Paid diagnostic Review: every bookkeeper's weapon for taking on a big QBO cleanup
Hi, I’m Veronica Wasek and I help virtual
bookkeeping pros to become confident
professionals and business owners.
In this video,
talk about the paid diagnostic review
and why it’s every bookkeeper’s weapon
for taking on QuickBooks
online cleanup projects.
After doing hundreds of cleanups,
the number one tool that I have used
consistently and that has led
to profitable cleanups and also
providing additional services to my
clients is the paid diagnostic review.
I’ll explain what the paid diagnostic
review is and how you can use it
effectively for your bookkeeping business.
Okay, so let’s start
by defining what is a cleanup.
A cleanup is when we’re taking a client
who’s using QuickBooks online and they
have messy and incomplete books.
Our goal is to review the books,
catch them up, fix the books,
and reconcile them.
And the end result should be that we are
now providing the client with complete,
accurate and tax ready books.
But there are a lot of challenges
when taking on cleanup clients.
You’re not getting paid to diagnose
the books ahead of time.
You have no idea what’s
wrong with the books.
You have no idea how to price the clean up
because you don’t even
what you’re getting into.
You’re pricing by the hour but the client
gets sticker shock when
they get your invoice.
And that happened to me quite
a bit in the beginning.
There’s no agreement with the client
on a desired outcome, and the client
tries to control the process.
The strategy that I developed to overcome
all of these challenges is
doing a paid diagnostic Review.
The first goal when doing the paid
diagnostic review is to get a full scope
of work before you cleanup
or catch up the books.
So just like a doctor would diagnose you
before prescribing a treatment,
doing the diagnostic review allows you
to first get a full scope of work before
you ever take on a large project,
such as a cleanup.
The second goal is to get
paid to assess the books.
The paid diagnostic
review is a paid project.
It allows you to assess the health
of your clients QuickBooks Online data.
It helps you to diagnose problems
and assess the level of cleanup needed.
It allows you to identify transactions
that need to be brought up to date.
You get a clear scope of work before you
ever take on the cleanup,
and also it enables you to offer
additional services to your client.
So how do we offer a Paid Diagnostic
review to our prospective clients?
When talking to a prospective client,
they will generally tell you
all of their pain points.
They’ll tell you that their books are
messed up, that maybe their previous
bookkeeper disappeared,
that they’ve tried to do their own books
and it didn’t go well,
that they connected QuickBooks to an app,
and that didn’t go well either.
So they’ll tell you all of these things
and you need to train yourself
to listen for those things.
So when they finish telling you all their
pain points, then you’re going
to recommend the paid diagnostic review.
Notice how I use the word “recommend”
because we’re not going to sell.
We’re going to recommend the service.
Here is what you can say:
“I recommend doing paid diagnostic review
review of your books so that I can get
a clear picture of what’s
wrong with your books.
At the end of my review,
I will go over my findings with you.
I will also give you upfront
pricing for my services.”
Now let’s go over some workflow basics.
When doing the paid diagnostic review:
we’re going to perform the paid diagnostic
review, we’re going to prepare a report
of findings and recommendations and go
over that report with our client,
and then we’re going to recommend
additional services.
So what goes into performing
the diagnostic review?
It’s really important to use a checklist
so that you can cover all
of the areas that you need to review.
For example, the things that you need
to be looking at: whether the balance
sheet on the books reconciles to a balance
sheet on the tax return if there is one.
Banking and Credit Card Accounts.
Undeposited Funds.
Profit and Loss Accounts.
Balance Sheet Accounts.
Accounts Receivable
and Accounts Payable agings.
The chart of accounts. Products
and services list. And,
areas such as payroll,
inventory and sales taxes if they’re
tracking that in QuickBooks Online.
Here’s an excerpt from my
diagnostic review checklist.
This is what I review
for in the income section.
I’m looking for unusual balances
in the income account,
uncategorized income,
balances in sales of product income or
services,
any loan proceeds recorded as income,
any sales taxes recorded
as a deduction to income.
There may be more things that I will check
for depending on the type
of client and their industry.
I’m looking for any errors
that have been made.
I will make a note on my checklist and I
will also make a note of additional
details such as number of transactions
found, the date range,
and the dollar amount of the transactions
that need to be corrected.
All right, so let’s talk about the report
of findings and recommendations.
Here’s a sample cover sheet of the report
of findings and recommendations.
As you can see, it is a professional
report that we are providing our client.
Here’s an excerpt from my sample reported
findings and recommendations
for the Profit and Loss review.
And as you can see,
we’re listing all of the items that we
found and the recommendations
for getting all of that cleaned up.
After you present the report of findings
and recommendations to your clients,
your next goal is to then present
additional services to them,
such as cleaning up their books,
catching them up, monthly bookkeeping,
or coaching and training.
Are you using paid diagnostic reviews?
Let me know in the comments.
Let’s get that conversation going.
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I’ll see you next time.
