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    How to Catch Up On Your Bookkeeping

    [fa icon="clock-o"] May 23, 2018 8:51:00 AM [fa icon="user"] Ben Szweda

    catch up on bookkeeping with help from the experts at BudgetEaseA common first task for many of the new clients that engage BudgetEase is catching up their QuickBooks file to date. Often times it has been years since a reconciliation has been done, principle and interest have been lumped together for just as long or the bank feeds have not been cleared of transactions. When tackling such a project, organization and the setting of expectations is important. Whether you are an accountant beginning to catch up a file or a business owner that has an outdated QuickBooks file, it pays to have an understanding of what the catch-up journey might look like.

    Organizing the Project

    An important first step is to make a list of everything that needs to be done and the corresponding documents needed to complete the work. We use a Quick Audit form to make sure we have a complete list of what needs to be done. Giving the client one list of requests up front is less overwhelming than sending multiple requests throughout the project.

    From the start, having all documents for all accounts needed to be brought up to date is also useful as it is better to reconcile all accounts for one month than one account for all months. This helps transfers between accounts and payments of credit cards and loans to be applied correctly.

    Prioritize the list so that you are most efficient.  The bank reconciliations are important. If there are undeposited funds, you need to determine if they should be cleared before or after the bank reconciliations.  

    Catching Up Bank Reconciliations

    In the best-case scenario, the ending balance of the last reconciliation matches the bank statement and a bank feed has been downloading transaction data to QuickBooks even though no reconciliations were being done. If either of these assumptions are not true, they must first be fixed. The reconciliation discrepancy must be investigated, and the deleted transaction(s) replaced.

    If the bank feed was not turned on, a CSV or QuickBooks Online file of the data must be obtained from the bank website. Then a reconciliation by year can be done to bring the account current. In the current year, reconciliations can be done by month, and then any unused older transactions in the bank feed can be excluded. 

    Catching Up Loan Accounts

    While it is nice to see principle and interest broken out each month, when dealing with closed prior periods, one journal entry per year dated the last day of that year is a more cost-effective way to bring the balance up to date. In the current year, entries can be made by quarter or month. This approach also works for breaking out payroll taxes from gross wages.

    Other Considerations

    Bank reconciliations are probably at the top of the client’s mind, but there are other areas in QuickBooks to review and bring up to date. Ensure undeposited funds are at zero or can be explained. Uncleared items could be duplicates. It is best to check at the end of each period that you reconciled that the uncleared items are valid and address at that time.  

    Once the reconciliations are done, checking to ensure the Open Invoices and Unpaid Bills reports are accurate is a good next step. Review the Balance Sheet so there are no unexplained negative assets or liabilities.  

    Keep in mind there are some tricks to make catch-up work more efficient. Give us a call if you’re wondering how to clean up QuickBooks or if you just need a couple tips.

    semi-annual quickbooks review checklist

    Ben Szweda

    Written by Ben Szweda

    I am a QuickBooks Online certified accounting professional, with bachelor's degrees in psychology and accounting, and am currently working on earning a CPA. I have experience working with both the not-for-profit and service business sectors. My services include account reconciliations as well as payroll and accounts receivable management. I take a results-oriented approach with my clients by leveraging accounting data to enhance business efficiency and profitability. My goals are to streamline accounting procedures, develop internal controls and make financial reporting meaningful to management.

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