People picture cleanup as a large amount of categorising. Some of it is. But the categorising is the easy part, and doing it first is how cleanups go wrong.
Here is the actual sequence.
1. Establish where the last good ground is
Before touching anything, find the most recent period that was genuinely reconciled and closed — every account matched to its statement, no forced entries.
That date is the foundation. Everything after it gets rebuilt. Everything before it is left alone unless there is specific evidence of a problem, because reopening closed periods without reason creates more work than it solves.
Sometimes the answer is "never." That is a different and larger job, and it is better to know at the start.
2. Fix the structure before the transactions
If the chart of accounts is wrong, categorising two years of transactions into it produces two years of well-organised nonsense.
So the structure gets repaired first: accounts that duplicate each other merged, missing accounts created, the cost-of-goods-sold versus operating-expenses split corrected. Then the transactions have somewhere sensible to go.
This is also where the opening balance gets verified. If Opening Balance Equity is carrying an unexplained figure, that is a setup error, and every period since inherits it.
3. Work forward, oldest first
This is the part people find counterintuitive. Why not start with the most recent month, which matters most?
Because each period's closing balance is the next period's opening balance. Reconcile March before January and you are reconciling against an opening figure you have not verified. When January turns out to contain an error, March has to be redone.
Oldest first means each period closes on ground that has already been established. It feels slower and it is dramatically faster.
4. Separate what should never have been mixed
Usually the largest single chunk of the work: personal spending on business cards, owner draws recorded as expenses, another entity's costs paid from this one's account.
Each of these is a judgement call requiring someone who was there. This is why cleanups involve questions — a good cleanup generates a list of "what was this?" items rather than guessing, and the client answering them quickly is the single biggest factor in how long the job takes.
5. Reconcile, properly
Every account, every period, matched to the actual statement. No plug entries. Where a difference cannot be resolved, it gets documented as an open item rather than buried.
That last part matters. A cleanup that ends with three unexplained differences, clearly documented, is more useful than one that ends with a suspiciously clean set of books and a $4,100 adjusting entry nobody can account for.
6. Produce corrected statements and hand over
Restated financials for each closed period, a summary of what changed and why, and a list of anything still open. If prior returns were filed from the old figures, that summary is what your CPA needs to decide whether anything requires amending — their call, not ours.
What determines the size
Not the number of months, which is what everyone assumes. Four things, roughly in order of impact:
- Whether anything was ever reconciled. Books that were reconciled but not categorised are far quicker than the reverse.
- Commingling. Every mixed transaction is a decision, and decisions do not scale.
- Number of accounts and entities. Multi-entity work multiplies rather than adds, because intercompany transactions have to agree on both sides.
- Record availability. Missing statements mean reconstruction from whatever exists.
That is why we look before quoting, and why the quote is a fixed price rather than an hourly estimate. Most projects land between $350 and $7,500 — a genuinely wide band, because the jobs at either end are genuinely different. The pricing page sets out the three tiers, and the review itself carries no obligation.
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We handle your bookkeeping end-to-end — categorization, reconciliation, month-end close, and clean financial statements, so your books stay current and CPA-ready.