8 Red Flags Your Bookkeeping Needs Help—Now

Ok, let’s switch gears.

Previously, we covered construction-specific chaos (see Part 1) . Let’s take a dive now into even more red flags - but these are general bookkeeping problems that can affect any business. Some of these may hit home more than you’d like to admit.

Debbie Downer Moment: These could eventually break your business down completely.

Think of these red flags like the check engine light for your business dashboard. Ignore them, and you’re risking costly mistakes, wasted time, and sleepless nights. Some of these are lightweight issues, like a slow tire leak, that will eventually cause a blow out but aren’t cause to call a tow truck yet. Others, well, others are like your coolant hose busting as you’re driving down the road - you better pull over, call the tow truck, and just cancel your appointments for the day.

Here we go -

1. You’re not reconciling your bank accounts regularly.

It’s bookkeeping 101, but so many businesses let it slide, and this is the slow leak. If your bank statement and your books don’t match, how can you trust your numbers? Making sure your all of your bank and credit card account transactions are accounted for regularly helps uncover any workflow kinks while they’re still kinks. We can patch a leak and it’s as good as new. We can’t patch a blow out - you know what I’m sayin?

Reconciling monthly (or better yet, weekly) keeps everything accurate and ready for tax time—or any surprises in between. It ensures each job transaction has been accounted for but not duplicated.

2. Piggybacking off of #1 - You have the same person handling BOTH the transaction entries (accounts payable and receivable) AND reconciling the accounts each month.

No, no, no. Could we tell you how many times we’ve caught internal fraud for this very reason?!? Separate those duties! Get an outside service to at least reconcile the accounts each month. This is so important. We know it is so tempting to just have your office person do this - they do everything else office related right now and you don’t want too many hands in your finances. However, this is a time you need to share. Obtain an objective person who’s not managing the daily transactions to take your statements and match them to the transactions recorded in your books (Psst: you still need to do this even if your QuickBooks Online account has the bank feeds connected!). Not only will you safeguard against fraud, you’ll catch workflow errors before they become massive issues.

3. You’re mixing personal and business expenses.

Your grocery run and client invoice don’t belong in the same account. This is a red flag for auditors, and it makes clean bookkeeping a nightmare. Separate those accounts yesterday, and save yourself hours of frustration later.

And a bit of legal love - if you have an LLC but you’re intermingling your personal and expense transactions regularly, this could be seen by the court as “piercing the veil”, which means the LLC will not protect your personal finances. YIKES! We are not attorneys and we do not give legal advice, but we do know some. If you need one, Niel Wilcove is amazing. Check him out here.

4. You don’t have a system for tracking accounts receivable or payable.

Late payments, forgotten invoices, or missed bills? If you’re relying on sticky notes or memory alone, it’s time for an upgrade. A proper system ensures you know who owes you money and who you need to pay—and when, in the very least. Your office staff (specifically the person we call the financial ops coordinator) should take special care in recording proper due dates. You should be reviewing reports regularly that share this information so you can make informed cash flow decisions. Speaking of cash flow… here comes #5.

5. You’re constantly surprised by cash flow problems.

Ever checked your bank account and wondered, Where did all the money go? Poor cash flow tracking is a silent killer for businesses. Invest in a solid forecasting system to prevent those “uh-oh” moments and keeps you in control.

6. You have zero financial reports—or you don’t trust the ones you have.

It boggles our minds when we hear a general contractor state that they don’t even know when they last looked at their financial reports. Balance sheets, profit and loss statements, and cash flow reports aren’t just boring paperwork. They’re the tools that tell you how your business is really doing. If you don’t have reliable reports, you’re running blind.

We cannot even count how many times we’ve heard potential and incoming clients make the following statements such as these regarding the reports their accounting software spit out or their office staff put together - “I know that’s what it says but that’s not what’s true.” Or, “Our accounting is like a black hole. We can’t find anything and when we put stuff in, we don’t know where it goes.”

7. Tax time feels like a war zone.

Scrambling to find receipts, invoices, or anything that resembles an organized system? That’s a clear sign your bookkeeping isn’t working for you. Managerial accounting should help ease the stress come tax time. Yes, adjustments will still need to be made by the CPA, BUT you shouldn’t be scrambling for documents. They should all be properly stored using an organized system.

Save yourself the panic by setting up year-round processes to stay tax-ready.

8. You’re still using outdated software—or NONE at all!!

WHAT?! Manually entering data into spreadsheets isn’t just old school. It’s crazy inefficient.

I’m about to hurt some of you, General Contractors - manually entering bills into project management software isn’t acceptable either!!! NO way, Jose! Why would you want that stress? You should not have to hire someone specifically to enter bills manually. Oh, my head hurts thinking of the insanity.

Bookkeeping software today harnesses AI, automates tasks, reduces errors, and gives you instant insights.

Just a little FYI - we don’t even take on clients who are unwilling to move to our streamlined systems. You should NEVER manually enter bills, manually attach pdfs, etc.

If you’re stuck in the past, it’s time to upgrade.

Why These Red Flags Matter

Bad bookkeeping isn’t just an inconvenience—it’s a liability. From cash flow nightmares to missed opportunities for growth, ignoring these issues can cost you big. The good news? Every one of these red flags is fixable with the right systems and support.

You may know by now, but we help businesses like yours turn chaotic books into crystal-clear financials. Whether you need help reconciling accounts, creating reports, or modernizing your systems, we’re here to make it happen.

What’s Next?

If these red flags sound familiar, don’t wait for them to blow up into bigger problems. Let’s talk about how we can help.