What Is the Most Important Phase in Bookkeeping?
Bookkeeping isn’t a single action-it’s a process made up of phases. And if you skip or mishandle just one, it can throw off everything else.
But what’s the most important phase? Most business owners assume it’s data entry or reconciliation. In reality, it’s the review and closing phase-where reports are validated, checked, and finalized.
Let’s break down each phase, why the review stage matters most, and how RemoteBooksOnline ensures your books don’t just get done-they get done right.
The 5 Core Phases of Bookkeeping
Here’s how bookkeeping typically works:
- Transaction Entry
Recording income, expenses, transfers, and payments - Categorization
Assigning each transaction to the right account - Reconciliation
Matching transactions to bank and credit card statements - Review and Closing (This is the most important phase)
Double-checking accuracy, spotting errors, and finalizing reports - Reporting
Delivering P&L, balance sheets, and cash flow summaries
If your books skip the review phase, your reports might look complete-but they’ll be wrong.
Why the Review Phase Is So Critical
- It catches misclassified expenses (e.g., capital items booked as operating costs)
- Identifies missing transactions that weren’t imported from your bank
- Flags duplicate entries
- Ensures loan payments are split correctly between interest and principal
- Verifies closing balances match actual cash
RemoteBooksOnline includes a CPA review of your books every month. We don’t just post numbers-we check them for accuracy, context, and compliance.
Real-World Use Case: Design Firm with Cash Flow Issues
Tina runs a small graphic design agency. Her previous freelancer sent monthly QuickBooks reports, but Tina kept running into cash flow problems.
When she joined RemoteBooksOnline, we discovered:
- Client payments were booked as income twice
- Software subscriptions were showing under “Travel”
- A large refund was completely missing
Once we cleaned up the errors in her QuickBooks chart of accounts and reviewed her books properly, Tina finally had reliable financials-and stopped overdrafting her business account.
How RemoteBooksOnline Manages the Review Process
Our review phase includes:
- Manual checks on categorization and reconciliation
- CPA-level review of all core reports
- Red-flag detection (e.g., negative balances, mismatched totals)
- Monthly close-out to lock clean books
- Catch-up bookkeeping and cleanup if prior books are messy
We don’t just automate-we audit, validate, and protect your financial clarity.
Why DIY Bookkeeping Often Skips This Step
Most DIYers or low-cost freelancers stop at reconciliation. That means:
- You get reports that look right but aren’t reliable
- Your tax preparer will have to clean everything up (and bill you for it)
- You may miss deductible expenses or misreport revenue
With our monthly bookkeeping service, every report is reviewed-not just generated.
FAQs
Isn’t reconciliation enough to trust the books?
No. Reconciliation ensures bank totals match-not that everything is categorized correctly. Review is where that gets validated.
Do you close books monthly or annually?
We close books monthly to avoid surprises and keep your records clean year-round.
What if I’m behind or the books are a mess?
Our catch-up bookkeeping includes full cleanup and review, no matter how far behind you are.
How do you handle QuickBooks review?
We assign QuickBooks-certified bookkeepers who audit and verify your reports before closing each month.
Final Thought
Data entry isn’t enough. If your books aren’t reviewed, closed, and audited monthly, you’re operating in the dark.
We make sure your books don’t just look clean-they are clean. So your business decisions are based on reality, not guesswork.
Want accurate, CPA-reviewed books every month? Request a quote and let’s close this month right.
If your current bookkeeper is only posting transactions and sending PDFs, you’re missing the most important part of the process. Our monthly bookkeeping service includes full review and closing, so you can trust every number you see. Need to clean up old books first? Our catch-up bookkeeping packages include full chart and transaction audits.
Already using QuickBooks? Our QuickBooks bookkeeping team will clean, review, and close your books monthly-accurately.
