A bookkeeping cleanup checklist for scoping a catch up before you quote it

You need the last closed month (if any), the accounts in scope, and the documents that still exist. The IRS does not require a special recordkeeping system, but the records have to show income and expenses clearly enough to prepare returns and support what was filed. If the box of PDFs cannot do that, the catch up is a reconstruction, not a cleanup. Price and staff those differently. This page does not give prices. (Recordkeeping)

Do not start coding until this list is either in the folder or parked with a date. Named chasing is the receipts guide. Here is the intake list.

• Accountant access to the ledger, bank feeds, and payroll, or exports if they will not give access.
• Statements for every in scope account for every month in the catch up, including the month before the first open month (opening recon).
• Payroll registers and the four Forms 941 (or Form 944) for the years in scope.
• Prior tax return PDF for opening equity, officer loans, and shareholder basis clues.
• Loan amortization or year end statements.
• A written list of owner draws, transfers between accounts, and anything they already know is sitting in suspense.

How long they should have kept those records is an IRS facts and dates question. Generally, records that support an item on a return stay until the limitations period runs. That is often 3 years after filing. Employment tax records stay at least 4 years after the tax is due or paid, whichever is later. Six years if they omitted more than 25% of gross income. Indefinitely if they did not file, or filed a fraudulent return. Property records stay through the year they dispose of the property. Do not tell them to shred a statement you still need for the catch up. (How long should I keep records?)

Oldest open month first. If you start with last month, you will plug opening balances and then spend the rest of the job undoing it. Xero and QuickBooks both want a statement match, not a guessed cash number. The click of OK is the last step, not the first. See the Xero recon page and the QuickBooks categorization page for the product clicks. This is the order of work.

Uncategorized income and expenses are not a style problem. They are amounts you cannot support. The IRS burden of proof is on the taxpayer to substantiate deductions. Your catch up does not invent receipts. You ask once, park with a date, and move. (Recordkeeping)

• Write the client question as a line: date, amount, account, what you think it is, what you need.
• Do not recode 400 Amazon lines as office supplies because the job is tired.
• Suspense that is older than the catch up window, with no statement, is a parked item on the handoff, not a plug to make cash match.

Stop when the owner adds a second entity, inventory you cannot count, or three more years, and they want it inside the original scope sentence. Write a new scope. Stop when there are no statements and no feed for an account that clearly exists. You cannot recon what you cannot see. Stop when they want a tax position out of a cleanup. That is a tax engagement.

Cleanup ends when the next period can run on the month end close checklist. Write a one page handoff: last reconciled month per account, parked items with dates, feeds that still fail, questions the owner never answered, and the first monthly close date. The person who cleans up is not automatically the person who closes. Put an owner on that first close anyway.

If statements are still missing, keep using the receipt chasing emails. Do not invent a fourth cleanup email. The catch up is over. The monthly list has started.

Download the bookkeeping cleanup scoping worksheet. Fill it before you quote. Copy the cleanup order onto the same job. Do not start month 1 until the request list is in or parked.