into your business spending and earnings.
Quick Review: Your QuickBooks Clean up Checklist
- Review and reconcile your accounts
- Fix categorization errors
- Review your outstanding invoices
- Check for duplicates
- Clean up uncategorized, undeposited, or vague accounts
If you go through these five steps, you’ll feel so much more confident and in control. You’ll:
- Be less stressed at tax time
- Have fewer surprises
- Gain clarity on your cash flow
- Make better decisions based on accurate info
And hey—if this sounds overwhelming, you don’t have to do it alone.
This type of QuickBooks clean up is something I offer as a service. If your books are messy, if you’re staring at a backlog of unreconciled accounts, or if duplicates are starting to pile up, I can help. Think of it like decluttering your house. When everything’s in its place, it just feels better. You breathe easier. You feel calm and in control. Clean books do the same thing for your business.
So if you’re thinking, “Erika, ain’t nobody got time for that,” — I get it. But that’s where I come in. Let me help you get caught up, clear the overwhelm, and give you the tools to keep things clean moving forward.
You’re not behind—you just need a little boost to get over that hump. And I’m here for you. If you need extra help with your QuickBooks, check out my QuickBooks services.
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