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What Is Catch Up Bookkeeping? How It Works & Examples

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A woman sitting in front of a laptop with her head in her hands in a frustrated posture.

 

Do you need catch up bookkeeping? Don’t be shy, and don’t worry about getting it done!

 

Running a business is not easy. You can forget some processes or push them to the side in favor of some other urgent task. Bookkeeping can become one of these ignored tasks, especially because it can be tedious and time-consuming. 

 

Perhaps you have gotten into a situation where you put off your bookkeeping for a few days and those days turned into weeks and months. Now you find yourself faced with the seemingly overwhelming task of compiling and reconciling all the receipts, invoices, and other necessary information that got backed up for all that time. What’s worse is that tax season is looming around the corner. 

 

Is your situation hopeless? Absolutely not! You’re not the only business that struggles with this and catch up bookkeeping services can come to the rescue. 

 

What Is Catch Up Bookkeeping?

 

Catch up bookkeeping is the solution for businesses that may have slacked on their own bookkeeping. It matters not if it was because you got too busy, are inexperienced, opted to delay bookkeeping in favor of developing other areas of business, or for whatever reason couldn’t keep your books up-to-date for a while. 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 can show the state of your business’s general financial health. During this process, you may discover the areas of neglect that need immediate attention and correcting. You may even find a financial knot in one of your processes that has been holding you back from scaling your business as quickly as you want to. 

 

Of course, prevention is better than a cure. However, catch-up bookkeeping can be a lifesaver, especially for a small start-up.

 

When Does Your Business Need Catch Up Bookkeeping?

 

A woman covering her face with a book.

 

There are certain grave cases where catch up booking is crucial. For instance, the last-minute rush to be tax compliant and avoid penalties. However, you don’t need to wait for a situation like this to happen before you take measures to bring your books up to date. The earlier you address the issue, the better. Here are some instances where you may need to outsource bookkeeping to get caught up. 

 

1. Reconciling Receipts for all Modes of Payment 

 

Are all your modes of payment accounted for? For instance, if you pay for business expenses via a digital wallet, are you making sure to collect e-receipts or other proofs of purchase? Do you have it connected to your accounting software along with your credit card? If not, then for the duration you’ve been using these modes of payment, you haven’t been tracking the money going in or out. You may need to hire a bookkeeper to reconcile all the digital and physical receipts of expenses, invoices, and other transaction records into your general ledger. These transaction records are essential for accurate bookkeeping and reporting.

 

2. Software Migration

 

Perhaps your current accounting software doesn’t offer the type of reporting you’re looking for. Maybe the current software cannot accommodate the size of your growing business and you wish to upgrade to a more sophisticated suite. You want to ensure the complete and accurate transfer and labeling of all your data. Before migrating, you may need help to make sure all your records are up to date in the current software. 

 

3. Financial Reporting and Funding 

 

When a business needs to prepare accurate financial reports for investors or stakeholders, the lack of accuracy in records means inaccurate reporting and a potential hit to the company’s reputation. If a potential investor thinks you do not care about keeping your finances in order, how likely do you think it is that they will risk putting their money into your business? I can say the same about stakeholders who could back out due to sloppy financial records.

 

How Much Does It Cost?

 

Catch up bookkeeping can cost you a little or a lot. It all depends on how long you have ignored your books, and how messy your records are. Generally speaking, you will probably pay between $5 and $20 per hour to get your books in order. The rate depends on the complexity of the job. For instance, if your records are incomplete, you will need a more skilled bookkeeper to figure out where the trail went cold and how to put together the missing pieces.

 

From a service like EcomBalance, you can pay anywhere from $250 per month to $1,000+ per month for the Catch Up work, depending on the size of your business and the complexity of the catch up work.

 

Who Is the Best Person to Catch Up My Books?

 

amazon accountant 5 catch up bookkkeeping

 

You can have it handled in-house by hiring an accounting team so you can work more closely with them. However, this team would need to handle both catch-up work and the bookkeeping and accounting for the current month. This might spread them too thin.

 

On the other hand, you can hire an outsourced team to manage the catch up while you or your in-house team handles current transactions. They can also provide a fresh perspective on your past accounting practices and give you insights into mistakes you or your accounting team may have made.

 

What Happens During a Catch Up Project?

 

Catch up bookkeeping is all about giving attention to neglected tasks and righting accounting wrongs. This process will involve the catch-up bookkeeper or team looking through old company accounting records and working their way to the present. They will reconcile your accounts payable, accounts receivable, bank statements, unfiled tax documents, or other bad financial data.

 

When Should I Hire Someone to Catch Up my Books?

 

amazon accountant 2 catch up bookkeeping team

 

Some of the most common ways your books can fall behind are if your business starts booming at a faster pace than you can keep up with or if your current bookkeeper decides to resign and you did not line up a replacement. Whether it’s long-term or short-term neglect, a catch up bookkeeping service can ensure the financial data you’re working with is all up to date. 

 

Depending on the size of your business or the amount of catch up bookkeeping needed, you may need to hire a team of bookkeepers rather than an individual.

 

Conclusion

 

Financial data mismanagement can mean catastrophe for the future of a business. Poor bookkeeping leads to inaccurate reporting, which compromises the integrity and stability of the business. This results in financial loss or loss of funding. Your business could even incur government penalties due to unfiled transaction records. 

 

If you find yourself in a situation where you’ve slipped on your bookkeeping responsibilities, you can rely on catch up bookkeeping services to help get you back on your feet. Hopefully, you won’t need their help more than once!

 

Want bookkeeping off your plate? We’ve got you! Get started, Speak w/ a Founder, or Schedule a Callback

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Julia Valdez

Julia Valdez

Julia Valdez is Freelance Writer and Agency Owner. She regularly writes on topics related to Business Finances, Growth, Hiring, Entrepreneurship, and more.

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