Signs Your Bookkeeper Is Doing It Wrong
Most business owners do not realize their bookkeeping is being done incorrectly until something breaks. That might be a tax surprise, an IRS notice, or a financial report that clearly does not reflect reality. By the time this happens, the damage has usually been building for months or even years.
This article outlines the most common warning signs that your bookkeeper may be doing it wrong and explains what to do before the problems grow larger.
We review your books and identify whether they are reliable.
1) Your Books Are Always “Almost” Reconciled
If your bookkeeper says reconciliation will be finished later, next month, or after tax season, that is a red flag. Reconciliation is not optional. Without it, financial reports cannot be trusted.
2) Financial Reports Are Late or Inconsistent
Clean bookkeeping produces consistent reports on a predictable schedule. If reports are delayed, change significantly month to month without explanation, or never seem final, something is wrong.
3) Your Bookkeeper Cannot Explain the Balance Sheet
The Balance Sheet is where bookkeeping errors hide. If your bookkeeper focuses only on the Profit and Loss and avoids explaining Balance Sheet accounts, there is a high likelihood of unresolved issues.
4) Uncategorized Transactions Keep Piling Up
Uncategorized transactions should be temporary. If they accumulate month after month, it usually means the bookkeeper does not understand the transactions or is avoiding proper classification.
5) Your CPA Asks Questions You Cannot Answer
If your tax preparer regularly asks for clarification, corrections, or adjustments because the books do not make sense, that is a sign the bookkeeping is not supporting tax filing properly.
6) QuickBooks Feels Fragile or Confusing
When bookkeeping is done poorly, business owners become afraid to touch QuickBooks because one wrong click seems to break everything. A healthy bookkeeping system should feel stable, not fragile.
7) Personal and Business Transactions Are Mixed Without a Plan
Occasional mixing happens, but it must be handled intentionally. If personal and business expenses are mixed regularly without clear treatment, reports become unreliable and tax risk increases.
8) Numbers Change After the Tax Return Is Filed
If your books are still being adjusted after the tax return is filed, or if the books do not match what was reported, it suggests cleanup or correction work was never completed properly.
Why These Problems Usually Get Worse Over Time
Bad bookkeeping compounds. Small issues create larger discrepancies, which create more confusion, which leads to avoidance. Eventually, cleanup becomes unavoidable and more expensive.
What to Do If You See These Warning Signs
The solution is not to confront your bookkeeper without clarity. The solution is to get an independent review of your books to determine what is actually wrong and what needs to be corrected.
This is where a Bookkeeping Health Check is valuable. It provides an objective assessment without committing to a full cleanup before you understand the scope.
We identify problems early so they can be fixed correctly.
Bookkeeping Cleanup & Catch-Up Services
If you recognize any of these signs, Polaris Tax & Accounting can help you correct the underlying issues and restore confidence in your financial records.
Related service page: Bookkeeping Cleanup & Catch-Up Services in Plantation, FL (Replace with live permalink.)
Not Sure If Your Books Are Right?
If you are questioning your bookkeeping, that is usually a sign to take a closer look. Start with a Bookkeeping Health Check and get clarity before small issues turn into major problems.