How a Bookkeeping Clean-Up Transformed a Service Business
- Maddie Craig
- Jan 25
- 5 min read
– BY MADDIE CRAIG | 2025
A service-based business owner came to us recently with what she thought was a simple request:
“Can you just get me caught up and organized?”
She wasn’t looking for ongoing support. She wasn’t convinced she needed monthly bookkeeping. She just wanted a quick clean-up so she could get back on track.
This client had genuinely done a solid job on her own. She had some systems. She tried to stay consistent. But a few months of falling behind turned into more than she anticipated, and several transactions and adjustments fell outside what she knew how to handle. And that’s completely okay!
Most business owners aren’t trained to handle every QuickBooks nuance or complex bookkeeping entries, and once the day-to-day work stacks up, even the most organized business owners can often find themselves behind.
What started as a basic cleanup revealed clarity and confidence she’d never had—and the realization that a little more ongoing support could take her even further.
The Clean-Up: More Than Just Categorizing Transactions
When people hear “bookkeeping clean-up,” they often think it’s just entering transactions, but a real, high-quality clean-up goes far deeper.
Here are a few things we tackled in this project:
✔ Refreshed the Chart of Accounts
Some accounts had vague names, were duplicates from past setups, and others just weren’t relevant anymore.
We simplified, renamed, and reorganized the Chart of Accounts to match how their business actually operates today.
✔ Cleaned Up Categorization
Over time, categories had been used inconsistently; a super common issue.
We standardized how expenses, revenue, and owner-related transactions were recorded, which instantly made their reports easier to read and trust.
✔ Corrected Loan Balances & Split Principal/Interest
One of the bigger issues we corrected is the way loan payments were recorded. Everything had been entered as one lump-sum expense but loan payments always need to be split between principal and interest, with the loan balance tracked on the Balance Sheet.
We fixed this by adding a loan account to the Balance Sheet with the original balance, and then applying the monthly payments split between principal and interest for all payments made for the year. This gave them clear visibility into:
How much principal was still owed
How much interest they’d paid to date
The true cost of financing
We also added a recently purchased company vehicle as a fixed asset, along with its own associated loan and details to the books as well.
✔ Cleaned Up Payroll Entries
Payroll is another area where DIY bookkeeping often gets muddled; not because business owners aren’t trying, but because payroll isn’t a single expense. It’s made up of multiple components that all need to be recorded separately.
In this case, QuickBooks Payroll was pulling money out of the bank in just a couple of big lump-sum amounts each pay period. The issue? Those lump sums included more than just payroll expenses to the business. They also included things like the employee’s portion of taxes and benefit deductions; money that isn’t an actual cost to the business.
When everything is lumped together, it’s impossible to tell what payroll truly costs or what money is simply being passed on to state/federal agencies on behalf of employees.
To fix this, we went back through each payroll run and separated everything out properly:
Gross wages (the full amount employees earned, not just what hit their bank accounts)
Employer payroll taxes (the only tax amounts the business actually pays)
Employee tax withholdings (the employee’s portion of taxes the business sends in for them)
Employee deductions (health insurance, retirement, child support, etc. that come out of the employee’s pay directly)
Employer-paid benefits (benefits the business covers/pays towards)
Once everything was broken out correctly, they could finally see:
What payroll was actually costing the business
How much of each withdrawal was a true business expense
How much was just money being passed through for employees
With everything cleaned up, their financial reports instantly became more accurate, and much more useful for planning, budgeting, and understanding the real cost of running their team.
All of these errors were throwing off their reports, but once fixed, their numbers were finally accurate, easy to understand, and truly tax-ready.
The Results: Numbers That Finally Made Sense
When we delivered their cleaned-up financials, the reaction was immediate:
😳 “I had no idea my numbers looked like this.”
Errors we fixed completely changed their reports, in a good way. Patterns, slow seasons, bottlenecks; everything suddenly became visible.
For the first time, they could clearly see:
→ Where their money was actually going
Not where they thought it was going.
→ Which clients were underpriced
A few long-time, grandfathered-in clients were costing more to service than they brought in.
→ How their bottom line shifted throughout the year
Seeing exactly which months were net positive or negative.
Most importantly:
They finally had answers instead of guesses.
The Turning Point
When they saw their cleaned-up financials (and realized how much work it takes to keep things that way!) something shifted.
“I love having reports that actually make sense… but I don’t have the time or the desire to keep up with all this myself.”
They originally came to us for a one-time clean-up. But once they experienced the clarity that accurate, consistent bookkeeping brings, they chose to stay on for monthly support.
Now they get clean, reliable financials year-round, without having to juggle the bookkeeping themselves.
Clarity Changes Everything
Clean bookkeeping isn’t just about tax prep; it completely changes how you run your business. It gives you the insight you need to:
Price your services correctly
Reduce unnecessary expenses
Make informed decisions
Build a sustainable business
Reduce stress and confusion
Understand your numbers with confidence
Avoid overpaying in taxes and make tax time easier
When your books are accurate, organized, and actually make sense, you stop operating on guesses and start operating on facts. Decisions get easier. Planning gets clearer. Everything moves forward with more intention.
And once you see your business with that level of clarity? There’s no going back.
Meet The Author
Maddie Craig is the founder of Blue Cypher Bookkeeping, a detail-oriented bookkeeper, and definitely a “numbers nerd”! She is passionate about helping organizations understand the full story of their financials and using it to make more confident decisions and grow strategically. She has experience working with a wide array of clients, including small businesses and non-profit organizations. When not crunching numbers, she and her husband enjoy traveling, being active in the community, and sharing their love for good food with friends and family.
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