Almost every set of books that arrives for cleanup has the same handful of problems in it. They are not exotic accounting errors — they are ordinary shortcuts that made sense in the moment and then quietly compounded for a year.
Here are the ones that come up over and over, what each one does to your numbers, and the fix.
Mistakes that mix your money up with the business
Running personal spending through the business account. This is the most common one and the most expensive, because every personal charge has to be found and reclassified later — usually by someone billing you for the hour it takes. The fix is boring and permanent: one business checking account, one business card, and a transfer to yourself when you want money. Groceries on the business card become an owner draw in the books, not a deduction, and every one of them is a question somebody has to ask you months after you have forgotten the answer.
Coding owner draws as an expense. Money you take out of a single-member LLC or sole proprietorship is not payroll and not a business expense — it is equity coming out. Booking it as wages inflates your costs, understates your profit, and produces a P&L your CPA has to unwind before they can file anything.
Booking transfers as income and expense. Moving $5,000 from checking to savings is not $5,000 of expense followed by $5,000 of revenue, but that is exactly what it looks like if both sides are categorized instead of matched. The same trap catches credit card payments: the charges were already recorded as expenses when they happened, so coding the payment as an expense too deducts everything twice.
Mistakes that make your revenue and profit wrong
Recording deposits net instead of gross. Payment processors, marketplaces, and platforms deposit what is left after their fees. If you record only the deposit, your revenue is understated by exactly the amount of fees you paid, and the fee expense never appears anywhere. Record the gross sale, record the processing fee as an expense, and let the two net to the deposit that actually landed.
Treating loan proceeds as income. A $30,000 deposit from a lender is a liability on the balance sheet, not revenue on the P&L. Booked as income it inflates your profit and, left uncorrected through year end, can put tax on money you have to pay back. The same goes for owner contributions and for draws on a line of credit.
Expensing the whole loan payment. Only the interest portion of a loan payment is an expense; the principal portion reduces the loan balance. Expensing the whole payment overstates costs and leaves a liability on your balance sheet that never goes down no matter how many payments you make. Your lender's amortization schedule has the split for every payment.
Leaving sales tax in revenue. Sales tax you collect is money you are holding for the state — a liability until you remit it. Counting it as revenue makes you look bigger and more profitable than you are, and it hides whether the remittance actually covered what you collected.
Mistakes of neglect
Never reconciling. Categorizing transactions is not the same as reconciling. Reconciliation is the step that proves your records match the bank statement, and it is the only thing that reliably catches a duplicated charge, a missing deposit, or a transaction that silently failed to import. Books that have never been reconciled are a guess, however tidy they look on screen.
The uncategorized pile. Every accounting system has some version of an ask-my-accountant bucket, and every neglected file has hundreds of transactions sitting in it. The pile is not neutral — until it is resolved, your P&L is wrong by the size of the pile. Emptying it monthly takes minutes; emptying it in March takes a weekend and a lot of guessing.
Collecting contractor paperwork in January. If you pay contractors, get a signed W-9 before you pay them the first time, not at year end when you are chasing people who have moved on. Missing tax IDs are the reason 1099 season turns into a scramble, and they are entirely preventable at the moment of hire.
If your books already have these in them
None of this is fatal. Every one of these errors is correctable, and the correction is mechanical once someone works through the file in the right order — reconcile first so you know the transaction list is complete, then fix the categorization, then true up the balance sheet accounts that absorbed the damage.
If you would rather not spend a weekend on it, that is what we do. Evolv Bookkeeping is $199 per month flat: every account reconciled, transactions categorized, and your P&L and Balance Sheet closed and delivered by day 2 of the following month, plus 1099 prep at year end. Cleaning up an existing mess is a flat $500 one time, however far back it goes, finished within 2 days and guaranteed in writing. No contracts, cancel anytime, and you can get an instant quote from our homepage.