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Catch-up bookkeeping – what is it?
The term “catch-up bookkeeping” refers to the action of bringing your financial records up to date. The analysis of bank statements and the reconciliation of accounts receivable are both parts of this essential component of bookkeeping.
After a long lapse in accounting, you’ll need more than simply a “catch-up” session to get back on track. A catch-up accounting service is a better option for ensuring you have up-to-date data whenever you need to perform tasks like account reconciliation or data migration. For the sake of getting your new bookkeeper off to a good start, it’s a good idea to complete some catch-up bookkeeping if there was even a little lapse between bookkeepers.
When does your company require catch-up bookkeeping?
There are several opportunities for you to get caught up on your reading. Some are for your good, while others concern potentially severe fines from the authorities. You must keep precise financial records for your company by Australian and New Zealand law. You must also keep records of your tax and retirement account contributions and withdrawals. Any claims made on your tax return should be able to be backed up by your company.
Beyond just getting your books for tax time, there are a few other common scenarios in which you should perform catch-up bookkeeping.
When it’s time to add new accounts.
Do you have missing data? You may be overlooking months of business transactions if you haven’t yet integrated a new business credit card into your accounting software. When you don’t know your income and expenses, you can’t create reliable financial reports.
When there are unreconciled transactions.
All of your business’s financial transactions, whether they span a full month or just a few days, should be recorded in a general ledger. If some of your transaction records are missing, it could completely alter your financial picture. After bringing the records up to date, the ledger can once again be used.
When changing software.
Switching to Xero or another accounting app? Properly labeling your data requires some back-end bookkeeping to ensure you’re entering the most up-to-date and correct numbers possible. Updating everything in your current software is considerably simpler than fixing it in the new software and figuring out what went wrong in six months.
When you have to write up reports.
Playing catch-up on missing data is vital if you want to demonstrate the financial status of your company to stakeholders or apply for more funding. A report will always be inaccurate if it is based on old data. If you use insufficient data in your reports, you may lose out on a potential investment.
When you are not paid correctly.
There is a risk of closure if your company does not get timely and accurate payments. There’s no time to waste if you know or think that your consumers owe you money. It’s possible that if you’re not careful with your records and taxes, you may be losing out on funds that could be used to hire more employees or expand your firm.
What happens after I catch up on my books?
You can finally set sail once you’ve made sure you’re all caught up on your paperwork, right? You shouldn’t jump to conclusions. Financial record-keeping is never a “set and forget” operation. The truth is that it continues indefinitely. For this reason, retaining the services of a reliable bookkeeping firm is fundamental to the continued success of any business.