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Illustrative example · Cleanup and catch-up
Nine months behind, brought current and reconciled to the penny
Maple Street Bakery LLC (sample engagement). A single-location bakery café in Denver, CO on QuickBooks Online and Square. April to December 2025 had never been closed, and the owner needed clean books for a new accountant and a bank loan review.
This is a sample. Maple Street Bakery is a fictional business built to show how we run a cleanup. Every figure is illustrative, and the arithmetic ties out so you can follow it.
What the review found
A review first, fixing second
We start every cleanup with a review, not with fixing. We compare the QuickBooks file with bank, card and Square statements, and we quantify what is wrong before touching anything. That gives the owner a fixed scope and an estimate, which here was three weeks. Four accounts had not been reconciled since March: two bank accounts and two credit cards.
| Finding | Profit overstated by |
|---|---|
| 63 transactions entered twice, once from the bank feed and once by hand, so deposits were counted two times | $7,840.00 |
| Square payouts booked as gross sales, so processing fees were never expensed | $1,915.00 |
| Sales tax collected from customers sitting in income instead of a liability | $4,380.00 |
| Bank fees never recorded | $184.60 |
| Owner withdrawals paid from the business account with no entry (an equity item, so no profit effect) | $0.00 |
| 1,148 transactions parked in Uncategorized, so the P&L could not show where money went | n/a |
| Total profit overstatement | $14,319.60 |
Profit for April to December reported before cleanup: $52,480.00. After: $38,160.40. The reported figure was overstated by $14,319.60, which is 27% of what was reported. That is the number a lender or a tax preparer would have worked from.
The cleanup
Oldest month first
We work forward from April, not backward from December. Each month has to reconcile before the next one starts, otherwise errors carry forward and hide each other.
01
Rebuild the structure
A simpler chart of accounts, a Square clearing account, and a separate liability for sales tax.
02
Remove duplicates
Every pair of matching bank-feed and manual entries, one by one.
03
Categorize and set rules
Each parked transaction coded, with bank rules created so recurring vendors code themselves afterward.
04
Fix Square
Gross sales, fees, refunds and tips split out, with payouts matched to the bank deposit.
05
Reconcile each month
All four accounts reconciled back to the statements, month by month.
06
Close the books
A closing date set in QuickBooks so closed periods cannot be changed by accident.
Transactions categorized per month, in the order we cleared them
96
118
124
131
139
127
142
136
135
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
The nine months add up to the 1,148 uncategorized transactions.
The proof
The reconciliation that proves it
Here is the main checking account at December 31, 2025, from what the books said to what the bank said. Every adjustment is a finding above, and nothing is left unexplained.
| Checking, December 31, 2025 | Amount |
|---|---|
| QuickBooks balance before cleanup | $41,260.00 |
| Remove deposits entered twice | −$7,840.00 |
| Record Square processing fees withheld from payouts | −$1,915.00 |
| Record owner withdrawals | −$2,300.00 |
| Record unrecorded bank fees | −$184.60 |
| Adjusted QuickBooks balance | $29,020.40 |
| Bank statement balance | $29,185.40 |
| Less one outstanding check | −$165.00 |
| Reconciled bank balance | $29,020.40 |
The books were $12,239.60 too high. The two columns now agree.
Before and after
| Measure | Before | After |
|---|---|---|
| Months unreconciled | 9 | 0 |
| Accounts unreconciled (2 bank, 2 credit card) | 4 | 0 |
| Uncategorized transactions | 1,148 | 0 |
| Duplicate transactions | 63 | 0 |
| Net profit, April to December | $52,480.00 | $38,160.40 |
Handover
What the owner and accountant received
Reconciliation reports for all four accounts for every month, a P&L, balance sheet and cash flow statement for the period, the general ledger for tax preparation, and a one-page findings memo. A short list of questions, about transactions only the owner could identify, was sent separately. Reports were handed to the accountant. Tax treatment and filings stayed with them.
How it stays clean
The cleanup ends with a monthly routine: bank rules for recurring vendors, Square payouts matched on arrival, a month-end checklist, and the closing date moved forward each month. Then monthly bookkeeping starts from books that are already right, not from a backlog.
This work covers bookkeeping, reconciliation and reporting. It does not include tax return preparation, tax advice, legal advice or audit.
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