Almost every business falls behind on the books at some point — a busy quarter, a bookkeeper who quit, a year that got away. It feels like a character flaw. It is a project, and projects have plans.
First, decide how far back to go
You do not always need to rebuild everything. Work backward from why you need it:
- Tax filing: you need clean books for every open tax year — generally the last filed year forward, plus the current year.
- A loan or line of credit: lenders usually want the last two full years plus year-to-date.
- A sale or raise: buyers and investors typically diligence three years.
- Just to run the business: the current year, cleanly, is often enough to move forward — with a plan to formalise prior years before the next deadline.
The catch-up sequence
1. Gather the sources
Bank and credit-card statements for every account and every month in scope (PDFs, not just a spreadsheet export). Loan statements and amortisation schedules. Payroll reports. Merchant-processor settlement reports (Stripe, Square, Shopify, PayPal). Prior tax returns. Any existing accounting file, however messy.
2. Rebuild the ledger month by month
Import transactions, code them against a consistent chart of accounts, and — critically — reconcile each account to its statement for each month. Reconciliation is what separates a real catch-up from “we categorised the bank feed.” It catches duplicates, missing transactions, and bank errors.
3. Fix the balance sheet
This is where DIY catch-ups usually go wrong. Loans need principal and interest split. Fixed assets need to be capitalised and depreciated. Payroll liabilities, sales tax payable, and owner contributions/draws need to be real, not plugs. Un-deposited funds and old uncleared items get cleared out.
4. Reconcile to the tax returns
Your prior-year ending balances should tie to what was filed. Where they do not, document why — your CPA will need that.
5. Write it down
A short memo: what periods were rebuilt, what assumptions were made, what adjusting entries were posted and why. This is the difference between a catch-up you can defend and one you just hope no one asks about.
Realistic timeline: a single year of a small business with a few accounts is usually 2–4 weeks once the documents are in hand. Multi-year or high-volume work takes longer. The gating factor is almost always how fast the source documents arrive.
What catch-up costs
Catch-up is billed the same way as everything else we do — $35.00 an hour, one rate for every service, so you pay for the hours the work actually takes. No minimum, no retainer, nothing recurring. How many hours it takes depends on how many periods we rebuild, the transaction volume, and the number of accounts, so we estimate the hours up front, in writing, before any work starts, against a firm delivery date. It should always roll straight into Monthly Bookkeeping so the gap does not reopen.
How we do it
We scope the gap from a document checklist, give you an estimate of the hours in writing and one delivery date, rebuild and reconcile every period, hand you the memo, and start your first monthly close. Clients preparing for a deadline get a weekly progress update so there are no surprises. See Accounting & Financial Statements.
Being behind is not the problem. Staying behind is. It is a two-to-four-week fix, not a reckoning.
General information from our accounting team, not individualised accounting, tax, or legal advice. Rules and thresholds change; confirm specifics with your CPA or EA.