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1. Onboarding a client whose financial records are completely clean is a rarity in the world of Accounting and Bookkeeping. Most businesses, especially small to medium-sized ones, often have areas needing some level of adjustment or correction. I’ve outlined some considerations and methodologies that might help streamline your cleanup processes for clients.

   Onboarding Clients with Clean Books

   1. Rarity of Clean Books:

      • It is quite unusual to encounter a client with 100% clean, perfectly maintained financial records. Most businesses have discrepancies, oversight, or minor issues needing attention.

   2. What Constitutes Clean Books?:

      • Accurate categorization of transactions.
      • Regular and accurate bank reconciliations.
      • Proper documentation matching financial records (invoices, receipts, statements).
      • Compliance with relevant Accounting standards and tax regulations.
      • Up-to-date ledgers with negligible discrepancies in trial balances.

   The Cleanup Process

   If a client requires financial record cleanup, having a structured process can enhance efficiency and consistency. Here are some steps and considerations:

   1. Initial Assessment:

   • review financial statements: Evaluate the balance sheet, income statement, and cash flow statement for obvious errors or inconsistencies.
   • Bank Reconciliations: Check the last completed bank reconciliation and identify when discrepancies began.
   • Historical Financial Data: Understand how far back incorrect or incomplete data might go.

   2. Determine Cleanup Scope:

   • Rule of Thumb:
     • Last Tax Return: Clean up from the last filed tax return if historical tax information is critical for continuation.
     • Last Reconciled Period: Focus from the last reconciled month, particularly if the primary goal is current record accuracy.
   • Client’s Industry and Needs: Some industries have specific compliance needs impacting how far back cleanup is needed.

   3. Systematic Approach:

   • Prioritize Issues: Identify the most significant discrepancies that affect financial accuracy and compliance.
   • Step-by-Step Method:
     • Start with bank and credit card reconciliations.
     • Verify accounts receivable and payable matches.
     • Address asset and liability misstatements.
   • Documentation Organization: Ensure every transaction is backed by adequate documentation.

   4. Technology and Tools:

   • Accounting Software: Utilize tools that offer bank feeds, reconciliation assistance, and transaction categorization.
   • Automation Tools: Consider tools like Hubdoc or Receipt Bank

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