How to Tell Whether Your QuickBooks Books Are Accurate

A bank feed that looks current is not proof that the books are correct. Start with the reconciliation for each bank and credit card account, then review the accounts and transactions that a reconciliation cannot validate.

1. Check completed reconciliations

For each account, compare the reconciliation’s statement ending date and balance with the actual statement. Confirm the ending difference was $0.00 and review any changes made to previously reconciled transactions. The live bank balance shown by the bank feed may include pending activity or a different cutoff, so comparing it with today’s QuickBooks balance is not a substitute for a statement reconciliation.

2. Review the Balance Sheet

Look at Undeposited Funds, Accounts Receivable, Accounts Payable, loans, credit cards, payroll liabilities, sales tax payable, and Opening Balance Equity. Ask what supports each balance as of the report date. A negative balance can be legitimate in some circumstances, but an unexplained one deserves review.

3. Scan the Profit and Loss by month

Investigate unusual jumps, negative income categories, and Uncategorized Income or Expense. Compare major expenses with bills, receipts, payroll records, and loan statements. A loan principal payment categorized as an expense can distort profit even when the bank account reconciles.

4. Tie tax accounts to filed returns and payments

For Washington businesses, compare the sales tax and B&O tax workpapers with MyDOR filings and the amounts recorded in QuickBooks. Retail sales tax collected from customers and B&O tax paid by the business are different obligations. A Sales Tax Payable balance does not have to be zero at every month end. It should be explainable by the filing period and recorded payments.

5. Investigate duplicates and missing transfers

Review bank feed additions, customer deposits, processor payouts, and transfers between accounts. A reconciliation can end at $0.00 while a transaction is categorized incorrectly, and offsetting errors can hide in a report. The bank statement tie-out is one control, not a certification of the whole file.

Practical next step: Save a dated Balance Sheet, Profit and Loss, reconciliation reports, and a list of exceptions. Correct the source transactions with support, especially before changing a closed or filed year. Our bookkeeping cleanup service can help trace the exceptions. Book a free consultation or request a $500 diagnostic if the scope is unclear.

This article provides general bookkeeping information. Review tax reporting questions with a qualified tax professional using the underlying records.