What To Do If You’re 6–24 Months Behind on Bookkeeping
Introduction
Failing to keep up with bookkeeping can present significant challenges for any business owner. When you lose track of your financial records, it affects your financial clarity and decision-making capabilities, making it difficult to assess the health of your business. The goal is to catch up without unnecessary stress and reestablish a reliable financial practice. Here’s how to get back on track efficiently.
Assessing the Situation
The first step in catching up is determining how far behind you are, whether it’s 6, 12, or even 24 months. Review your current financial records and identify any gaps. Please take a close look at your transactions and how they impact your taxes, reporting, and cash flow. Understanding the extent of the backlog will allow you to prioritize your cleanup efforts effectively.
Prioritizing Catch-Up Bookkeeping Tasks
Next, identify which accounts, transactions, and reports need immediate attention. Start with critical areas like bank accounts and credit card statements where discrepancies are most likely. Setting realistic timelines and goals for catching up will help you stay focused on the task. Utilize QuickBooks to streamline the process by leveraging its reporting and categorization features.
Hiring Professional Bookkeeping Services
If the thought of catching up feels overwhelming, hiring a professional bookkeeper can facilitate a quicker turnaround. A bookkeeper brings expertise to the table, ensuring accuracy and compliance while saving you valuable time. You’ll also need to decide whether to hire in-house staff or seek outsourced bookkeeping support, considering factors like budget and the complexity of your financial needs.
Step-by-Step Catch-Up Bookkeeping Process
To effectively catch up, follow this structured process:
Gather All Financial Records and Statements: Collect statements, invoices, receipts, and any documentation from the past months.
Reconcile Bank and Credit Card Accounts: Ensure that all transactions match up, correcting any discrepancies you uncover.
Categorize Past Transactions Correctly: Update your records by assigning the correct categories to each transaction to maintain accurate financial reporting.
Update Missing Invoices, Bills, and Receipts: Ensure all revenue and expenses are accounted for to avoid financial inaccuracies.
Generate Accurate Financial Reports to Reflect True Business Status: After your records are updated, create reports like Profit & Loss and Balance Sheet to assess your current financial health.
Avoiding Stress While Catching Up
To make the catch-up process manageable, break the tasks into smaller, digestible chunks. Use bookkeeping tools like QuickBooks to help simplify the workload. Regularly monitor your progress and celebrate milestones along the way, such as completing a month’s worth of entries or reconciling an account.
Staying Current After Catch-Up
Once you've caught up, it’s essential to establish regular bookkeeping routines to prevent falling behind again. Automate recurring transactions and set up reminders for tasks. Regularly schedule monthly or quarterly reviews of your books to ensure your financial records remain organized and up-to-date, allowing you to maintain financial clarity moving forward.
In summary, catching up on 6–24 months of bookkeeping doesn’t have to be overwhelming. By assessing your situation, prioritizing tasks, possibly seeking professional help, and implementing a solid routine, you can restore order to your financial records and make informed business decisions confidently. If you have any questions or need additional guidance, feel free to reach out!
