A lot of business owners come to us thinking their books are fine. Then we dig in. Here’s what we usually find.
There’s a version of bookkeeping that looks fine on the surface but is quietly creating problems underneath. We see it regularly with businesses that have been managing their own books for a while, or that have been using software without any oversight. The numbers exist. Things more or less add up. But the process is broken in ways that matter.
We’re not sharing this to make anyone feel bad — most of these issues come from a lack of accounting training, not a lack of effort. We’re sharing it because catching these problems early is a lot less painful than discovering them at tax time or during a loan application.
Common Issue #1: Uncategorized Transactions
Every accounting system has a catch-all category — sometimes called ‘Ask My Accountant’ or ‘Uncategorized Expenses.’ It’s meant to be a temporary holding place. In a well-maintained set of books, it should be empty or nearly empty by the end of each month.
In a lot of the books we inherit from new clients, it’s overflowing. Hundreds of transactions, some going back years, sitting in a bucket that provides zero financial information. When we can’t categorize income and expenses accurately, we can’t give you an accurate picture of your profitability — and we can’t file an accurate tax return.
Common Issue #2: Bank Accounts That Haven’t Been Reconciled
Reconciliation is the process of matching your accounting records to your actual bank and credit card statements. It’s one of the most important controls in bookkeeping, and it should happen every single month.
When accounts go unreconciled for months — or years — small errors compound into big discrepancies. Missing transactions, duplicate entries, and incorrect amounts all build on each other. By the time someone tries to reconcile a backlog, it can take hours or days of work to sort out.
Unreconciled books are the #1 reason we find significant discrepancies between what business owners think they made and what they actually made.
Common Issue #3: Accounts Receivable That No One Is Watching
If you invoice clients, you should have a clear picture at all times of who owes you money and how long they’ve owed it. In a healthy set of books, this is tracked in an Accounts Receivable aging report. In a lot of small business books, invoices get created but never matched to payments — so the AR balance keeps growing with amounts that have actually been paid.
This isn’t just a bookkeeping problem. It’s a cash flow visibility problem. If you don’t know what’s actually outstanding vs. what’s been collected, you can’t make good decisions about spending.
What a Clean Monthly Close Actually Looks Like
A proper monthly close includes reconciling all bank and credit card accounts, reviewing and categorizing all transactions, updating AR and AP, running a profit and loss statement and balance sheet, and doing a quick review for anything that looks unusual.
When done consistently, this process takes a few hours at the end of each month. When it’s been neglected for months, it can take days. We help businesses build clean, consistent close processes — and we handle the monthly close ourselves for clients who’d rather focus on running their business.
Ready to Get This Off Your Plate?
At Basc Expertise, we handle bookkeeping, monthly close, and financial reporting so you can focus on running your business. Reach out to us at www.bascexpertise.com — we’d love to chat.