Bookkeeping problems rarely announce themselves with one dramatic error. More often, they build quietly: a duplicate bank feed transaction, an unreconciled payment, an invoice coded to the wrong account. Eventually the BAS does not look right, the bank balance disagrees with the software or the accountant has to spend extra time repairing the file.

These six warning signs suggest it is time for a clean-up.

1. The bank balance does not match

Your accounting system’s bank balance should reconcile to the bank statement. A difference can indicate missing transactions, duplicates, deleted entries or payments recorded against the wrong bank account.

2. Old invoices are still showing as unpaid

If customers insist they paid months ago but their invoices remain outstanding, receipts may have been entered without being allocated to the correct invoice. Duplicate invoices, credit notes and deposits can also distort the accounts-receivable report.

3. The suspense or uncategorised account keeps growing

Suspense accounts are useful temporarily when information is missing, but they should not become permanent storage. A growing balance means the profit and loss, GST and balance sheet may all be incomplete.

4. GST figures change unexpectedly

Large swings may be legitimate, but they can also result from expenses coded with the wrong GST treatment, duplicated sales, private purchases claimed as business expenses or transactions entered in the wrong period.

5. Payroll reports do not agree

Gross wages, PAYG withholding and superannuation should reconcile across payroll reports, the general ledger, Single Touch Payroll records and payments. Differences should be investigated promptly.

6. Reports are no longer useful

If the profit and loss contains vague accounts such as miscellaneous, asks more questions than it answers or changes dramatically after every accountant adjustment, the chart of accounts and coding rules may need attention.

What a bookkeeping clean-up involves

• Reconciling bank, credit-card and loan accounts.
• Reviewing unpaid customer and supplier invoices.
• Clearing suspense and duplicate transactions.
• Checking GST codes and payroll balances.
• Reviewing the chart of accounts and correcting inconsistent coding.
• Confirming supporting records are attached and retained appropriately.

Once the file is clean, establish a simple weekly or monthly routine so it stays that way. The ATO generally requires most business records to be kept for five years, and digital systems can make those records easier to store, retrieve and back up.

Golden Mane Advisory can review and tidy Xero or MYOB files, complete regular reconciliations and help businesses maintain records that are ready for BAS and year-end reporting.

This article provides general information only. Corrections to lodged BAS or payroll reporting should be discussed with an appropriately qualified adviser.