Books Cleanup
Definition
Fixing bookkeeping that exists but is unreliable: correcting miscategorized transactions, clearing suspense accounts, reconciling past periods and fixing inventory and COGS.
Want a deeper explanation?
Cleanup is different from catch-up: the books are current, but the numbers are wrong. It often starts with a diagnostic that finds the biggest problems first.
After cleanup, a solid monthly process keeps it from happening again. Watch for: gross margins that look too good for your industry, which is one of the most common signs books need cleanup.
Example
A cleanup finds Amazon deposits booked as net revenue, inventory purchases expensed and $46,000 in Uncategorized Expense. After the fix, gross margin moves from 61% to a realistic 44%.