Tips from a Bookkeeping Cleanup Specialist: 3 Common Issues Found in Books

As a Bookkeeping Cleanup Specialist, I’ve worked on over 40 books for real estate investors, professional service providers, shops and cafes, e-commerce, and trades in the United States. Here are the top 3 most common issues I see and how they affect businesses.

Note: These examples are specific to United States bookkeeping.

 

1. Sales Tax Issues

Sales tax is so common that when a business owner tells me they have to pay sales and use tax, I expect to find an issue.

Common problems I see:

• Businesses undercharging or not charging sales tax to customers
• Collecting sales tax but not paying it to the tax agency
• Overpaying sales tax due to incorrect revenue calculations

Real examples from my cleanup work:

• A jewelry seller used Square to process payments but only charged 4% sales tax when their area required 8.25%. They had to pay the difference from their revenue. Solution: Updated their Square settings to charge the correct percentage.
• A trades business collected thousands in sales tax but hadn’t made payments for months. The owner didn’t know their accountant wasn’t handling the payments. Solution: Informed the owner and they resolved the issue with their accountant and started making payments.
• A monthly client reported total sales including sales tax charged to customers, making revenue look higher than reality. Solution: Showed her how to properly file returns, leading to correct reporting the next month.

 

2. Invoicing Issues

Invoicing problems usually stem from missing steps or inconsistent workflows.

Common problems I see:

• Not tracking invoices at all
• Duplicate income on the P&L from incorrect workflows

Real examples from my cleanup work:

• As a sign language interpreter, I didn’t consistently track open invoices in my early days. During cleanup, I found hundreds in overdue payments I hadn’t noticed. Solution: Created one central place to track all invoices.
• A trades business had negative unpaid balances because they created duplicate invoices for jobs. Solution: Streamlined their workflow to use one invoicing system and trained staff on proper procedures.

 

3. Missing Expenses

These are easy deductions that often get overlooked. A good tax preparer will catch them, but if you don’t have one, you’re missing out on valuable deductions and a complete picture of your finances.

Common problems I see:

• Unreconciled bank accounts missing expenses
• Missing loan and credit card interest on P&Ls

Real examples from my cleanup work:

• A monthly client’s QuickBooks sync stopped mid-month, missing two weeks of transactions. Solution: Caught this during reconciliation and manually imported the missing data.
• A trades business had multiple loans missing from their books for two years. This understated their loan balances and left thousands in interest off their P&L. Solution: Updated books to show correct interest expenses and loan balances.

 

The sooner you identify these issues, the easier they are to fix. Don’t wait until they become a tangled mess.

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