How to Prepare for a QuickBooks Review: What Your Bookkeeper is Looking For?
A QuickBooks review doesn’t have to be stressful. In fact, it’s a great opportunity to tidy things up, get clarity on your finances, and ensure everything’s in order—especially if you’re relying on bookkeeping services for law firms. Whether you’re working with an in-house expert or leveraging virtual bookkeeping services, knowing what to expect makes all the difference.
Let’s break down how to prepare for a QuickBooks review, what your bookkeeper is checking for, and how you can help streamline the process.
Why QuickBooks Reviews Matter?
QuickBooks reviews aren’t just a once-a-year tax season ritual. They’re essential checkpoints that keep your firm’s finances clean and accurate. For law firms, where trust accounts, billable hours, and compliance are key, it’s especially important that everything lines up.
Even if you’re using virtual bookkeeping services, a review ensures that the numbers match your operations—and that there are no unpleasant surprises down the line.
Reconcile All Bank and Credit Card Accounts
This one’s at the top of every bookkeeper’s list. Before the review, make sure your bank accounts, credit cards, and trust accounts (if applicable) are reconciled up to the most recent month.
What your bookkeeper is looking for?
- Any discrepancies between your books and bank statements.
- Missing or duplicate transactions.
- Incorrect categorization (e.g., personal vs. business expenses).
If you’re using bookkeeping services for law firms, reconciling trust accounts properly is a must. These are often heavily regulated, so expect your bookkeeper to double-check every detail.
Clean Up Undeposited Funds
Ever notice a lingering balance in “Undeposited Funds”? That usually means some payments were recorded but never matched with a deposit. It can throw off your income reports and give a misleading picture of your cash flow.
How to prep?
- Match deposits in QuickBooks with actual bank deposits.
- Clear any outdated or duplicate entries.
- Make sure client payments are accurately reflected.
This is something virtual bookkeeping services can easily spot, but it helps if you flag anything unusual ahead of time.
Review Accounts Receivable and Payable
Your Accounts Receivable (AR) and Accounts Payable (AP) should reflect reality. If clients owe you money or you owe vendors, those numbers need to be accurate and up-to-date.
For AR:
- Double-check open invoices.
- Write off any bad debt if it’s been long enough.
- Confirm all payments have been applied correctly.
For AP:
- Ensure all bills have been entered and dated correctly.
- Check for duplicate entries.
- Make sure vendor balances are accurate.
For law firms, having a clean AR/AP is crucial, especially when dealing with client retainers and third-party payments. If you’re using bookkeeping services for law firms, they’ll likely ask you to verify your client billing practices during this step.
Review the Chart of Accounts
Think of your chart of accounts as the backbone of your financial data. It should be organized in a way that makes sense for a law firm’s operations. If you have accounts you don’t use, now’s a good time to clean them up.
What your bookkeeper is checking?
- Consistent naming conventions.
- Proper classifications (e.g., client costs vs. firm expenses).
- No excessive or duplicate accounts.
Using virtual bookkeeping services? Send them a heads-up if you’ve added new accounts recently—they’ll want to make sure everything flows correctly.
Categorize Expenses Accurately
Misclassified expenses can skew your financial reports and even create compliance issues. For example, client costs might need to be tracked separately from operational expenses.
Things to check:
- Are meals, travel, and subscriptions categorized properly?
- Have you kept track of reimbursable client expenses?
- Are trust-related expenses separate from firm expenses
A bookkeeper familiar with bookkeeping services for law firms will pay extra attention here. The more organized you are, the faster this step goes.
Attach Receipts and Documentation
QuickBooks makes it easy to attach receipts to transactions, which is great for transparency and compliance. If you haven’t been doing this, now’s the time to start.
To-do list:
- Attach receipts to high-value purchases.
- Keep records for any tax-deductible expenses.
- Include documentation for client reimbursements or trust transactions.
If you’re working with virtual bookkeeping services, uploading your receipts into a shared folder or through a mobile app can make their job much easier.
Run Key Financial Reports
Before the review, run the following reports and glance through them for any red flags:
- Profit & Loss
- Balance Sheet
- Statement of Cash Flows
- Aged Receivables and Payables
These reports help your bookkeeper spot patterns or anomalies. If something looks off to you, make a note so it can be addressed during the review.
Flag Unusual or One-Time Transactions
Did you buy new office equipment? Sign a big contract? Transfer funds between accounts? These one-off transactions are easy to forget but important for your bookkeeper to understand.
Keep a quick list and share it before the review. This avoids confusion and speeds up the process, especially when working with virtual bookkeeping services where communication is key.
Review Payroll and Contractor Payments
Payroll needs to be accurate—not just for internal tracking but for tax filings too. Review:
- Employee classifications (W-2 vs. 1099)
- Payroll taxes and benefits
- Any bonuses or reimbursements
Make sure all your contractors are properly recorded and that W-9s are on file if needed. If you use bookkeeping services for law firms, your bookkeeper will often ask for payroll summaries to ensure consistency.
Final Tips Before Your Review
- Communicate: Let your bookkeeper know if there have been major changes—like a new trust account or changes in billing structure.
- Be proactive: Don’t wait until something becomes a problem. The earlier you identify an issue, the easier it is to fix.
- Stay organized: The cleaner your records, the faster the review process.
Conclusion
QuickBooks reviews don’t have to be a chore. With a little prep and some communication, you can make the process quick, smooth, and even insightful. Whether you’re doing it in-house or relying on bookkeeping services for law firms, these reviews keep your books accurate, your firm compliant, and your stress levels low.
And if you’re working with virtual bookkeeping services, even better—they can handle much of the heavy lifting as long as you keep the lines of communication open and the records tidy.
Ready for your next QuickBooks review? A little prep now saves a lot of hassle later.
