Catch up bookkeeping, also called bookkeeping clean up, is the process of bringing an organization’s financial records up to date. The method may include reconciling bank statements, entering unrecorded transactions, and adjusting entries to correct errors. Catch-up bookkeeping aims to ensure that financial statements accurately reflect the organization’s financial position and performance. An internal bookkeeper, an external bookkeeping service, or an accountant can do this task.
Benefits of Catch up Bookkeeping
Catch-up bookkeeping is an important process that helps organizations to maintain accurate and up-to-date financial records. An organization may need to do bookkeeping cleanup when they need to catch up on their accounting. Following are the reasons to get it done as soon as possible:
- Financial Statements: Financial statements such as balance sheets and income statements are the basis of any business, and they are used to make critical financial decisions. Accurate financial statements are only possible if all transactions are appropriately recorded, reconciled, and classified.
- Compliance: Catch-up bookkeeping helps organizations comply with accounting and tax regulations by ensuring that all financial records are accurate and up-to-date. This helps to avoid penalties for late filing or non-compliance with tax codes.
- Budgeting and forecasting: Accurate financial records are essential for budgeting and forecasting. Catch-up bookkeeping helps organizations to have an accurate picture of their financial position and performance, which enables them to make informed decisions about future investments and expenditures.
- Auditing: Accurate financial records are essential for the auditing process. Catch-up bookkeeping ensures that all financial records are accurate and up-to-date, which makes the auditing process smoother and more efficient.
- Improved decision-making: Catch-up bookkeeping helps to improve the overall integrity of the organization’s financial records, making them more reliable for decision-making.
- Avoiding errors: Catch-up bookkeeping helps to identify and correct errors in financial records, which improves the accuracy and reliability of financial statements.
How to Do Catch up Bookkeeping?
There are some steps to follow to do bookkeeping cleanup.
1. Gather all financial records
The first step in catch-up bookkeeping is to gather all of the organization’s financial records, including bank statements, invoices, receipts, and any other documents related to financial transactions.
2. Review and reconcile bank statements
Review all bank statements and reconcile them with the organization’s internal financial records to make sure all transactions are accounted for and the balances match.
3. Enter missing transactions
Enter any transactions that have not been recorded in the organization’s financial records. This may include sales, expenses, and other financial transactions.
4. Make adjusting entries and finish catch up bookkeeping
Review the financial records for errors or discrepancies and make any necessary adjusting entries to correct them.
5. Prepare financial statements
Prepare the organization’s financial statements, such as the balance sheet and income statement, to reflect the updated financial records.
Bookkeeping Companies That Provide Bookkeeping Clean up
Many bookkeeping companies offer catch-up bookkeeping services. Some of the most popular are the following online bookkeeping services:
NumberSquad is an all-in-one small business accounting firm that offers special deals on catch up bookkeeping for small businesses that need to catch up on their financial records. The company also offers ongoing bookkeeping services, nonprofit bookkeeping, tax filing, and payroll processing services for small businesses, nonprofits, and self employed. NumberSquad provides free resources for small businesses such as free personal financial statements and free incorporate services.
Bench is an online bookkeeping service that provides catch-up bookkeeping and other services for small businesses and entrepreneurs.
Pilot is a full-service outsourced accounting company providing catch-up, ongoing bookkeeping, and accounting services for growing tech start-ups.
Bookkeeping Services is a bookkeeping company specializing in bookkeeping, accounting, and tax preparation for small businesses and self employed.
AccuBooks is an accounting, payroll, and income tax service in Harrison for individuals and businesses.
Catch up Bookkeeping Price
The cost of catch-up bookkeeping depends on the number of transactions, the number of months that need to be reconciled, and the number of financial statements that need to be prepared.
Accountants may charge an hourly rate for their catch-up bookkeeping services. The hourly fee is usually between $50 and $200 per hour. Usually, experienced accounts charge higher fees.
Bookkeeping companies offer monthly catch up package pricing deals per month. Package deals usually depend on the number of business transactions or the total amount of monthly expenses. Some bookkeeping services use different metrics. For example, NumberSquad offers an affordable and one-time deal for new customers. New small business clients get 50% off the regular pricing since the project can generate a lump sum of revenue and it attracts new clients. Regular monthly bookkeeping pricing for small businesses with annual sales of $500,000 or less is $145 per month. So, when a new client in this category signs up for small business bookkeeping service or nonprofit bookkeeping, they pay only $72.5 per month for catch up bookkeeping. The annual cost for such a service will be only $870 if the company’s annual revenue is $500,000 or less.
The cost of catch-up bookkeeping is not only in terms of money but also in terms of time and resources that the organization will need to invest.
Other Factors to Consider before Outsourcing Catch up Bookkeeping
When choosing a bookkeeping service, there are several key factors to pay attention to:
Experience and Qualifications
Look for a bookkeeping service that has experience and qualifications in working with organizations similar to yours. Make some research about what does a bookkeeper do and what is the company’s specialty.
Search for a bookkeeping company that uses specialized software and tools to manage financial records, as this can help to streamline the bookkeeping process and make it more efficient.
Make sure that the bookkeeping service has adequate security measures in place to protect your financial records from unauthorized access.
Communication & Responsivness
Find an accounting firm that is responsive and easy to communicate with, and ensure that you will be able to reach them when needed.
Reputation and Customer Reviews
Look for a bookkeeping service with a good reputation and good online reviews for bookkeeping solutions, and check for references from other clients if necessary.
Make sure to understand the payment terms of the bookkeeping service and make sure that they align with your organization’s budget and cash flow.
Catch up Bookkeeping is Best for the Following Type of Organizations
- Small Businesses: These are typically defined as companies with fewer than 500 employees, and they may include sole proprietorships, partnerships, and corporations.
- Microbusinesses: These are smaller than small businesses and are typically defined as companies with fewer than 10 employees.
- Nonprofit organizations: These organizations are formed for charitable, educational, or religious purposes, and they are not operated for the benefit of any individual or group.
- Sole proprietorships: These are businesses that are owned and operated by one person, and they do not have any partners.
- Partnerships: These are businesses that are owned and operated by two or more people, and they may include general partnerships, limited partnerships, and limited liability partnerships.
- Limited Liability Companies (LLCs): These businesses combine the features of corporations and partnerships and offer personal liability protection for the owners.
- S-Corporations: These corporations have chosen to be taxed under Subchapter S of the Internal Revenue Code.
- Non-Government Organizations (NGOs): Individuals establish these organizations independently from the government to serve specific social or cultural causes.