Behind on Your Books in Garland? How to Catch Up Before Year End

Why year end is the deadline that matters

Most owners who fall behind on the books do not notice until someone asks for a number. For a small business in Garland, that someone is usually the CPA or tax preparer in January, asking for a profit and loss statement and a balance sheet that tie to the bank. Year end is when a lot of owners go looking for a bookkeeper, so that the books are ready for their tax professional when the season starts. Tru-Ledger Bookkeeping in Garland takes on exactly that kind of catch-up work.

Catching up is a sequence rather than a mystery. Done in the right order, months of neglected books in QuickBooks can be brought current with each month worked through once. Done in the wrong order, the same transactions get fixed twice, and the reports still do not tie out at the end.

Find each account's last completed reconciliation

Before you touch a single transaction, look up the last month each bank and card account was actually reconciled in QuickBooks, and check that the reconciliation still holds. That month is your solid ground for that account. Everything after it needs work, and everything before it can usually be left alone.

Do not treat a month as solid just because the book balance and the bank balance happen to agree. A check you wrote that has not cleared, or a deposit still in transit, makes honest books differ from the statement, and two mistakes can cancel out and make wrong books look right. A completed reconciliation is what proves the month.

Then work out which situation you are in, because it changes where the first hour goes.

The order of work inside each month

Whether the business is a retail shop in Garland or a construction company running jobs across Dallas County, each month gets the same treatment, one month at a time, oldest first. If you would rather hand it off, catch-up and cleanup bookkeeping is a service on its own, with no monthly plan required.

1. Download every bank and credit card statement for the months that are behind and keep them in one folder.
2. Enter or match every transaction on the statement for the month, including any the bank feed missed.
3. Delete duplicate transactions the bank feed added and code every uncategorized line to the right account.
4. Match deposits to customer invoices so accounts receivable shows only what customers still owe.
5. Match payments to vendor bills so accounts payable shows only what you still owe.
6. Reconcile the month to its statement, and list any outstanding checks or deposits that explain a difference.
7. Move to the next month, and when the year is done run a profit and loss statement and a balance sheet and read them for anything that looks wrong.

Reconciling last is what makes the reconciliation mean something, because it checks finished work instead of a half-entered month. It still is not the whole job. A loan payment coded entirely as an expense reconciles perfectly, yet it overstates your costs and leaves the loan balance wrong, so the coding matters as much as the matching.

Clean up the file you have, or start over?

Owners who are far behind often ask whether a new QuickBooks file would be easier. Usually it is not, because the old months still have to be right for the tax return, and a new file does not make them disappear. There is a clear walk-through of cleaning up an old QuickBooks file versus starting a new one that sorts old files into four common states. Its short answer is to fix an old file forward from the month the bank account last matched the books, start fresh only when nobody can name that month or the business itself changed, for example by incorporating, and keep the old file either way. Here, that fix-forward month is each account's last completed reconciliation.

What your CPA needs from the catch-up

A catch-up is finished when the books can go to your CPA or tax professional without a list of questions coming back. The return itself is their job. Your part is books that tie out: every account reconciled through December 31, receivables and payables that reflect reality, and transactions coded where they belong.

It also helps to send a short note with the reports covering loans taken out or paid off during the year, equipment you bought, owner draws and contributions, and any contractors you paid. Those items are easy to lose track of in a busy year, and having them written down saves a round of emails in February.

Doing it yourself or handing it off

Plenty of owners in Garland and Dallas keep their own books and simply fell behind during a busy stretch. If that is you, a catch-up does not have to turn into a monthly contract. Tru-Ledger can get the books current and reconciled, then hand them back so you can keep managing them yourself. If you would rather not go back to doing the books at night, the same clean file becomes the starting point for monthly bookkeeping.

Either way, the work happens in QuickBooks Online. Steve Martinez is an Advanced QuickBooks ProAdvisor, certified in QuickBooks Online (Level 2) and listed in Intuit's Find a ProAdvisor directory.