If your books feel “off,” they probably are. These seven red flags show up in most messy files. Below, you’ll see why each matters, where to check in QuickBooks Online, and what to do next.
1) Unreconciled bank or credit card accounts
Why it matters: If the statement balances aren’t reconciled monthly, reports can’t be trusted and errors compound.
- Where to check: Bookkeeping → Reconcile. Review the last statement end date. Also run the Reconciliation Discrepancy report.
- Fix: Connect feeds; match imported transactions to statements; clear duplicates; reconcile every month and lock closed periods.
2) Negative balances in asset or liability accounts
Why it matters: Negative A/R, A/P, inventory, or loans usually mean misclassification or timing errors.
- Where to check: Reports → Balance Sheet, plus A/R Aging Summary and A/P Aging Summary.
- Fix: Reclassify miscoded entries; apply unapplied credits/payments; correct loan splits (principal vs. interest); avoid “plug” JEs.
3) Bloated “Undeposited Funds”
Why it matters: Old payments sitting here can overstate income or cause duplicate deposits.
- Where to check: Chart of Accounts → Undeposited Funds → View register. Run the Deposit Detail report.
- Fix: Use + New → Bank Deposit to group customer payments into the exact batches that hit the bank; remove duplicates; match each deposit to a statement line.
4) Suspense or “Ask My Accountant” keeps growing
Why it matters: This account hides unresolved problems. Leaving it to “figure out later” snowballs into year-end cleanup.
- Where to check: Profit & Loss and General Ledger filtered to this account; scan for recurring vendors and missing payees/memos.
- Fix: Research source docs; assign proper categories and payees; add missing attachments; if truly unknown, create a short-term “Research” tag and review weekly.
5) Strange aging in customers or vendors
Why it matters: Old balances often mean duplicates, unapplied credits, or payments recorded to the wrong places.
- Where to check: A/R Aging Summary, A/R Aging Detail, A/P Aging Summary.
- Fix: Apply credits correctly; re-create missing invoices/bills; clean duplicates; write off immaterial balances with a documented policy.
6) Sales tax or payroll liabilities don’t match filings
Why it matters: Mismatches risk notices, penalties, and ugly year-end adjustments.
- Where to check: Sales Tax Liability reports vs. agency filings; payroll liability balances vs. your payroll provider’s reports/portal.
- Fix: Record tax/payroll payments properly (not as expenses); correct mapping; post adjustments for prior periods with a memo trail.
7) Reports don’t match what you know is true
Why it matters: When the numbers diverge from reality, decisions go sideways.
- Where to check: Compare Cash vs. Accrual P&L; tie bank balances to statements; review the Audit Log for bulk edits; scan unusual spikes by month.
- Fix: Investigate outliers; reclassify; reconcile; close periods with a password so history doesn’t drift.
Quick monthly self-check (15 minutes)
- Reconcile last month’s bank/credit cards.
- Empty Undeposited Funds into proper bank deposits.
- Scan A/R & A/P aging; apply credits and clear stale items.
- Confirm sales tax & payroll liabilities equal what was filed/paid.
If two or more red flags show up, it’s time for a diagnostic.
Want certainty before year-end? Start with a free diagnostic review.
Schedule a Free Diagnostic Review