What Your Accountant Does When Books Are Messy
When you hand your accountant a year of disorganized financials, they don't prepare your taxes — they prepare your books enough to prepare your taxes. Every hour spent cleaning up your data is an hour billed to you at CPA rates ($200–500/hour) for work your bookkeeper could have done at half the cost.
A clean handoff to your accountant is not just a courtesy. It's a cost savings.
What "Clean Books" Actually Means
All transactions entered: Every bank statement line has a corresponding entry in your accounting system. No mystery transactions.
All transactions categorized: Every entry is coded to the appropriate account. No unexplained amounts in "Uncategorized" or "Ask My Accountant."
All accounts reconciled: Every bank account, credit card, and loan reconciled to end-of-year statements.
See exactly what's wrong with your data — try Sohovi free — try Sohovi free.
No open items requiring research: All AR invoices over 90 days reviewed and either collected, in dispute (noted), or written off. All AP bills either paid or with a clear explanation for why they're outstanding.
Accurate beginning and ending balances: Year-end balances must match what appears on official statements.
The Tax Preparation Information Package
In addition to clean books, prepare a package for your accountant:
New this year:
- New assets purchased (date, description, cost, and whether financed)
- New bank accounts or credit cards opened
- New employees or contractors added (1099 requirements)
- Any new revenue streams or business lines
Sohovi gives you the data quality picture you need to make the case for fixing it — and to track improvement over time.
Recurring items:
- Home office deduction calculation (if applicable)
- Business use percentage for any vehicle
- Retirement plan contributions
- Health insurance premiums paid by the business
Supporting documents:
- Loan statements (opening and closing balances)
- Payroll tax returns (941s, state equivalents)
- Sales tax returns (if applicable)
- Any notices received from the IRS or state tax authorities
The Cleanup Checklist (December–January)
December: Run your reconciliations. Review AR and AP aging. Process outstanding expense reports.
January 1–15: Issue 1099s to contractors paid over $600. Confirm W-2s are accurate. Get any remaining bank statements.
January 15–31: Package supporting documents. Complete your checklist. Deliver to your accountant.
A CPA who receives clean books by February 1 can do your taxes efficiently. A CPA who receives disorganized books in April can do your taxes urgently — and charge accordingly.
