Miscoded transactions, duplicate vendors, and a chart of accounts nobody designed. All of it corrected so your reports mean something.
Your books can be complete and still be wrong. Every transaction entered, every month reconciled, and the profit and loss still doesn't reflect reality because half the expenses landed in the wrong accounts. That's a different problem from being behind, and it needs a different fix.
Reclassification is the work of moving transactions to where they belong and rebuilding the account structure so future entries land correctly. We do this for companies around Lexington and across Kentucky that have accurate bank balances but reports they can't use. The bank ties out. The story the numbers tell is still fiction.
There are tells. A profit and loss with a giant line called Uncategorized Expense or Ask My Accountant. Cost of goods sold that swings wildly month to month with no operational reason. An expense account list with 200 entries, most of them used twice. Owner distributions showing up as business expenses. Three vendors named Home Depot, HOME DEPOT, and Home Depot Inc. Equipment purchases expensed instead of capitalized. Any one of these means your reports are off. Several together mean you've been making decisions on numbers that aren't real.
The chart of accounts gets fixed first, because moving transactions into a broken structure just relocates the problem. Accounts get merged, renamed, or added so the list reflects how the business actually operates. Then transactions get reclassified in bulk where patterns allow and individually where judgment is required. Duplicate customers and vendors get merged. Balance sheet accounts get scrubbed, since that's where the ugliest errors hide and where nobody looks. Prior period comparatives get restated so year-over-year comparisons hold up.
The point of all this isn't tidiness. It's that decisions get better. A construction company that finally sees true job costs learns which kind of work actually makes money, and stops bidding the kind that doesn't. A service business that separates real cost of delivery from overhead finds out its gross margin is eight points off what it thought. That's the return on a cleanup. Not a prettier file, but the ability to see the business clearly enough to change it.
Yes, and that's intended. Corrected books produce corrected statements. If prior years were used for a tax filing or given to a lender, flag that up front so the changes can be handled thoughtfully and your CPA knows what moved and why. Coordination there matters more than the mechanics.
Catch-up is for books that aren't done. Cleanup and reclassification is for books that are done wrong. Plenty of businesses need both, and when they do, the catch-up gets finished first so there's a complete file to correct. They're often quoted and scheduled as one project.
Mostly. Some steps like merging accounts are best done between closes, and there may be a short window where entry pauses. That gets scheduled around your calendar rather than dropped on you. Day-to-day invoicing and bill payment usually continue without interruption.
Other work in this area that tends to come up in the same conversation.
Every bank, credit card, and loan account matched to its statement each period, which is how errors and missing transactions surface early.
Read moreVendor bills entered, approved, and scheduled so payments go out on time and what's owed is visible before it's due.
Read moreInvoices out promptly, payments applied correctly, aging reviewed regularly. Slow-paying customers get spotted while something can still be done.
Read moreBook a consultation. You will leave the call knowing what shape your numbers are in.
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