How to catch up on bookkeeping when you're months behind

1. Find the last reliable point

You need a starting line you trust. For most businesses that is the end of the last tax year your CPA prepared a return for, because the balances on that return are known. If QuickBooks was reconciled more recently than that and nobody has touched those months since, you can start later.

Ask your CPA for the year-end balance sheet from the last return. It gives you the balances your catch-up should build from.

2. Gather everything before you start

• Statements for every bank account, credit card, loan and line of credit, for every month you are catching up.
• Payroll reports from your payroll provider for the same period.
• Payment processor reports if customers pay by card, such as Stripe, Square or PayPal payout reports.
• Invoices and bills if you track what customers owe you or what you owe vendors.
• Receipts or notes for anything a statement will not explain, such as large purchases or owner transfers.

Bank feeds often only reach back a limited number of months, so older periods usually come from statement or transaction files downloaded directly from the bank.

3. Work forward one month at a time

For each month, in order:

1. Bring in every transaction for every account, from the feed or from a downloaded file.
2. Categorize them. Match deposits to invoices you already recorded instead of adding them again. Record moves between your own accounts as transfers, not income or expenses.
3. Record payroll from the payroll reports, split into wages, taxes and benefits.
4. Reconcile every account to that month's statement, credit cards included.
5. Only then move on. A month that does not reconcile will not fix itself later, and every month after it will be off by the same amount.

4. Clean up what is left over

At the end, check for balances in uncategorized income or expense, deposits waiting to be matched, and old unpaid invoices or bills that were actually settled. Each one either needs a real answer or a note for your CPA.

5. Hand it to your CPA with a short note

Send the reconciled file with a short list of decisions you were not sure about, such as whether a purchase is equipment or an expense, or how an owner payment should be treated. Those are tax decisions, and your CPA will want to make them.

How long does catching up take?

It depends on the number of months, the number of accounts and how quickly statements arrive. A single checking account a few months behind can take an afternoon. Several accounts, payroll and a year or more of history is a project. The part people underestimate is gathering statements, so start there.

When to get help

Doing it yourself makes sense when you are a few months behind with one or two accounts. It is worth handing off when you are a year or more behind, when accounts will not reconcile and you cannot find why, or when a tax deadline is close. That is what catch-up bookkeeping is for. Once you are current, monthly bookkeeping keeps you there.

Common questions

Where do I start if I'm a year or more behind on bookkeeping?

Start at the end of the last year your CPA filed a return for, gather every statement since then, and work forward one month at a time, reconciling each month before moving on.

Can I just import all the bank transactions at once?

You can import them, but categorize and reconcile one month at a time. Bulk-adding everything without reconciling tends to create duplicates and hides missing transactions.

Do I need receipts to catch up my books?

Statements are the backbone. Receipts matter for large purchases, anything unusual, and anything your CPA asks about. Keep them, but do not let missing receipts stop you from reconciling.

This guide is general information about bookkeeping, not tax or legal advice. Rules change, so check the details with your CPA before you act on them.