How to Review Your QuickBooks Books: A Practical Checklist
Not sure whether your QuickBooks books are in good shape? Walk through the key reports, common problem areas, and warning signs every business owner should check.
When a CPA asks “How are your books?” it’s usually not small talk. It’s a prompt to make sure your accounting records are accurate, reconciled, and ready for review. If you use QuickBooks Desktop or QuickBooks Online, there are a few practical ways to assess the health of your company file before an accountant opens it.
Start With Your Balance Sheet
A balance sheet is the fastest way to tell if something is structurally wrong. Run it for the current date and for the prior year-end, then scan the major accounts:
- Accounts Receivable: Are there old invoices still showing as unpaid that you know were collected?
- Accounts Payable: Are there bills listed that were actually paid outside of QuickBooks?
- Credit Cards and Loans: Do the balances match your actual statements?
If any account is off by a significant amount, the underlying transactions need to be corrected.
Check for Uncategorized Income and Expenses
One of the most common issues we see is transactions posted to “Uncategorized Income,” “Uncategorized Expense,” or an equity account like “Opening Balance Equity.” These accounts are meant to be temporary holding areas. If transactions are sitting there long-term, your Profit and Loss report is likely inaccurate.
Run a QuickReport on each of these accounts. If you see recent transactions, you need to re-categorize them to the proper income or expense accounts.
Reconcile Your Bank and Credit Card Accounts
Reconciliation is the core verification step in QuickBooks. Every checking, savings, and credit card account should be reconciled to the corresponding bank statement. If the “Beginning Balance” on the reconciliation screen does not match your bank statement, or if previous months show as not reconciled, a prior transaction was likely edited or deleted.
Look for File-Level Warning Signs
If you are using QuickBooks Desktop, the condition of the company file itself can cause bookkeeping problems. Watch for:
- The file runs slowly when running reports or switching screens.
- QuickBooks crashes or freezes during routine tasks.
- The Verify Data utility returns errors.
These symptoms often indicate structural damage within the .qbw file. If you encounter Verify or Rebuild errors, the file may require professional repair before the data can be trusted.
Review Your Lists
Over time, vendor, customer, and item lists accumulate duplicates and outdated entries. A bloated list makes data entry prone to errors and can push Desktop files closer to their list limits. Review your lists for duplicate names, inactive items still appearing on templates, and vendors with zero activity over the past few years.
The Next Step
Block out an hour to run your balance sheet, check your reconciliation status across all accounts, and clear out any Uncategorized transactions. Fixing those three areas resolves the majority of issues that surface during a formal CPA review.