1. Gather and organize client information

The first step to cleaning your client’s data is to gather all the right, most up-to-date information on their account. This includes:

• Bank account statements

• Credit card statements

• Account balances

• Cash account information

• Invoices and receipts

• Expense records

• Payroll records

• Tax documents

• Contracts and agreements

This is often easier said than done. Waiting for clients to send you the right information and documentation can be a massive time sink with a lot of back-and-forths.

Your accounting practice management software should help streamline this step with four key components:

1. Client portal: A secure client portal for you to request and receive sensitive client information.

2. Integrated email: Your emails should be integrated into where you track your work, so that your client communications are consolidated and easily viewable by your team.

3. Automatic client reminders: Request information from your bookkeeping clients, and send automatic email reminders until the request has been completed.

4. Document management: A built-in secure document filing system or integrations with document management systems, like OneDrive and Dropbox.

Built-in document storage within Karbon

2. Reconcile accounts

Compare account records with real-world documents like bank statements and transaction details. If the numbers don't add up, this is the time to look into all discrepancies, understand why there are differences, and fix them.

This may involve correcting misclassified transactions, adjusting entries for accruals or prepayments, and addressing any other issues affecting the accuracy of the financial statements.

👇 Download the Weekly Reconciliation Template from the Karbon Template to streamline your periodic reconciliations. This template can be customized to apply to monthly reconciliations.

3. Review accounts payable and receivable, payroll, inventory records, and taxes

Once the data has been cleaned up and reconciled, it's time to review the accounts holistically.

Review accounts receivable

Ensure all outstanding invoices and overdue bills have been accurately recorded.

Review accounts payable

Ensure all payments owed by your client are recorded and paid for.

Review payroll

Ensure all employee payments, like salaries, wages, and deductions, are documented, up-to-date, and compliant with all tax requirements.

Review inventory records

If your client sells products, ensure their purchase and sale history is documented and up-to-date.

Review tax filings

Ensure all tax obligations have been met, with any IRS penalties paid.

👇 Download the First-Time Penalty Abatement Letter template from the Karbon Template Library to apply for penalty relief for your clients.

Use this review process as an opportunity to identify trends, patterns, and areas for optimization. Ask yourself:

• Are there frequent errors or delays in payroll processing? How can payroll workflows be streamlined to improve accuracy and efficiency?

• Are there any noticeable fluctuations in receivables that correlate with seasonal trends or changes in business operations?

• Are there opportunities to automate manual payroll tasks (time tracking, data entry, tax calculations. etc)?

• Are there opportunities to reallocate resources or adjust spending priorities?

4. Clean up chart of accounts

The accounts used in your accounting software (i.e. Quickbooks), such as assets, liabilities, equity, income, and expenses, should be tidied up.

Duplicates should be merged, accounts should be named logically, unused accounts should be removed, and new accounts should be created as necessary.

5. Prepare and send reports

With clean books, you can confidently prepare reports for your clients. You can update them on what you’ve completed and if you’ve uncovered anything that needs their attention.

From then, you’ll be better equipped to analyze their financial data and business needs, helping them make clear business decisions.

Emergency bookkeeping cleanup services project checklist

Sometimes a client’s books require more in-depth and emergent action, and a once-off emergency bookkeeping cleanup project is required.

This emergency bookkeeping cleanup project’s scope is often much wider (years of books vs. one month) and the urgency can be quite high—especially if a small business owner realizes there are approaching filing deadlines or a sudden audit or financial review.

The purpose is the same: leave the books more organized than when the project began.

Here are the steps to consider for this project:

✅ 1. Identify scope and price ✅ 2. Set realistic goals and expectations ✅ 3. Prioritize tasks ✅ 4. Follow a routine accounting cleanup ✅ 5. Set up workflow automation

Step 1: Identify scope and price

First you need to assess the full scope of the cleanup project.

• What’s the time frame you need to cover?

• What is the volume of clients and transactions involved?

• Are there specific areas of the books that are particularly disorganized?

• Are there any immediate deadlines or regulatory requirements that need to be addressed?

Answering these questions will give you an idea of the resources you need to dedicate to the cleanup project, which will help set your price correctly.

Recommended reading: Bookkeeping services pricing guide

Step 2: Set realistic goals and expectations

Setting and communicating clearly defined expectations with your client will ensure all stakeholders know what to expect. An accounting engagement letter template can help set this project up for success.

Start by getting crystal clear on what success looks like—perhaps it's achieving compliance with regulations, reducing errors, or simply bringing order to chaos. Then establish realistic timelines by breaking down the project into realistic milestones. This might look something like:

• Month 1: Establish a structured filing system and have all financial records updated

• Month 2: Achieve regulatory compliance with thorough audits

• Month 3: Reduce errors by 50% through enhanced training programs and regular performance evaluations

Whatever your goals and timelines look like, communication is key. Keep the client looped in through the whole process with regular meetings and updates. In this way, they become a strategic partner, not just a bystander.

Step 3: Prioritize tasks

Time is of the essence in emergency bookkeeping cleanup projects and your tasks need to be prioritized based on their level of importance and impact. Look at tasks associated with any:

• Immediate concerns or liabilities

• Impending deadlines

• Out-of-date compliance regulations

Address these first. Effective task management also means delegating these action items across your team based on your CPAs' skills, expertise, and availability. Your most senior accountants have probably had experience with similarly urgent situations.

Step 4: Follow a routine accounting cleanup

To prevent another build-up of out-of-date data and disorganized files, set a regular maintenance plan in place. Use the steps outlined in the section above as your foundation.

This includes educating and enabling your clients and business owners, too. Create a standard of clean accounting books with:

1. Documentation and training. Step-by-step instructions for data entry, reconciliation, and reporting can help them effectively partner with you in this new accounting system.

2. Regular reviews. Set up monthly or quarterly meetings with your client to check in with them.

3. Consistent monitoring. In addition to routine cleanups, using alerts or notifications for unusual transactions, discrepancies, or overdue tasks can prevent problems before they arrive

Step 5: Set up workflow automation

The most surefire way to keep a client’s books clean is setting up workflow automation to support you in improving the processes that impact your top line.

One study found that nearly one-third of accounting tasks have the potential to be automated. There are automation systems that exist today that can automate bank feeds, streamline client data collection, and give you templatized recurring processes.

This allows you to focus more on client-facing tasks while preventing any human error that may have contributed to messy books in the first place.

Recommended reading: DigitPro experiences 8 hours of saved time a week by automating recurring bookkeeping tasks.

Automation for accounting firm bookkeeping services

Karbon can help automate and consolidate certain functions at your firm to help streamline your bookkeeping cleanup process and other bookkeeping services:

Automatic client reminders

Karbon allows you to automate the client chase. You can request information from your clients and Karbon will send automatic email reminders until the request has been completed.

Client portal

Karbon’s client portal enables you to securely request and receive client information and documentation. You can also collaborate with clients in the portal via comments. See how much time and money Karbon’s client portal can save your firm with this time savings calculator.

Email integration and client communication records

Karbon’s email integration and notifications hub, known as Triage, ensures all your internal and client communication is embedded into your workflow. You’ll have visibility over client communication, helping you see all conversations related to your bookkeeping jobs.

Workflow and project management

Karbon’s workflow statuses and Kanban board dashboards will help you see exactly how each cleanup project is tracking.

Bookkeeping templates

Karbon’s Template Library has over 250 accounting and bookkeeping workflow templates for you to use and customize to suit your firm. You can add them to your Karbon account with one click or you can download them as Microsoft Excel files.

To learn more about how these and other Karbon features can help automate aspects of the bookkeeping cleanup process, book a demo or start a free trial.

• The bookkeeping cleanup process can be overwhelming—following a checklist or templated process will help you ensure every step is covered smoothly.

• Emergency bookkeeping cleanup projects involve a client reaching out to you in dire need of a once-off emergency bookkeeping cleanup—these should be priced and scoped carefully.

• Practice management software can help simplify and automate the bookkeeping cleanup process with features like automatic client email reminders and bookkeeping workflow templates.