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bookkeeping and accounting team

Fallen Behind on Bookkeeping? Here’s How to Catch Up

bookkeeping and accounting team

Tax season can be stressful, especially if your books are behind, inaccurate, or both. We estimate that roughly 25% of small businesses seek information on how to catch up on business taxes and get their financial records in order.

The benefits of clean, accurate books extend far beyond tax season. When your books are up to date, your business will be better equipped to make strategic financial decisions, analyze expenses, and manage cash flow.

Conversely, when you get behind in your books, it doesn’t just make it harder to prepare and file taxes. Outdated or inaccurate books can limit your ability to cover your expenses, pay your employees, or secure a small business loan.

You’re probably reading this because you already know you’re a little behind on books. The biggest decision to make is whether to try to get your books caught up on your own or secure the assistance of a catch-up bookkeeping service. We’ll help you decide by covering the pros and cons of both approaches in this article.

The Pros of DIY Catch Up Bookkeeping

When you’re considering how to catch up on business taxes, you might decide to handle your own books. That’s not a bad strategy, really, since DIY-bookkeeping offers the following advantages:

Costs Less

Let’s face it: today’s business owners need to cut corners any way they can. Rather than hire an in-house bookkeeper or outsource your bookkeeping needs to an accounting firm, you can simply catch up on your books yourself. 

If you’ve already got some experience in filing taxes and managing your accounting needs, this can be an area where you can minimize expenses. For a full overview of the costs of catch up bookkeeping, check out this post here

Intimate Knowledge of Your Business

No one knows your business better than you do. When you handle your own books, you’ll have an intimate knowledge of your income and expenses and will be in a better position to make updates and correct errors as you proceed. 

This consideration might be especially true if you’ve collected a lot of receipts and paperwork on your own. Having these documents on hand can make it easier to record income and business expenses as they happen, and by handling your own bookkeeping, you’ll be better able to identify expenses.

Privacy

As a business owner, you might be reluctant to hand over your sensitive financial data to a third party. By handling your own books, you eliminate all possible breaches in your data security, and you keep your business information limited to your eyes only.

The Cons of DIY Catch-Up Bookkeeping

There’s a reason that so many small businesses outsource their needs to a catch-up bookkeeping service. While there are many business tasks that you can handle on your own, bookkeeping isn’t always one of them and there are so many benefits to catch up bookkeeping. 

Business owners often discover that the bookkeeping process can be:

Time-Consuming

Stop and think about this for a minute. How did your books get so behind in the first place? For a lot of entrepreneurs, it comes down to a lack of time. But if you didn’t have time to maintain your books, how likely are you to find time to catch up on your books?

This contemplation actually brings us back to the question of money. Sure, handling your own books will cut down on your administrative expenses, but at what cost? Your efforts are better spent on the revenue-generating activities of your business, not the administrative details of your back office.

Confusing

It can be a challenge to get books caught up in time for tax season. Accounting terms and software tools aren’t always easy to navigate, especially without some degree of specialized training. And that’s to say nothing of the jumble that can occur when you get behind in your books.

This confusion is why it’s best to rely on an accounting professional who knows how to catch up on business taxes. They can sort through the mess on your behalf and bring clarity to your books, so you don’t have to sweat the process when it comes time to pay your taxes.

Inaccurate

The more tasks you’re juggling, the easier it is to make mistakes. But errors in your books can cost you, especially when it comes to tax preparation. Reporting errors can change the actual amount of taxes you owe, and if you underreport, you could be subject to penalties.

Having access to a team of financial professionals can ensure that your books are fully up-to-date, as well as free from any inaccuracies that can cause problems for your business. Plus, a financial professional may be able to help you maximize your deductions, saving you money and enhancing your profitability.

Get Started Now

If we’re honest, most of us make a plan to get started “tomorrow.” But by the next day, we put it off once again.

The best time to get started is now. With tax season looming on the horizon, you can’t afford to wait for another “tomorrow.” In fact, the more you put it off, the more your overdue books can snowball into an even messier problem.

This time crunch means that whether you plan on catching up on your own books or relying on a professional service to provide catch-up bookkeeping for small business, you’ll want to get a plan in place so you’ll be prepared for tax season.

How to Catch Up on Business Taxes Faster Than Ever

The expert team at Xendoo has already provided catch-up bookkeeping for small business owners across the country. We can bring your books up-to-date so that you’ll be prepared for tax season and put you on the road to greater financial control.

How much does catch-up bookkeeping cost? Your final price depends on how far behind you are, but Xendoo can provide catch-up services starting as low as $195. The real value is found in the peace of mind you get, knowing your financial records are handled by a trained professional.

Find out for yourself by signing up for a free trial, and see what Xendoo can do for your business.

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The Top 5 Benefits of Catch Up Bookkeeping

Whether they coach chess players or sell organic puppy food online, every small business owner shares a common driving force: a passion for growing their business. Increasing sales and gaining new customers is one part of the equation. Consistent bookkeeping provides the financial insight needed to strategize for long-term success. With so many obligations resting on the business owner’s shoulders, it can feel like there are not enough hours in the day to accomplish every task, and eventually the books may fall behind. 

Even if the books are only behind a few weeks, up-to-date records are crucial for the financial well-being of every business. Catch up bookkeeping accelerates business growth by increasing financial visibility, which enables business owners to make decisions based on accurate information and remain tax-compliant throughout the year! In this blog post, we are exploring the top 5 benefits of catch up bookkeeping!   

Reliability in Your Opening Balance

The Opening Balance is the amount of money in your bank account at the beginning of a new financial period, such as the start of the month. Be aware that your bank account does not necessarily reflect the exact amount of cash that is available to spend. For example, if your Opening Balance states that you have $50,000, but $20,000 worth of checks have not cleared yet, the actual balance is $30,000. The best practice is to consult your updated accounting software or financial statements, which provide insight into your true financial position.

The financial statements report revenue, expenses, and profitability, all of which contribute to the Opening Balance. They also guide decision-making and reveal opportunities for business growth. The more up-to-date your books are, the more reliable your financial statements (and Opening Balance) will be! 

If your bookkeeping is behind, there will be little to no financial data for that time period, which means you will not know your true Opening Balance for today. For example, if your account was reconciled in January, but February was skipped, the Opening Balance would be incorrect for March. This could skew your numbers going forward, and costly choices could be made based on inaccurate data. This could also affect future bank account reconciliation, as well as the balances in your revenue, costs, and expenses. It is a vicious cycle.

Catch up bookkeeping corrects these issues and provides clarity and accuracy in your financials. Once your books are caught up, keeping them up-to-date becomes second nature.

Financial Accuracy Through Bank Account Reconciliation   

A bank account reconciliation is performed to confirm that your accounting records match the information in your bank account. It is an opportunity to identify and correct any bookkeeping errors before the financial statements are finalized, as well as detect and prevent fraudulent activity in your bank account. Bank account reconciliation also ensures that you are accurately reporting your income to the IRS. The best practice is to reconcile your bank account once a month. 

Proper bank account reconciliation can only be accomplished when the books are up-to-date. By getting your books caught up, you can ensure the reliability and accuracy of your financials each month. 

 

Cash Flow Management

Catch up bookkeeping can have a significant impact on cash flow. When your books are caught up, you can pinpoint how and when cash enters and leaves your business each month. This delivers a deeper understanding of your cash needs, so you can create a plan for cash flow management. 

For example, as your books are caught up, you may uncover past due invoices, or find that you are sending out vendor payments before you receive the cash needed to cover them. 

With this insight, you can monitor your Accounts Receivable to ensure you are paid in a timely manner going forward, and find solutions for the timing of your own payments. You can also forecast future cash needs to be confident you have what you need for continued operations.   

Click here to learn more about cash flow.  

Insight into Net Income

Keeping your books up-to-date plays a vital role in calculating your bottom line, or Net Income, which is the profit that remains after all costs and expenses are subtracted from revenue. In order to know your true Net Income, all business expenses must be accounted for through accurate and timely bookkeeping. This understanding of your Net Income provides the opportunity to increase your bottom line. 

Getting your books caught up is also essential when applying for loans. Creditors and investors examine Net Income when deciding to invest in a business, as it highlights the business’s ability to pay back loans efficiently. Catch up bookkeeping determines your bottom line, so you can understand and increase the profitability of your business, meet loan requirements, and secure funding for your next venture!     

Click here to learn more about Net Income.   

Tax Compliance

As tax season draws closer, a concern that many business owners have is under or over reporting their earnings, and missing out on deductions. They may also experience a back and forth with their Tax CPA over missing documents and gaps in their financials. Breathe a sigh of relief – catch up bookkeeping takes the headache out of tax season!

By getting (and keeping) your books caught up, you can identify the deductions you qualify for, maximize your tax return, and stay compliant all year long! 

Get Your Books Caught Up with Xendoo

Behind on your bookkeeping? You are not alone! 25% of business owners are behind on their books. Get a fresh start with catch up bookkeeping services from Xendoo, so you can take your time back and focus on the future of your business. 

Let’s chat! We would love to get to know you and your business. Click here to schedule a free consultation.

A man and a sketch out a project for their LLC business

How Much Does Catch Up Bookkeeping Cost?

A man and a sketch out a project for their LLC business

When you get behind in your books, you might find yourself sweating a bit. In addition to being worried about how you’ll get caught up, you may also be concerned about the catch-up bookkeeping price you’ll have to spend to bring your financial data up-to-date.

Most business owners find that catch-up bookkeeping services are well worth the price. But before we cover the actual cost of a catch-up bookkeeping service, let’s explore the reasons why businesses should consider relying on an accounting firm to ensure that their books are clean and accurate.

Why Catch-Up Bookkeeping Is So Important 

What is catch-up bookkeeping? As the name might suggest, catch-up bookkeeping is the practice of bringing your company’s financial records up-to-date, ensuring that all income and expenses are recorded so that you can have an accurate picture of your company’s financial health.

Why is this so important? When your books are clean and current, your business will benefit in the following ways:

Simpler Tax Preparation

Your business taxes depend on your income. Having accurate books ensures that you’ll be able to accurately report your income for the preceding tax year. 

If you get books caught up before you file your taxes, the tax preparation process will be simple and straightforward. Plus, you’ll be in a better position to receive tax deductions based on business expenses from the past year.

Conversely, your outdated books can lead to errors, which can lead to major expenses down the line. For example, if you underreport your income, you’ll have to complete additional paperwork to make the correction. It’s possible you’ll face an additional penalty.

Further Access to Business Loans

Small business loans can be used to grow your business, expand your inventory, or cover marketing expenses. But before you can be approved, your lender will likely ask for your current financial statements. Your company’s financial health will determine the kind of loan you receive and how much you qualify for.

If you’re behind on books, you won’t be able to properly communicate your existing assets, which could jeopardize your eligibility for a business loan. Failure to keep up on your finances could limit you to a smaller loan or a worse interest rate.

Better Strategic Focus

Every entrepreneur should regularly review their financial performance to find ways to hone their strategies. Accurate financial records can highlight areas in which you need to cut expenses, while also illustrating patterns in spending. With this information in hand, you can better plan for the future. 

In other words, it’s essential to have accurate books when you want to refine your company’s strategies. Your financial performance can be used to set long-term and short-term goals, indicating when you’ve reached these benchmarks.

A banner advertising Xendoo's catch up bookkeeping services. A young, male accountant smiles, with buttons for Tax-Ready Financials, Peace of Mind, and Quick Turnaround appearing next to him.

Healthier Cash Flow

When you have an accurate record of your company’s income and expenses, you’ll better understand the capital you have to work with. That way, you can manage your cash flow, directing funds toward particular projects or expenses that are likely to bring a high return.

When your books are outdated, you’ll be in the dark when it comes to your working capital. Not only does this hamstring your ability to make future decisions, but it can also prevent you from covering your expenses or paying your employees on time.

Catch-up bookkeeping can get you back on track while giving you a working knowledge of your available assets.

Greater Peace of Mind

Finally, there’s simply not enough to be said for the peace of mind that comes from having your financial data handled by a team of professionals. While it could be tempting to try to take the time to catch up on your books by yourself, even the most skilled entrepreneurs can struggle with the terminology and intricacies of accounting software platforms.

By partnering with an accounting firm, you’ll gain confidence in your business, knowing your books are checked and maintained by trained professionals. With this weight off your shoulders, you can put your focus where it belongs — managing your business.

The Cost of Catch-Up Bookkeeping 

No matter how behind you are in your books, you can rely on a catch-up bookkeeping service to help you get up to speed. But at what cost? Let’s compare the catch-up bookkeeping price to the value you receive from these services.

Catch-Up Bookkeeping Price

How much does catch-up bookkeeping cost? Costs can vary a bit, based on the company you choose to use, as well as how far behind you are in your books. 

The cost can also be impacted by how well you’ve organized your financial records and receipts beforehand. For example, it can take time to reconcile your bank accounts, which can drive the cost of these services higher.

At Xendoo, we proudly offer catch-up bookkeeping for small businesses starting at $195. Prices can increase depending on the needs of your business, but you’ll have access to our reliable team, who will work hard to make sure your books are clean and accurate.

Catch-Up Bookkeeping Value

By now, you’ve probably come to recognize that the small business bookkeeping price is well worth the return on your investment. While it’s possible to update your books yourself, most entrepreneurs lack the time and patience to address several weeks’ worth of outdated entries. 

Besides, your focus belongs on the activities that can expand your business, not on all of the administrative details!

The cost of catch-up bookkeeping for small businesses is therefore a relatively small price to pay, as it can let you focus on setting goals for the future while a financial team sorts out your past.

Do More, Worry Less

At Xendoo, we believe that entrepreneurs should spend their time dreaming about the future, not losing sleep over outdated books.

Rather than trying to fix the problem on your own, consider contacting our team of financial experts. We can provide you and your business with superior service, ensuring that your books are clean, up-to-date, and accurate.

When you sign up today, you’ll get 30 days to explore our extensive array of services. Reach out today to learn how outsourcing your company’s accounting needs can reduce your stress and grow your business. 

Business woman working on lapto

What Is Catch-Up Bookkeeping?

Xendoo provides online bookkeeping, accounting, and tax support for your partnership business.

When you get behind in your books, you have two choices: lose sleep or turn to a catch-up bookkeeping service to help you out. 

What is catch-up bookkeeping? Catch-up or “clean-up” bookkeeping is the method of bringing your financial records up to date.

In other words, catch-up bookkeeping lets you spend less time worrying about the past and more time focused on the future. Let’s take a quick look at what you can expect from a catch-up bookkeeping service.

How Catch-Up Bookkeeping Is Different from Ongoing Bookkeeping

Most business owners already have some sort of bookkeeping strategy in place, which might involve recording income and expenses as well as saving receipts and documenting expenses in preparation for tax season. These ongoing bookkeeping strategies are intended to keep pace with the normal flow of business.

How is this different from catch-up bookkeeping? Catch-up bookkeeping operates as an emergency solution when you get behind in your ongoing bookkeeping efforts. Catch-up bookkeeping attempts to look back through the past several months, record income and expenses, and bring your books completely up-to-date.

Catch-up bookkeeping services can also provide some strategies to keep you from getting behind on your books in the future.

The Core Steps of Catch-Up Bookkeeping

Some business owners try to get books caught up on their own. But if you got behind in your books because you lacked the time to do your accounting properly in the first place, how will you find the time to get caught up?

Instead, it might be a good idea to rely on an experienced CPA or tax professional to review your books. These financial professionals can then help you to do the following:

Gather Your Receipts and Documents

First, you want to gather as many of your business receipts as possible. This will help you to better determine your income and expenses. 

Other documents to gather include:

  • Customer invoices
  • Debt collections
  • Business expenses
  • Vendor payments

With this approach, you’re trying to do two things. First, you’re attempting to find paperwork to document your business transactions. But secondly, you will determine whether there are any outstanding debts that you owe to your vendors and any outstanding invoices that your customers have yet to pay.

This will be particularly important when tax time rolls around, as these receipts can help you to determine your earnings for the year and write off any business expenses or bad debt that you incurred.

Reconcile Your Bank Accounts

Next, your accountant can help you to reconcile your bank accounts. What does this mean? During the reconciliation process, your financial professional will compare each transaction in your accounting records with the same transaction on your bank statements.

Ideally, the two numbers should match, but if they don’t, you’ll need to address any errors to ensure that your financial records are accurate.

If this process sounds time-consuming, that’s because it is! In many cases, this is the step that adds time to the catch-up process, since your accountant will have to spend a while sifting through your financial data. 

Separate Personal and Business Expenses

It’s critical that you keep your personal and business expenses separate. Not only can mixing them create confusion, but you could find yourself personally liable if something should go wrong in your accounting.

At the very least, you should have a business bank account and use this account for any transactions that involve your company. Some companies prefer to open multiple accounts to organize department budgets or to use one account for income and another for vendor payments, for example.

Separating these expenses will make it easier for you and your accounting team to manage your books and to be fully prepared for tax time. Keeping your personal expenses separate will also make it simpler to file your personal tax return.

Collect W-9s, 1099s, and W-2s

Do you have employees? Have you hired any independent contractors during the tax year? If so, you’ll need to distribute the appropriate tax documents before the end of the year.

If your business has employees, you’ll need to file Form W-2. If you paid an independent contractor more than $600 over the course of a year, you’ll need to use two documents. You’ll give a W-9 form to each contractor. They’ll complete their tax information and return it to you. You’ll then use this data to file Form 1099-MISC with the IRS.

Enjoy the Benefits of Accurate Financial Data

This process can take some time, but once it’s complete, you’ll be caught up with your books. You can breathe a sigh of relief and look forward to the benefits of accurate data, along with a more complete understanding of your company’s cash flow.

While we’ve highlighted the importance of getting caught up before tax season, there’s never a bad time to catch up on your books. Staying up-to-date throughout the year can even help you to plan ahead so that you can reduce the stress that often comes with tax season.

 

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How Much Does Catch-Up Bookkeeping Cost?

Understandably, many business owners find themselves wondering: “What is catch-up bookkeeping going to cost my business?”

The answer to this question depends on how far behind you are in your books. The longer it takes to reconcile your accounts and bring your records up-to-date, the more you can expect to pay for catch-up services.

Xendoo offers catch-up bookkeeping for small businesses starting at $195. This catch-up bookkeeping cost is negligible compared to the peace of mind you’ll have knowing your financial records are current and accurate. 

Get Caught Up with the Experts at Xendoo

You’ll rest easier knowing that your books are being handled by a financial professional. That’s why Xendoo offers expert-level catch-up bookkeeping services for small business owners. We’ll help you to get caught up and give you the tools to remain current on your books in the future.

To learn more about catch-up bookkeeping and other financial services, contact us today or sign up for our free trial.