A business bank account is required if you form a business entity like an LLC or corporation. And while it’s optional for a sole proprietorship or partnership, it’s highly recommended. This approach also works for breaking out payroll taxes from gross wages. If either of these assumptions are not true, they must first be fixed. The reconciliation discrepancy must be investigated, and the deleted transaction(s) replaced.

Monthly Bookkeeping

In other words, it’s essential to have accurate books when you want to refine your company’s strategies. Your financial performance can be used to set long-term and short-term goals, indicating when you’ve reached these benchmarks. Every entrepreneur should regularly review their financial performance to find ways to hone their strategies. Accurate financial records can highlight areas in which you need to cut expenses, while also illustrating patterns in spending.

• Catch up booking is all about helping you bring those books back on track, catching and correcting any mistakes, and getting you prepared and compliant for tax season.
• Catch-up bookkeeping helps individuals organize their financial records.
• One of the easiest ways to start on the right foot is to get and use a dedicated business bank account.
• The company’s customer service team answers phone calls when customers reach out.
• It is best to check at the end of each period that you reconciled that the uncleared items are valid and address at that time.
• Running a business is demanding, and keeping track of your finances can be a never-ending chore.
• Look for a provider with experience catching up on financial records for businesses similar to yours.

Step 1: Gather your receipts

If you’ve paid a contractor over $600, you need a Form W-9 and a Form 1099-MISC. If you don’t have a professional bookkeeper you can use Quickbooks or other software to help you with the reconciling process. Make sure to have bills for all vendors you’ve worked with and are still working with. If you’re missing some vendor receipts make sure you contact them because it can make a huge difference for your overall tax deductions.

• If your books are severely outdated, it’s wise to consult with a professional bookkeeper or accountant.
• This is where Catch-up Bookkeeping saves the day by following a systematic approach to organize and reconcile your financial data.
• After you enter transactions you will be prompted to “reconcile” accounts, which is basically a process of making sure everything is accurately entered.
• You’re not even sure if you logged that big software purchase or the client dinner from six months ago.
• Tackling catch-up Bookkeeping is like piecing together a financial puzzle — methodical, detailed, and, when done right, incredibly satisfying.

Bookkeeping 101 for Small Business: Everything You Need to Know

This step ensures your books are clean, up-to-date, and ready for review. 👉 Compare each transaction in your accounting system with bookkeeping and payroll services bank records. For instance, if a business expense was accidentally recorded as personal, it’s adjusted so your books are accurate and compliant.

Step 4: Review Financial Reports

Additionally, having accurate and up-to-date financial records is crucial if you’re facing an audit or needing to file your taxes. Trusted by over 10,000 U.S. business owners, doola specializes in helping businesses that have fallen behind on their bookkeeping, tax filings, or financial records. We will review all transactions since your last recorded entry, including sales invoices, purchase receipts, bank statements, and credit card statements. If you’re reading this article, it’s likely that catch up accounting you’re wanting to do everything yourself when it comes to bookkeeping and filing your taxes. The ideal candidate for this role should possess a foundational understanding of accounting principles and practices and familiarity with QBO or Xero accounting software.

If there are undeposited funds, you need to determine if they should be cleared before or after the bank reconciliations. Frequent reviews keep you aware of your financial standing and prevent surprises. Well-maintained books build trust with stakeholders, including banks and investors. Double-check for missing entries, duplicate transactions, or misclassifications. If you have any question related to our services, feel free to contact us right away and we will get back to you as soon as possible.

Verified reviews from real guests.

You’ll also need to choose between using a calendar year or fiscal year. A calendar year, January 1 to December 31, is the most popular choice for many small businesses, especially those with relatively steady revenue throughout the year. It’s simpler to manage since it aligns with personal tax returns and most standard financial reporting timeframes. Many accounting software packages default to calendar year reporting, making it a convenient choice for businesses just starting out.

What is Catch Up Bookkeeping?

• Accounting software plays an important role in ensuring efficiency and accuracy in the context of catch-up bookkeeping.
• They will reconcile your accounts payable, accounts receivable, bank statements, unfiled tax documents, or other bad financial data.
• Get a bookkeeper who has an accounting degree and credentials, who can help you work with banks and government entities directly for funding and compliance,” he recommends.
• If you’re running a one-person show, though — i.e., a wide variety of customizable reports is not a priority — this is likely the pick for you.
• Once the reconciliations are done, checking to ensure the Open Invoices and Unpaid Bills reports are accurate is a good next step.
• For example, retail businesses might prefer a fiscal year ending January 31 to capture the complete holiday season in one reporting period.

Whether it’s a recording transactions month or a year’s worth of neglected entries, catching up ensures you regain control of your financial health. Recording revenues, expenses, liabilities, and receivables set you up to better track when payments are due and when money comes into your bank accounts. As a result, you can more intelligently manage your cash flow and never get caught in a position where you’re short on cash and fall behind.