Getting Back on Track: A Guide to Catch Up Bookkeeping
As a business owner, you have a lot of responsibilities. If you’re like many other business owners, you try to handle most things yourself, including your bookkeeping. The question is – are your books up to date?
Business owners have to-do lists that are miles long, and bookkeeping often falls by the wayside. To make matters worse, many owners underestimate the complexity of bookkeeping.
In fact, one study found that 21% of small business owners don’t understand enough about their bookkeeping, yet many of them are still handling their own books.
If you’ve fallen behind on your books or find yourself feeling overwhelmed by the process, don’t panic. Catch up bookkeeping can help you get back on track.
What is Catch Up Bookkeeping?
Think of catch up bookkeeping as spring cleaning for your books. It’s a process that involves reviewing, organizing and updating your financial records to ensure they’re up-to-date and accurate.
If you want to make data-backed, informed decisions about your business, your financial records must be error-free and contain the most recent data. That’s where catch up bookkeeping services come into play.
The process also provides you with a clear picture of your business’s financial health and performance.
Why is Catch Up Bookkeeping Important?
When you fall behind on your books, you lose sight of your business’s finances and compromise your ability to make smart, data-driven decisions.
But neglecting your books can have other consequences, like:
- Missed tax deductions
- Difficulty applying for loans
Catch up bookkeeping can help you avoid these consequences and put you back in control of your finances.
How Does Catch Up Bookkeeping Work?
Catch up bookkeeping requires you to follow key steps to get your books in order. While every service’s approach may vary, most will begin with these steps:
1. Evaluation and Document Gathering
Bookkeeping catch up services always start with an in-depth look at your current financial situation. The person(s) working on your books will need to:
- Review statements
- Review transactions
- Understand what’s happening in your business
- And more
During this step, the bookkeeper will touch base with you on any questions they have that only you or someone in your organization can answer.
2. Categorize and Organize Your Books
Once the evaluation is complete and the bookkeeper better understands your books, it will be time to organize and categorize all of the available data. During this step, the professional(s) will identify and work through all of your transactions one-by-one to ensure they’re properly categorized.
Recommendations may be given that you can use to create protocols to organize all items in the future correctly.
3. Reconciliation
It’s important to verify that your data is accurate, so the next step is to compare your figures with your bank and credit card statements. While this process may be tedious, it will help you catch errors that you may have made in previous steps.
For example, let’s say that a payment to a vendor was incorrectly recorded twice during a month, and this wasn’t caught during the prior steps. When the reconciliation was performed, this would be caught.
4. Evaluate and Adjust Your Financial Reports
Once you’ve reconciled financial records with your bank statements, the next step is to evaluate and adjust your financial reports.
Adjusting your reports may be simple or complex, depending on your business and how you manage your accounting.
During this stage, you’ll also want to review your financial reports. At minimum, we recommend reviewing your profit and loss statement, balance sheet, and cash flow statement. These three statements will help you understand the help of your business.
5. Put Systems in Place to Prevent Future Backlog
Catch up bookkeeping services can help you get back on track, but your goal should be to avoid getting off track in the first place.
Once everything is back in order, make it a point to implement systems that prevent future backlog and the need for bookkeeping clean-up.
Here are some tips:
- Add time in your calendar every week to update your books
- Automate the process as much as possible to save time and reduce errors
Making bookkeeping a part of your regular schedule and streamlining the process can help ensure that your books are always up to date.
Why You Should Consider Bookkeeping Catch Up Services
Catch up bookkeeping will help you keep your books current and error-free. Your books allow you to stand on a solid financial foundation, but as your business grows, management becomes more complex and time-consuming.
Outsourced bookkeeping is a small expense that allows you to:
- Free up crucial time to focus on core business tasks
- Reduce potential backlogs
- Find and correct errors
- Stop errors from the start
- Make informed business decisions
Spending time on your business’ bookkeeping stops you from dedicating time to tasks that can help you fill your sales pipeline and close deals. Leave catch up bookkeeping to the professionals so that you can focus on key revenue-generating tasks.To learn more about catch up bookkeeping or how we can help you with your bookkeeping needs, schedule a consultation now!
