The first week of July is a strange little pocket in the year. The first half is done, the holiday rush hasn't started, and tax season feels far away. That's exactly why it's the best time to look at your books. Small problems in QuickBooks are cheap to fix in July… and expensive to untangle next March when your accountant is asking questions and the deadline is close.
Set aside two or three hours this month and work through these seven checks.
1. Confirm every account is reconciled through June
Start here, because everything else depends on it. Open your reconcile history and confirm that each bank account, credit card, and loan account is reconciled through the June statement.
If you're behind, catch up one month at a time, oldest first. Don't skip months. If a beginning balance doesn't match your statement, something in a previously reconciled month was changed, and it's worth finding now.
2. Clear out the "Uncategorized" accounts
Run a quick report or look at your chart of accounts for anything labeled Uncategorized Income, Uncategorized Expense, or Ask My Accountant. These are holding pens for transactions you weren't sure about.
Go through each one and assign the right category. If you truly don't know, write a short note in the memo and make a list for your accountant. A handful of questions in July is much easier than a hundred in March.
3. Review your Profit and Loss for the first half
Run a Profit and Loss report for January 1 through June 30. Read it like a story, line by line, and ask:
- Does income look about right compared to what I remember?
- Is any expense category surprisingly high or low?
- Are there categories I don't recognize?
- Is anything showing up as income that's really a loan, a transfer, or an owner contribution?
A common find is a transfer between your own accounts recorded as income or expense. That inflates both sides and can affect taxes.
Also compare by month. Run the same report with columns by month to spot odd spikes.
4. Check accounts receivable
Open the Accounts Receivable Aging report. It shows who owes you money and how long it's been.
- Follow up on anything past 30 days.
- Look for old invoices that were actually paid but never matched to a payment. These make it look like customers owe you money they don't.
- Talk to your accountant about anything you truly won't collect.
Cleaning up receivables gives you a real picture of cash coming in.
5. Check accounts payable and vendor details
If you use bills in QuickBooks, open the Accounts Payable Aging report. Make sure everything listed is something you actually still owe. Old bills that were paid outside QuickBooks will show as open until you record the payment.
While you're there, review vendor records. If you pay independent contractors, confirm you have their correct legal name, address, and tax information on file, and that they're marked as eligible for 1099 tracking if required. Collecting that now is far easier than chasing it in January.
6. Review your bank rules
Bank rules save a lot of time, but they can quietly put transactions in the wrong place for months. Open your rules list and check:
- Are any rules too broad? A rule that sends everything containing "Amazon" to Office Supplies will misfile the equipment you bought there.
- Are any rules outdated, like for a vendor you no longer use?
- Are there repeat transactions you categorize by hand every month that deserve a new rule?
Five minutes here can fix a lot of downstream errors.
7. Check users and access
Look at who has access to your QuickBooks file. Remove former employees or contractors who no longer need it. Confirm your accountant has the access they need. Make sure you, the owner, have admin rights and know your login and recovery details.
This isn't glamorous, but it protects your financial data.
Bonus: Set up for the second half
With the file clean, take a few minutes to plan:
- Estimated taxes. Talk to your tax professional about whether your first-half profit changes what you should be setting aside.
- Budget check. If you created a budget, run Budget vs. Actuals. If you didn't, now is a good time to make a simple one for the rest of the year.
- Monthly routine. Put a recurring reminder on your calendar for reconciling, reviewing the bank feed, and running reports.
Common mistakes during a cleanup
Deleting transactions you don't understand. Investigate first. Deleting can break reconciliations and hide real activity.
Changing reconciled periods without notes. If you must fix something in a reconciled month, write down what you changed and why.
Trying to do it all in one sitting. It's fine to spread these checks over a week.
Not asking for help. If something looks wrong and you can't figure out why, a quick question to your accountant can save hours.
Feel confident in your books
A mid-year checkup is much easier when you understand how QuickBooks fits together. Our QuickBooks Mastery for Small Business course covers bank feeds, bank rules, invoicing, bills, reconciliation, and the core reports, so you can keep your file clean all year instead of fixing it once a year.