How to Spot Errors in Your Books, Even When Someone Else Keeps Them

You do not need to keep the books to check them. Most errors leave a trace in a few places an owner can read without any training in debits and credits: the bank balances, the balance sheet, the profit and loss, and the lists of who owes what.

None of this assumes anyone is doing a bad job. Careful bookkeepers make errors, software makes some on its own, and many errors start with information that never reached the person keeping the books. A regular look from the owner catches them while they are small and easy to explain. Below are the checks in the order I would run them, what each kind of error looks like, and what to do when something does not add up.

What kinds of errors turn up in a set of books?

Most bookkeeping errors fall into six types:

Missing. A transaction never recorded, such as a payment from an account the bank feed does not cover.
Doubled. The same transaction recorded twice, often once from the bank feed and once by hand.
Misclassified. Recorded, but in the wrong place: a loan payment booked entirely as an expense, or money the owner put in booked as sales.
In the wrong month. A December bill recorded in January, which makes both months wrong.
Parked. Left in a holding account to be sorted out later, and never sorted.
Mistyped. A figure entered as 1,250 instead of 1,520.

Some of these change your profit. Others leave profit right and the balance sheet wrong, which is why the checks below look at more than one report.

Where errors show up in your reports

Each check below compares one report with something you already have or already know.

Report	Compare it with	What an error looks like
Bank, card and loan reconciliations	Your bank, card and loan statements	Balances that do not match, or items uncleared for months
Balance sheet	Last month's balance sheet, and what clients paid in advance	Holding accounts that grow, balances that never fall, assets below zero
Profit and loss	What you billed or collected, and earlier months	Jumps, gaps, costs counted twice, loans or transfers counted as income
Receivables and payables	What you know was paid	Paid invoices or bills still listed as open, or items months old
Audit log	Your reconciliation reports	Unexplained changes to a reconciled month

Do the bank balances in your books match the statements?

They should, to the cent, once you allow for checks and deposits that had not cleared by the statement date. Start here, because the bank statement is the one record nobody keeping the books can change.

The monthly comparison is called a reconciliation, and every bank and credit card account should get one every month. You do not need to redo it. Ask for the reconciliation report instead, and look at three things:

The date. It should cover last month, not last quarter.
The ending balance. It should match the statement you can download from the bank yourself.
Old uncleared items. A check or deposit still uncleared after a few months is often an error: a payment recorded twice, voided, or never actually made.

Do the same for loans and lines of credit. The balance in the books should match the lender's statement. If it never goes down while you make payments, the payments are probably being recorded as an expense instead of reducing the loan.

Start with the bank statement. It is the one record your books cannot rewrite.
Christopher Wilson, Cilson Bookkeeping

Which balance sheet accounts point to errors?

The ones that should be at zero or falling, and are not. The balance sheet is where errors tend to sit unnoticed, because a wrong balance there can leave profit looking right. These deserve a question:

Holding accounts. QuickBooks® Online creates Uncategorized Income and Uncategorized Expense accounts automatically, and Intuit's help page on them, updated in August 2026, says they track money that still needs to be categorized. The same page lists an Uncategorized Asset account for assets that cannot be matched to an account. Some files also carry an "Ask My Accountant" account for the same purpose. A balance that grows month after month is work waiting to be done.
Opening Balance Equity. The same Intuit page calls this the default account for adjustments. Once a file is set up, it should normally be cleared to zero. A balance that stays there, or keeps moving, often means figures were forced to agree rather than corrected.
Payments waiting to be deposited. Customer payments recorded but never grouped into a deposit. A large or old balance usually means the same money was recorded twice, once as a payment and once from the bank feed.
Payroll and sales tax liabilities. They should rise as tax is owed and fall when it is paid. A balance that only grows suggests the payments are being recorded somewhere else.
Negative balances. A bank account, a receivable or another asset below zero almost always signals an error.

Professional-service firms often hold client money on the balance sheet too: retainers, advances and deposits for work not yet done. Those balances should agree with your own record of what each client has paid ahead. For a law practice, the trust account needs a three-way reconciliation, in which the bank statement, the trust ledger and the total of the client ledgers all agree.

How do you check the profit and loss for errors?

Read it against what you already know happened in your business last month. That makes it easier to check than it looks:

Income against billing. Revenue should be close to what you billed, or to what you collected if the books are kept on a cash basis. Ask which basis yours use.
Regular costs. Rent, software, insurance and payroll should appear once a month. Two rents in one month and none in the next is usually a dating error. Two rents in one month and one in every other month is usually a duplicate.
Comparisons. Put the month beside the last few months and beside the same month last year. A category that jumps or disappears for no reason you recognize is worth a question.
Money that is not income. Loan proceeds, money you put in and transfers between your own accounts are not sales. If income looks better than the month felt, start there.

A hypothetical income error

Take a design firm whose March income jumps by a third with no new clients. The owner asks, and the answer comes back in a day: a draw on the line of credit was recorded as sales. Once it is moved to the loan account, March looks like every other month, and the loan balance finally matches the lender's statement.

Why do transactions go missing or appear twice in your books?

Mostly because of how bank feeds work. When a bank connection drops and reconnects, transactions can download a second time. And a payment entered by hand, such as a check, can be recorded again when the same payment arrives from the feed. Either way, the income or expense counts twice until someone matches the pair.

Missing transactions are harder to see, because nothing points to them. Think about the accounts a bank feed might not cover: a card used only for travel, a loan paid from a personal account, a payment app, or an account closed during the year. Ask whether each one is in the books. A list of every account the business uses, given to whoever keeps your books once a year, closes most of these gaps.

What do the receivables and payables lists show about errors?

Mostly payments that were recorded but never matched to the invoice or bill they paid. The receivables aging lists money customers owe you, and the payables aging lists bills you owe. You know these better than anyone keeping your books, which makes them some of the quickest checks you can run.

A customer listed as owing an invoice you know they paid usually means the payment was recorded as a new deposit and never applied to the invoice. Income may then be counted twice.
A bill listed as unpaid that you know you paid usually means the payment came in from the bank feed as a new expense. The cost is then counted twice.
Very old items on either list deserve a question. Some are real and need collecting or paying. Others are errors that have sat for a year.

What can the audit log tell you about an error?

Who changed what, and when, if your books are in QuickBooks Online. Intuit's help article on the log was updated in August 2026. It says the log tracks all account activity and cannot be turned off. Events stay available for two years, and you need admin rights to see them.

The entries most worth an owner's attention are changes to months that were already reconciled. Intuit's guide to past reconciliations was updated in September 2026. It explains what happens when a reconciled transaction is edited, deleted, voided, moved or unreconciled: the next reconciliation starts from a different balance. A report called the Reconcile Discrepancy Report lists what changed.

A change to a finished month often has a good reason, such as a correction your accountant asked for. It is still worth knowing about. Reports you already relied on may no longer match the books.

What should you do when you find a possible error?

Ask, and ask early. Most questions have quick answers: a payment split across two categories, an expense moved on your accountant's advice, a timing difference that clears next month. The easiest way to ask is to point at the figure and ask for the story behind it. "Can you walk me through this balance?" gets a better answer than "Why is this wrong?"

Write down what you asked and what you were told. If the same kind of error keeps coming back, the cause is usually upstream: a bank rule that sends a vendor to the wrong category, a connected app sending bad data, or information that never reaches whoever keeps your books. Fixing the cause matters more than fixing each entry, because an entry fixed on its own tends to come back next month.

These checks are for errors. If you suspect money is missing rather than misrecorded, that is a different job, for a specialist in that work.

When is an error worth a second opinion?

When the answers do not settle it: the reports still disagree with the statements, or you simply cannot tell whether the books are right. A second opinion helps then, and it does not have to mean changing bookkeepers.

In my practice that second opinion is a books health check, and an owner can buy it on its own, including when someone else keeps the books and there is no plan to switch. It starts with a free 20-minute call by phone, and nobody looks at the books on that call. The health check itself is a fixed fee, agreed and paid before I start. I look at the general ledger, the status of the bank and credit card reconciliations, how the chart of accounts is built, and any obvious posting or classification errors. Where it applies, I also look at how connected systems such as payroll, inventory or bill payment feed the books. The findings typically come back on a video call. If you later hire me for monthly bookkeeping, the fee is credited against a monthly invoice.

It is not an audit, a review or a compilation. It gives no assurance, it is not designed to detect fraud, and it makes no tax, legal or compliance determinations. Before I kept books, I examined them. As a Federal Reserve bank examiner, I reviewed the financials of hundreds of businesses, and the work was opening a set of books, finding what was wrong and working out why it happened.

Owners often ask whether their current bookkeeper will know. Not unless they go looking. You add me as an accountant user in QuickBooks Online, and Intuit's help article on inviting accountants, updated in August 2026, says the invitation goes by email to the accountant being added. Your existing accountant users are not alerted. The addition does show in the audit log and in your list of accountant users, so someone looking would find it. Most owners get the second opinion first and talk to their bookkeeper once they know where they stand. If the books need more than a few fixes, my catch-up and cleanup service covers what comes next.

A monthly check for errors in your books

Compare each bank and card balance in the books with its statement.
Ask for the reconciliation reports, and check their dates.
Look for balances in the uncategorized and opening balance accounts.
Read the profit and loss beside last month and the same month last year.
Check the receivables and payables lists against what you know.
Match each loan balance to the lender's statement.
Ask about anything you cannot explain while it is recent.

Spotting errors in your books, in short

You can check books you do not keep. Start with the bank, because the statement is the record nobody can change. Then read the balance sheet for holding accounts and balances that only grow, the profit and loss against what you know happened, and the lists of who owes what. Ask about what you cannot explain while it is recent, and look for the cause when an error repeats. Two related articles go further: what monthly bookkeeping includes, and how long a cleanup takes when the errors run deep. When the answers do not settle it, a second opinion can, without changing who keeps your books.