Case Study 21-2 Balanced Books Bookkeeping

Have you ever thought that it would be easier to completely start your small business bookkeeping over? Sometimes, it is much easier to start your QuickBooks bookkeeping over from the beginning and do it the correct way. The bookkeeping for a small business can get out of control quickly for many different reasons

Common reasons I see for poor bookkeeping systems: do it yourself bookkeeping, incompetent bookkeepers, family member bookkeeping, lack of time, and just neglecting to get it done. When your small business books get this messed up, it is often easier to just start your QuickBooks bookkeeping over and do it correctly from the beginning. The question is, how do you start your bookkeeping over?

Identify Mistakes and Desires

The first thing to do if you are starting your bookkeeping over is to identify the mistakes in and shortcomings of the current bookkeeping system. Is your balance sheet off? Is your chart of accounts too complicated? Write down everything that you dislike about your current bookkeeping system.

The second thing to consider is, what do you want from your bookkeeping system? What information do you wish you could extract from your bookkeeping system that you currently cannot? What financial reports would help you run your business better? It is much easier to design a custom bookkeeping system that works when you know what the goals are.  

Hire a Professional

I think that hiring a professional from the beginning is probably the most important step in starting your QuickBooks bookkeeping over. I would suggest hiring both a CPA and a bookkeeper. In addition, you should consider hiring a Certified QuickBooks ProAdvisor. I think that a lot of small business owners skip this step and try to do the bookkeeping themselves or get help from a friend because they think it will save them money. Unfortunately, failing to hire a professional in the beginning often costs more money in the long-run. It is easier and cheaper for a professional to set up the correct system than it is to fix the mistakes made by amateurs. You don't necessarily need the professional to keep your books indefinitely, but it might make sense to have them set up your QuickBooks file and offer you ongoing QuickBooks training and support.   

Customize Your Chart of Accounts

The chart of accounts is extremely important to set up correctly and you need at least a basic understanding of the QuickBooks chart of accounts to do so. It is really important to understand the different account types and where to classify certain transactions. This is where you need a professional on your side, to help you learn to code transactions appropriately.  

Additionally, you should use the QuickBooks ask my accountant account to code any questionable transactions. The biggest mistake I see businesses make on their chart of accounts is making it too complicated and gearing it toward their tax return. The chart of accounts is the core of bookkeeping and your bookkeeping should be geared toward your needs and desires. You should customize your chart of accounts to make your financial reports meaningful to you.   

Collect Information

Now that you have identified what you want from your bookkeeping and created a meaningful chart of accounts with the help of a professional, it is time to gather all the pertinent information.  

First, you will need to decide on a date to start your books over. For most, the obvious choice would be the first day of the current fiscal year.

Second, you need to dig up the information and data that you need to start your books over. Identifying all of the accounts that you need to enter beginning balances for is a great start. Find the beginning statements for every bank account, credit card, loan, line of credit, equity account, etc. Again, you may need the help of a professional to determine some of the balances for items like loans from partners and equity accounts.

Enter Balance Sheet Items

Now that you have all of your statements and information together, you can enter the beginning balances for your balance sheet items. Continue to build out and customize your chart of accounts with all of the data that you have gathered. The end result should be a very clean-looking chart of accounts and balance sheet. Now that you have a clean set of books, do yourself a favor and keep them that way.  

The key to clean books is proper coding and QuickBooks reconciliation. It is important that you code each transaction properly. If you are unsure at all of how to code something, use the "ask my accountant" code until you can check with a professional. This account will keep all of your questions organized in one spot for easy access. Make sure to reconcile all of your accounts on a regular basis. You need to reconcile any account that provides a regular statement like bank accounts, credit cards, loans, lines of credit, and payroll liabilities.  

Enter Historical Data 

Finally, I recommend that you consider entering some historical data. You have given your bookkeeping a fresh, clean start. However, if you can't easily do financial comparisons to prior years, then it will be difficult to measure how your business is doing. You need to determine how far back you would like to go and then enter the data through journal entries. Maybe you only need to enter the data for the whole year in summary format, but you may find it helpful to enter data month-by-month in order to generate both monthly and year-to-date comparisons.

I have given you a guide on how to start your QuickBooks bookkeeping over the right way. The best piece of advice that I can give you is to hire a professional from the beginning to help you set up the proper bookkeeping system. However, if your books are in the state where you need to start over, then I probably don't need to tell you to get some help and do it right this time.

What mistakes have you made that resulted in a bookkeeping mess?

Photo Credit: Canva


Automation and cloud technology are a tool for a skilled bookkeeper, not a replacement. That is why a commitment to client service is still essential to stand out in a competitive market. Balanced Books & Accounts have combined their passion for service with Receipt Bank’s technology, with impressive results.

A scanner in every office

The original bookkeeping process at Balanced Books & Accounts grew out of the fact that many of their bookkeeping clients lived in rural areas.

“Before Xero and cloud accounting we would put scanners into each of our client’s offices. They would scan items as they came in and then our scheduling software would check every hour for new items and send them to our server”, says Joe Lautier.

This system eliminated the need to drive out collect the data, or the client having to send it in the info. It also meant that they never rejected a client based on their location.

However, it did still require the traditional bookkeeping process once the scans came in. “We’d download the scans, print them off and enter the data,” according to Joe.

We make up the cost four times over

After getting involved with Xero when it hit Australia, they came across Receipt Bank at a conference in 2015. Impressed with the technology-focused bookkeepers he met there, Joe decided it was time to upgrade his system. In his words, “We needed to take that next step from the scanning that we were doing and start making our lives easier.”

Clients were already used to scanning their receipts and invoices, which allowed the scans to just be fed into Receipt Bank for data extraction and categorisation. But originally, clients weren’t actually aware that Joe and his team were using Receipt Bank.

“For me it was ‘We have X amount of work to do, and I physically can’t do it’. Receipt Bank was my way of employing another person. Now, if one of my bookkeepers used to take ten hours to do a job, with Receipt Bank he can do it in six. We absorb that software cost but we make that up more than three or four times.”

Now that they have moved to a more automated data process, the team have experienced significant time savings, Joe explains. “The old process of going in each week, downloading invoices and entering the data would take three hours a week, four times a month, per client. Now it’s done in half an hour, max.”

Part of the sales pitch

Clients became more aware of Receipt Bank once the team started using the Receipt Bank app. “The app became a selling tool for me. We weren’t hiding it before, but it moved from being an internal tool, to part of the sales pitch,” says Joe.

This also simplified the client experience. Those who had trouble making time to use the scanner in their office, or whose hardware wasn’t compatible with the scheduling software could now just switch to using the app.

Joe recalls one particular example of helping a client using Receipt Bank.

“I had a client who I would talk to once a quarter for BAS and GST lodgements. I hadn’t heard from her, so I tried to make contact and found out from her husband that she was ill. Because of this they were four months behind on their bookkeeping. I went over and set them up on Receipt Bank and by using the app they were caught up within a few days. It allowed us to give the client an easy resolution to a major problem.”

“For us as a bookkeeper Receipt Bank is great because as it attaches the document in Xero and you can Auto-publish items, which raises your efficiency and quality of work. If you’re not using Receipt Bank, invoices slip through without attachments, so now we’ve eliminated that issue.”

Time to do what you need to do

The Auto-Publish tool on Receipt Bank has become essential. “Over a 3-month period we had put through 4200 documents. If you can then save 15 seconds a document [with Auto-Publish], that adds up,” says Joe.

Now some clients have 75% their suppliers automated. The time the team has saved is being used to drive powerful growth in the firm. According to Joe, “Within the last month, we’ve picked up six new clients, and not small ones. But without Receipt Bank, we would have had to stop growing 15 clients ago.”

Receipt Bank also helps Joe stay competitive in a changing industry by focusing on client service.

“We offer full blown accounts support, even with clients overseas where we act as their accounts department. Our clients know they can call in whenever and get help with their files. That’s because with Receipt Bank we have time to do what we need to do.”


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