People use “cleanup” for everything that is wrong with the books, but two different problems hide behind the word. Knowing which one you have changes the plan, the timeline and what you should be quoted.
Catch-up: the months that were never done
Catch-up is volume work. Statements exist, transactions happened, nothing was entered or reconciled. The job is to enter and reconcile each missing month in order. It is predictable: the number of accounts and months tells you most of what you need to know about the effort.
Cleanup: the months that were done wrong
Cleanup is detective work. The months are “done,” but transactions landed in the wrong accounts, transfers were recorded as income, payroll liabilities never cleared, or the same deposit was entered twice. The reports look complete and are quietly wrong.
- Balance sheet accounts that do not match a statement anywhere.
- Income that is higher than deposits, or expenses that double on transfer days.
- Old uncleared transactions sitting in the reconciliation for months.
- Undeposited funds or suspense accounts with growing balances.
Why the order matters
Catch-up first, cleanup second. You cannot fix a balance sheet while months are still missing, because every missing month changes the balances you are trying to correct. Finish entering and reconciling, then review the balance sheet account by account and document each correction.
If someone quotes you a cleanup without asking how many months are reconciled, they are guessing. Ask for the diagnosis before the price.
What you should receive at the end
- Every bank, card and loan account reconciled through a stated date.
- A short memo of what was corrected and why, for your CPA.
- A closing date set so the fixed periods stop moving.
- A monthly close schedule so it does not happen again.
