Catch-up bookkeeping becomes essential when you know your accounting is a mess. However, don’t be a firm that just accepts that as their fate. Handling
financials and messiness aren’t mutually inclusive.
What’s more, we’d ask that you don’t consider a broken system as a fact of
bookkeeping. After all, every time you look at it, it adds to your stress. In addition to that, it is going to limit the opportunities for business success. Finally, you waste more time and spend money on keeping such a system functional.
Determine the Presence of a Mess before Playing Catch-Up
Before guidance on how to do a years’ worth of bookkeeping in one day,
determine if there even is a mess. Don’t know which indicators to look at? Try these:
Even the thought of contacting your tax preparer leaves you in tears – and
A stack of paper and receipts sits permanently on your desk
Pulling a Profit and Loss statement is like pulling teeth
Both your practice management/invoice and accounting systems work
Double-entry for transactions are the norm
Prioritize the Fixing
Catch-up bookkeeping becomes necessary for a business if:
You Have a Costly Mess
We have unearthed dozens of unpaid invoices when working with our clients. They fall through the cracks. Consequently, the business keeps losing money. There’s another way this mess could be harming your business. At tax time, you are sorting things out so you miss out on strategic advice that can benefit you. In addition to those disadvantages, here’s one more. A lack of insight will prevent you from determining which part of your business is doing better than the others. Also, you won’t be able to see margins. Hence, making informed decisions that build your business up becomes almost impossible!
The Mess Turns into a Risk
You could be putting your firm at an increased risk of the mishandling of funds. Trust accounting is never smart. You could also be falsely reporting revenue albeit unknowingly.
Getting Down to the Fixing via Catch-Up Bookkeeping
Essentially, these steps outline the process of catch-up bookkeeping:
Target the Accounting System
The system is like a house. You build it on the sand, and it will take your business down. But if you rebuild it after wiping the transactions slate clean, you can get out of the quagmire.
Grab your Tools
Most attorneys prefer practice management systems. Internet-based
entrepreneurs, on the other hand, work best with invoicing systems. You should be comfortable with your new accounting software. For a comprehensive
financial system, integrate both.
Create a Chart of Accounts
This structure lists your business’ accounts. So, it will be immensely helpful in booking transactions to the proper accounts.
Regularly Reconcile for Seamless Catch-Up Bookkeeping
Next, categorize everywhere a transaction takes place. For example, bills will require reconciliation with expense accounts first. Then you must tie them to receipts. Payments should be associated with a revenue account and
invoice. You’ll find both expense and revenue accounts in the chart you set up beforehand. What does regular reconciling do? It provides you with real-time financial reports and information. Those will be instrumental in guiding your business. Besides that, receiving reports at the click of a button will make tax season infinitely easier too.
Know When to Ask for Directions
Most importantly, recognize when it is time to stop attempting reconciling
transactions yourself. We aren’t just old hands at this. AKIF CPA will also quote you a highly reasonable catch-up bookkeeping price.
Briefly, we begin with a QBO Diagnostic. This is an in-depth review that can help us diagnose your transactional problems. After that, you get a report of our expert findings. Next, our team works on your QuickBooks. In the end, you get the true picture of your financials and squeaky clean books. So, contact us now!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Akif CPA will not be held liable for any problems that arise from the usage of the information provided on this page.