“Bookkeeping is just categorizing transactions.”
That sentence has paid for a lot of my cleanups.
Every bank transaction has a category. The feed is cleared. Nothing is sitting there waiting to be added.
Meanwhile, customer payments were recorded as income while the invoices stayed open. Credit card payments went to expense after the purchases were already recorded. Loan payments never reduced the loan. Transfers between companies became miscellaneous expenses.
But everything has a category.
Lovely.
I see these files in my cleanup work at For The Love of Bookkeepers. They also inform how I’m building BrokenBooks, a workflow system for bookkeeping and accounting professionals managing QuickBooks Online engagements.
Once you start investigating those transactions, there’s a lot to keep track of: supporting records, questions for the client, corrections, and decisions the next person needs to understand.
“Categorized” barely introduces the subject.
The customer paid. Why is the invoice still open?
An invoice is already in QuickBooks. The customer sends a payment, and the deposit appears in the bank feed.
Someone selects an income category and adds it.
The bank register contains the deposit. The invoice still shows the customer owes money. There may also be another sales entry alongside the sale already recorded through the invoice.
Then the reminder goes out.
The customer replies with proof of payment, which is an awkward way to discover we haven’t finished accounting for the money we received.
Was the payment already entered? Does it cover several invoices? Did a processor deduct fees? Is the deposit a batch of customer payments?
“Income” doesn’t answer any of those questions.
During a review, I need to document the issue, the records supporting it, and anything still needed before deciding on the correction. That is the work behind the BrokenBooks diagnostic framework.
An open invoice is an observation. A customer saying “I paid that” adds information. The payment history and supporting records still need review.
Those are different stages of understanding the problem.
The credit card payment is not another purchase
The business buys materials with a credit card. Those purchases are entered in the credit card account.
Later, the checking account pays the card.
Someone categorizes that withdrawal as materials.
Now the books contain the purchases and another expense for paying for the purchases. The credit card register may still be missing the payment that reduces the amount owed.
The checking account shows money leaving. The credit card account is waiting to hear about it.
Reviewing the payment means looking across both accounts. Was it already recorded on the card side? Is downloaded activity waiting to be matched? Is there a duplicate account from an earlier reconnection?
The eventual correction might take seconds.
The investigation needs to remain understandable after those seconds are over.
That continuity is part of the cleanup workflow I’m building in BrokenBooks: keeping the findings, supporting information, and corrective work connected as the engagement progresses.
“Fixed credit card” is going to be a disappointing note when someone asks what changed six months later.
The lender says paid off. The books disagree.
Loan payments have been going to expense every month.
The bank activity is entered consistently. The descriptions even include the loan number.
The liability hasn’t moved.
Now the owner says the loan is paid off, and the Balance Sheet is carrying it like a family heirloom.
The lender’s records need to explain the principal, interest, and other charges. The original loan balance may need attention too. There could be a financed purchase recorded incorrectly or an earlier adjustment affecting the account.
A request for “loan documents” leaves plenty of room for interpretation.
Which lender? Which loan? The original agreement, a particular statement, or the final payoff confirmation?
These are the details I’m accounting for in the BrokenBooks client portal and request workflows. The request needs context. The response needs to remain connected to the work.
Receiving a document is progress.
We still need to know whether it answers the question.
“They’re all my companies.”
Yes. Which one incurred the expense?
One company pays a bill for another. The withdrawal gets categorized as an expense in the paying company.
What happened in the company that received the benefit?
Was the bill already entered there? Does that company owe the paying business? Was this a reimbursement, an advance, or part of another arrangement?
The owner may know exactly why the money moved. Neither file has necessarily been given that information.
The explanation belongs with the review. So do the supporting records and the professional’s conclusion.
A client’s answer and an accounting determination aren’t interchangeable. “I own both companies” explains the relationship. There is still some accounting to do.
The work needs somewhere to live
An empty bank feed is visible progress.
The rest of the engagement includes less convenient things to count: questions answered, balances supported, corrections reviewed, and unresolved items clearly identified.
That is where BrokenBooks fits into my work.
I’m building a place for the review, client clarification, scope, corrective work, documents, and handoff to stay connected. The person returning to the engagement should be able to follow what was found and what happened next.
They shouldn’t need the original reviewer standing beside them, narrating from memory.
BrokenBooks is currently in private-beta testing, with development and validation continuing. You can see how the workflow fits together or get product updates as it develops.
I enjoy the investigation. Give me conflicting records and a balance that makes no sense, and I’m going to want to know what happened.
I just wish people would stop calling the work that prevents all this “picking a category.”
