Tax Hardship Center: Importance of Accurate Catch-Up Bookkeeping

First, collect all of the receipts and invoices related to your business expenditure. Don’t worry if things get a bit messy—catch-up bookkeeping helps you untangle the mess before it’s too late. These reports are insights into your business; where it has been and is headed. For example, your P&L might reveal that your Partnership Accounting vendor expenses have spiked in Q3, prompting you to ask why and reconsider.

Step 6: Prepare for Tax Filing

Yet many of them still take on the challenge of handling their books, resulting in costly errors. Meanwhile, the ones who have accounting knowledge still struggle as 70% don’t have an accountant. As a small business owner, you’re likely wearing many hats—juggling everything from product sourcing to inventory management, front-end work, human resources, marketing, and more.

Clear Your Bookkeeping Backlog & Get Back on Track

• Bad debts can be claimed by using either the specific charge-off method or the non-accrual experience method.
• Collect the receipts from every business purchases you have made during the tax year.
• Under an accrual basis, if a customer doesn’t pay you for work completed, you can write this off as a bad debt expense.
• Once the monthly budget has been addressed and savings found, knowing where to put the additional funds is the next step.
• Many bookkeeping software tools offer auto-categorization features based on past activity.

You need to streamline collecting W-9s, issuing 1099s, and reporting W-2s to meet Internal Revenue Service (IRS) requirements. Tax season is around the corner, you get bogged down to catch up on bookkeeping. Once you’ve gathered all of these, arrange them in a chronological order and move to step two.

• Whether you’re just a few months or even years behind on your books the reality is it’s costing you a lot of money and probably some needed stress.
• These reports are insights into your business; where it has been and is headed.
• The catch up approach in accounting involves updating overdue records, while the clean-up approach involves organizing and correcting existing records.
• According to a survey by the National Small Business Association, 40% of small businesses report that reconciling accounts helps them prevent and detect fraud.
• Clearing your bookkeeping backlog goes beyond just managing tedious tasks—it strengthens your business’s financial health and decision-making.

How to leverage AI for a successful tax season

But that doesn’t mean you’re out of luck if you are a bit late to get started. Your disorganized books might be the reason you’re struggling to secure a business loan. Lenders require accurate and up-to-date financials, and a clean-up of your bookkeeping can make all the income summary difference.

• The paperwork you utilize will vary depending on the professionals you’re paying and their job status.
• Start reconciling all of your business bank accounts from the period you have fallen behind.
• For example, if you’ve missed six months of bookkeeping, you’ll need to download your bank and credit card statements for those months.
• Get free guides, articles, tools and calculators to help you navigate the financial side of your business with ease.
• This helps transfers between accounts and payments of credit cards and loans to be applied correctly.

Investing in bookkeeping catch-up services can improve your chances of getting the funding you need to get your business to the next level. Yes, deductions include expenses for home offices, phone or car usage for business, and more. According to the IRS, 85% of small businesses use an accountant or tax preparer to file taxes, underlining the importance of accurate year-end bookkeeping. For businesses with inventory or physical assets, a year-end inventory count and asset valuation are necessary.

Trust the Professionals at the Harding Group

These platforms streamline document management and catch up accounting client communication, making it easier to collaborate and share information. With cloud storage, all your files are easily accessible from anywhere, and you can ensure that everyone on your team is working with the latest versions. This not only saves time but also reduces the risk of errors and miscommunications, which can be costly. One of the most impactful time management strategies is to leverage technology to automate repetitive tasks.