A Real-Life QuickBooks Cleanup: What Looked Fine Was Totally Off

Background:

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An accountant I’ve worked with previously reached out to me about a client in the logistics and storage industry. They had recently converted from QuickBooks Desktop to QuickBooks Online. While preparing the year-end financial statements and corporate tax return, he noticed significant discrepancies and referred the client to me for a deeper review.
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Unfortunately, the internal bookkeeper lacked experience with QuickBooks Online and hadn’t received proper training.
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Initial Concerns – As Reported by QuickBooks Online:

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- Profit: $200,500
- Bank Balance: $292,000
- Accounts Receivable: Over $100,000
- Accounts Payable: Over $100,000
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At first glance, these numbers looked healthy but they weren’t accurate.
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What We Discovered (The Reality):

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- Bank Account: Overdrawn by $130,000
- Accounts Receivable: Only $42,000
- Customer Retainer Deposits (Liabilities): $27,000
- Accounts Payable: $36,000
- Sales Overstated by $94,000 due to customer payments being incorrectly recorded as income rather than applied to invoices
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Corrective Action:
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Over the course of a 30-hour cleanup project, we:

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- Matched customer payments to open invoices correctly
- Re-categorized and corrected financial transactions
- Reconciled bank and credit card accounts
- Updated accounts payable and receivable balances

- Properly recorded customer deposits as liabilities
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Outcome:

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- Revised Profit: $92,500 (less than half of the originally reported amount)
- Accurate financial data submitted for year-end tax filings
- Avoided overpaying corporate tax based on inflated profit figures
- Improved cash flow visibility and reporting
- Reliable data now supports sound, strategic decision-making

Client Testimonial:

‍“After our bookkeeper left our financial records in disarray, and I found myself ill- prepared to manage the new online system, Kerry stepped in and played a critical role in correcting errors, reconciling accounts, and restoring clarity and confidence in our books. From the outset, she demonstrated deep expertise with cloud-based accounting platforms (particularly QuickBooks Online) and quickly assessed the scope of the issues. What impressed me most was her methodical and thorough approach: identifying discrepancies, cleaning up incomplete or incorrect entries, and building a sustainable, accurate bookkeeping system that I now feel confident maintaining. Thanks to her work, we were able to meet tax and reporting deadlines we were at risk of missing. Our financial visibility is now stronger than ever. Beyond her technical skill, Kerry communicated clearly, responded quickly to questions, and showed genuine care in helping get our business back on track. I highly recommend Kerry and My Cloud Bookkeeping to any business in need of a skilled, trustworthy, and solutions-focused accountant—especially if they’re facing a challenging or inherited bookkeeping situation.”

Ongoing Support:
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The lack of training during the transition to QuickBooks Online resulted in unreliable financials and missed opportunities. The business was operating without a clear picture of its cash flow, profitability, or liabilities and nearly paid too much tax based on inaccurate figures. Had I been involved during the initial conversion, I could have ensured the systems were set up correctly and the internal team received the training they needed. This would have saved the client both time and the cost of a 30-hour cleanup.

I’ve been delighted to continue supporting this client, providing ongoing training and check-ins to help them stay on track. With better systems and a clearer understanding of their financials, they’re now equipped to manage their books confidently and make informed decisions as their business grows.