Let the truth be told, most clients that hire you to do their bookkeeping usually come to you when their books are already months behind and many times in disarray.  In other words, their books are a complete mess. 

You may be wondering…where do I even start? 

1.  When To Start

Typically you will want to start from the year of the last business tax return that was filed and “clean-up” and/or “catch-up” each month thereafter through the current month. This is called a Bookkeeping Clean-Up Project.  

2.  Start With A Clean Slate 

As a bookkeeper you will be providing your client with “tax ready” books at the end of the tax year.  Since it is your responsibility as a bookkeeper to ensure that your client’s “tax ready” books are complete and accurate for the entire year, you will want to start your new client off on a clean slate at the beginning of the tax year. 

In order to do so, a bookkeeping clean-up project is usually necessary for most new bookkeeping clients (unless they are starting a brand new business). 

3.  What Does A Bookkeeping Clean-Up Project Involve?

A bookkeeping clean-up project starts with your client’s messy, incomplete or inaccurate books and follows a systematic process to bring your clients books current and accurate.  This process involves determining correct beginning account balances, ensuring all transactions have been entered and classified correctly, checking for data entry errors, removing duplicate entries/transactions, reconciling accounts and making the necessary adjusting journal entries.  

4.  What is the best way to approach Bookkeeping Clean-Up Projects?

Bookkeeping Clean-Up Projects can be tricky and may seem overwhelming for even the most experienced bookkeepers.  Although every clean-up project tends to have its own idiosyncrasies, I’ve found that with proper planning, preparation and following a systemic process in a specific order, you’ll be able to quickly and easily determine the proper beginning balances, stay organized, keep track of important client information and complete the project efficiently, profitably and feel confident that the figures are correct.  

I want to emphasize the importance of completing the steps in the proper order.  Do you remember learning the “order of operations rules” in math class back in grade school? I don’t know about you, but I learned the hard way that if I added, subtracted, multiplied and divided in the wrong order, I got the answer wrong on the test.  Furthermore, the only way I got to the right answer was to add, subtract, multiply and divide in the correct order of operations.  The same is true with bookkeeping.  There is a certain order to do things so that the balance sheet and profit and loss statement are complete and accurate and can be completed in an organized efficient manner that is scalable.

5.  How much to charge for a Clean-up Project?

As a general rule you should charge the same amount for each month of clean-up work that you will charge the client for their ongoing monthly bookkeeping moving forward.  

Since completing the clean-up work is a prerequisite to starting the ongoing monthly bookkeeping, depending on the condition of the clients books and the number of months that need to be cleaned up, it could result in a large chunk of change for your client to get started with you.  This should not be a surprise to most of your clients. 

Pro-tip:  Always be sure to collect your fees for the clean-up project before you begin the work.  

Conclusion

By following these 5 important tips for all of your clean-up projects, you will not only reduce the stress created by feelings of overwhelm, but you will be able to approach these projects with confidence and complete them efficiently and profitably.