Common Questions: Bookkeeping Catch-Up
Are you behind on your bookkeeping? If you have been putting off your bookkeeping for the past few months (or years), there are a number of reasons you might be interested in adding bookkeeping catch-up to your list of to-dos. It might be that tax deadlines are fast approaching, and you need reliable reports to get a maximum tax write off. Or it may be that your business is growing and you are catching the eye of investors who are interested in knowing the health of your business.
Whatever the reason may be, it is important that your bookkeeping remains accurate and reliable so you can use your financial data to make educated decisions. When it comes to bookkeeping catch-up though, many small business owners have questions. Today we are answering the common questions business owners have when it comes to bookkeeping catch-up.
How is ‘Catch-Up’ bookkeeping different from periodic bookkeeping?
How long will it take to get my books up to date?
Can I do my own ‘catch-up bookkeeping’?
How is it ‘Bookkeeping Catch-Up’ different from Periodic Bookkeeping?
Many business owners who are behind on their bookkeeping understandably wonder how ‘bookkeeping catch-up’ is different from periodic bookkeeping. The answer lies primarily in the workload and when the work is being done.
Oftentimes, when it comes to `bookkeeping batch-up, a businesses' main goal is to get their books up to date and accurate as soon as possible in order to file taxes and remain compliant. This means specific reporting pertaining to operating, oftentimes becomes less of a priority, and thus less specific bookkeeping work is needed to bring the books up to date with the goal of tax filing.
For example, a business who is rushing to file taxes at the last minute, may not be particularly interested in what their best selling products are. This is an unfortunate consequence of waiting till the last minute to do bookkeeping, since specific information like this can be a valuable insight to business decisions throughout the year.
How long will it take to get my books up to date?
Besides the obvious caveat of how many months or years of bookkeeping needs to be completed to get your books up to date, the amount of time catch-up bookkeeping takes also depends on a variety of factors such as your business’ workflow, volume of transactions, and tax filing requirements. It is important for you to communicate with your bookkeeper or accountant about the specifics of your business before starting a bookkeeping clean-up project. Before you hire a bookkeeper to bring your books up to date, make sure you discuss the following:
Important Upcoming Deadlines
Your Business Workflow (Do you send and receive invoices? Do you separate income into classes? Do you use third-party payment apps or digital platforms to sell or receive payments?)
Volume of transactions.
Reporting Needs (Do you need to file sales tax? Do you need to track 1099 contractors? Do you need to track income by property?)
Can I do my own ‘catch-up bookkeeping’?
Yes! If you are a brand new business and have less than 100 transactions per month, and you have the extra time to dedicate to bookkeeping, then doing your own bookkeeping for the year or past few months is a great way to save money. Check out our “How to do your own bookkeeping” for how you can do your own bookkeeping.
On the flip side, if you have an established business with over 100 transactions per month, or you have a more complicated workflow when it comes to running your business, then it might be best to work with an experienced bookkeeping team to get your books up to date. Not only will it save you time and money, but you’ll also have a professional team trained to produce insightful reports and be there to make sure you stay compliant.
Do you have any questions about this subject? Contact a bookkeeper from our Lightning Bookkeeping team and they’ll be happy to answer any questions you have about our bookkeeping catch-up services or just catch-up bookkeeping in general.
