6 Things to Reconcile Before You Hand Your Books to a New Accountant

6 Things to Reconcile Before You Hand Your Books to a New Accountant

Every switching accountants checklist you find online is written for the accountant. This one is written for the person paying the invoice.

Here is the economics of a handoff. A new firm quotes you a monthly fee based on a clean set of books. Then they open the file, find eleven months of unreconciled transactions, and the first two invoices arrive with cleanup hours attached at $150 to $300 an hour. Nobody did anything wrong. You just paid professional rates for work you could have done or had your existing bookkeeper finish.

Six things to settle before you hand anything over.

1. Bank and Card Feeds, Reconciled Through the Last Closed Month

This is the foundation, and when it is missing every other number becomes negotiable.

An unreconciled account means the software's balance and the bank's balance disagree, and nobody knows which transactions are duplicated, missing, or sitting in a suspense account. A new accountant cannot rely on a single figure in your P&L until this is fixed, so they will fix it before doing anything else, on your dime.

Reconcile every business checking account, every credit card, and every merchant processor through the most recent closed month. If there is an old unreconciled difference you cannot explain, write down what you know about it and hand that note over. A documented $412 mystery costs a fraction of an undocumented one.

2. The Owner Draw and Personal Expense Pile

This is the largest single source of cleanup hours in a typical handoff.

Personal charges on the business card are normal in small companies. The problem is that they sit in categories like Meals or Office Supplies until someone asks, and the someone is now a professional billing hourly to ask you about a $63 charge from fourteen months ago.

Go through the last twelve months yourself and flag anything personal. Move it to owner draw or shareholder distribution. You will remember what a charge was for in a way that no accountant ever will, and it takes you minutes per month instead of costing them hours.

This also matters beyond the fee. Mixed personal and business spending weakens the separation that entity protection depends on, which is a legal question for your attorney rather than a bookkeeping one.

3. Payroll Liabilities That Tie to the Filed Returns

Pull your quarterly 941s and your state returns and tie them to the payroll liability accounts on your balance sheet.

The classic failure is a payroll liability account with a balance that has been stuck for three years because payments were coded to expense instead of clearing the liability. It overstates what you owe, understates equity, and looks to a new accountant like a filing problem until they prove otherwise.

Gross wages by quarter should match the returns. Any remaining liability balance should correspond to a real payment not yet made. Anything else is a plug, and plugs get investigated.

4. Loan Balances Split Between Principal and Interest

Get a current amortization schedule or payoff statement for every loan, line of credit, and equipment lease.

In a surprising number of small business files, the monthly loan payment is coded entirely to interest expense or entirely to principal. Either way, the balance sheet still shows the original note years later, your interest expense is wrong, and your net income is wrong along with it.

Fixing this requires the lender's schedule. Request it now, because lenders take a week and the request is free.

5. Undeposited Funds, Stale AR, and the Other Clutter

Three things to clear:

• Undeposited funds with a balance that has been growing for months, which usually means payments were recorded twice, once as a deposit and once as a receipt.
• Accounts receivable carrying invoices from two or three years ago that will never be collected. They inflate your revenue history and your assets.
• Accounts payable with vendor bills that were paid by card and never marked paid.

Each of these is a five-minute conversation with the person who knows the history. That person is you, not the new firm.

6. Prior Returns, Depreciation Schedules, and Basis Records

Your books do not contain these, and a new accountant cannot recreate them from your bookkeeping file.

Collect at least three years of filed business returns, the fixed asset and depreciation schedules that came with them, your basis records if you are an S corporation shareholder or a partner, any elections previously filed such as an S election or an accounting method change, and the prior firm's adjusting journal entries for the most recent year end.

Ask your outgoing accountant for these in writing. Under professional standards, an accountant generally must return your original records regardless of an unpaid balance, though their own work product may be treated differently. Ask early and politely rather than after you have told them you are leaving.

What Each Item Should Come With

What you reconcile	The document that proves it
Bank and card accounts	Bank statements through the last closed month
Owner draws	Your own flagged transaction list
Payroll liabilities	Filed 941s and state quarterly returns
Loan balances	Lender amortization or payoff statement
AR and AP	Aging reports with stale items written off or explained
History	Three years of returns plus depreciation and basis schedules

Then Pick the Firm on Fit, Not on Fee

Once the file is clean, the quotes you get are comparable, which is the real reason to do this work first.

Good Operator is a West Hollywood, California firm founded in 2017 that lists SMB owners, solopreneurs, digital nomads, and K-1 partnership income among its specialties, which is a fairly specific profile of the client it fits.

Good Operator has 31 verified client reviews on Sam's List as of 2026-08-06. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences, do not represent an endorsement by Sam's List, and are not indicative of future results.

A high review count tells you that a lot of clients had something to say. It does not tell you that a firm is right for your industry, your entity type, or your deadlines. Ask for a reference from a business that looks like yours, and ask what they would not take on.

You can compare accountants and bookkeepers by specialty, location, and verified review count in the Sam's List accountant directory.

Frequently Asked Questions

Can my old accountant refuse to give me my records? Your original records, the documents you provided, generally must be returned to you even if a balance is outstanding. Work product such as the accountant's own workpapers can be treated differently and may be withheld in some circumstances. Ask in writing, keep it professional, and request the returns and depreciation schedules specifically.

When is the best time to switch accountants? Right after a year end close and a filed return is the cleanest break, because the new firm starts from a set of books someone has already signed off on. Switching mid-year is workable but usually costs more, since the new firm has to verify the stub period before it can rely on it.

How much does bookkeeping cleanup cost? It varies with the number of unreconciled months and transaction volume, and most firms bill it hourly and separately from the ongoing fee. Ask for a written cleanup estimate after they have reviewed a sample of your file, and ask what would make the estimate go up.

What should I ask a new accountant before I hire them? Ask who does the actual work and who reviews it, what their turnaround is during filing season, how they charge for questions between engagements, which industries they see most often, and what kind of client they turn down. That last answer tells you the most.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.