Learning Center
This Is the Best Time to Fix Your QuickBooks File — Here’s Why
Early in the year is when most business owners promise themselves that this will be the year their finances are finally organized. The chaos of last year is behind them, new revenue goals are on the calendar, and there’s a fresh start waiting inside QuickBooks.
But in reality, this is also when many businesses realize something uncomfortable: their books aren’t as clean as they thought.
QuickBooks doesn’t reset itself when the calendar turns. If transactions were miscategorized, bank feeds duplicated, payroll recorded incorrectly, or invoices left unreconciled in December, those problems roll right into the new year, and they only get harder to fix once tax season is underway.
That’s why right now is the best month to clean up QuickBooks. It gives you the cleanest possible starting line for the year ahead.
Your Opening Balances Set the Tone for the Entire Year
When January 1 hits, QuickBooks creates a snapshot of your business: cash balances, credit cards, loans, accounts receivable, inventory, and owner equity all carry forward from December 31.
If anything was wrong last year, those mistakes now become your “opening balances.”
That means:
If income was overstated last year, this year starts with inflated equity
If expenses were miscategorized, your tax return may be wrong
If loans were entered incorrectly, QuickBooks may think you’re richer or poorer than you really are
Fixing these errors in March or April requires going back into a closed tax year, which is messy and often expensive. Fixing them in January is much simpler.
February Is When Bank Feeds Are the Cleanest
Most businesses rely on QuickBooks bank feeds to pull in transactions automatically. By February, all of last year’s activity has undoubtedly cleared the bank, making reconciliation easier.
Waiting too long means:
Bank rules may apply to old transactions incorrectly
Duplicate transactions may sneak in
Unmatched deposits and payments pile up
A late January or early February reconciliation lets you start the year knowing your cash balances are real.
Your Accountant Needs Clean Books — Not a Guessing Game
Every tax season, accountants and tax professionals like this office spend valuable time cleaning up QuickBooks files that should have been ready for review. That cleanup time is billed, and it delays your tax return.
When your books are accurate before you file:
Your tax return is prepared faster
You reduce the risk of amended returns
You avoid IRS notices caused by mismatches
You get better tax planning advice
QuickBooks isn’t just a bookkeeping tool. It’s the foundation of your tax return.
Payroll Errors Don’t Disappear at Year-End
This time of year is when W-2s and 1099s are issued, and that’s when payroll problems finally surface.
Common QuickBooks payroll issues include:
Employees classified incorrectly
Benefits taxed improperly
State withholding errors
Missed payroll tax deposits
If these issues aren’t corrected early, they can trigger penalties and audits later in the year.
A Clean QuickBooks File Helps You Make Better Decisions
When your books are accurate, QuickBooks becomes a powerful business tool.
You can see:
True profitability
Cash flow trends
Whether you can afford new hires
How much you should set aside for taxes
Where money is being wasted
Without clean data, QuickBooks is just a digital shoebox.
What Business Owners Should Do Right Now
Here’s the smartest way to start the year:
Have your QuickBooks file reviewed by our firm – we’re here to help!
Reconcile all bank and credit card accounts
Verify your chart of accounts matches your tax return
Fix misclassified income and expenses
Confirm payroll and tax settings
Lock last year once everything is correct
Doing this now saves time, money, and stress all year long. A clean file means fewer surprises, lower accounting bills, and better financial decisions. It also makes your business more valuable because buyers, lenders, and investors all look at your books.
If QuickBooks has felt confusing, overwhelming, or unreliable, this is your chance to change that.
NEVER MISS A STORY.
Sign up for our newsletters and get our articles delivered right to your inbox.
Rose Tax & Financial
Cedar Crest, New Mexico 87008
Sat: 10:00am to 2:00pm
Check the background of your financial professional on FINRA's BrokerCheck
Avantax affiliated Financial Professionals may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state. Securities offered through Avantax Investment Services℠, Member FINRA, SIPC, Investment Advisory services offered through Avantax Advisory ServicesSM, Insurance services offered through an Avantax affiliated insurance agency. 3200 Olympus Blvd., Suite 100, Dallas, TX 75019. 972-870-6000.
The Avantax family of companies exclusively provide financial products and services through its financial representatives. Although Avantax Wealth Management® does not provide or supervise tax or accounting services, Avantax representatives may offer these services through their independent outside business. Content, links, and some material within this website may have been created by a third party for use by an Avantax affiliated representative. This content is for educational and informational purposes only and does not represent the views and opinions of Avantax Wealth Management® or its subsidiaries. Avantax Wealth Management® is not responsible for and does not control, adopt, or endorse any content contained on any third party website.
This information is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences.
For Important Information and Form CRS please visit https://www.avantax.com/disclosures.