Catch up bookkeeping

What is catch up bookkeeping?

Catch up bookkeeping is the process of updating or reorganizing your financial records after falling behind on maintenance. It’s typically a service for business owners who lack the time or expertise to fix their books, especially when the backlog gets overwhelming.

For example, you might find that months—or even years—have gone by while you were too busy running your operation to focus on bookkeeping tasks. 

This can include manually categorizing expenses, breaking out revenues, or reconciling your business bank account.

As the number of unaddressed transactions increases, the idea of getting caught up can feel increasingly daunting. 

However, you can’t ignore the issue forever because accurate financial statements are essential for compliance and informed decision making.

Catch up bookkeeping services offer a practical solution. Instead of finding enough spare time or energy to tackle the problem—which is unlikely, if you haven’t been able to before—you can offload the bulk of the financial management work to an expert.

Typically, your only responsibility is to provide key financial documents such as bank and credit card statements, invoices, and receipts. 

Occasionally, your bookkeeper may also ask clarifying questions about certain transactions when the documentation is unclear.

If you’re falling ever further behind on your ongoing bookkeeping, consider addressing the issue sooner rather than later. The longer you wait, the more difficult and expensive it becomes to catch back up.

When catch up bookkeeping is a good idea

Falling more than a year behind

It’s relatively common for a small business owner to fall a few weeks or months behind on bookkeeping. While that can create certain challenges, it’s unlikely to be an existential threat to your company, and you can often get caught up on your own.

However, once you fall a year or more behind on your bookkeeping, your out-of-date financial information is much more likely to impact your business in a tangible way. 

You may find yourself missing critical recurring deadlines or making key business decisions with outdated or incomplete data.

The difficulty of catching up on your books also increases exponentially around the same time. Inaccuracies in your records often begin to compound, creating a tangled web that’s increasingly time-consuming to unravel.

For instance, it may take only a few weeks to get through a backlog of several months, but a backlog of several years could take months to resolve due to the sheer volume and complexity of the financial transactions involved.

In addition, your memory of transaction details from previous years typically fades, making it harder to accurately categorize expenses or recall the purpose of specific purchases. 

Similarly, loose supporting documentation—like a receipt or invoice—can become more difficult to locate unless you have a consistent system for retaining them.

If you’re approaching—or already beyond—a year behind on your financial reporting, consider investing in a catch up bookkeeping service before the backlog grows further and prevents you from making informed decisions.

Struggling to navigate tax obligations

Without accurate bookkeeping, tax compliance is a guessing game, especially if your operation has any complexity. Unless you’re a solo operation with very limited expenses, you’ll typically need a full set of financial statements to fulfill your obligations.

Otherwise, you risk making potentially costly mistakes, like misreporting your gross annual income, failing to claim all the tax deductions you’re eligible for, or underpaying your state or federal estimated taxes throughout the year.

Not only can these common bookkeeping mistakes cause you to pay more in taxes than you need to, but some can even result in penalties and interest charges—all of which can impose a significant drag on your business’s finances.

In addition, noncompliance can increase your chances of being subject to an Internal Revenue Service (IRS) audit. That process is daunting in the best of times, but it’s especially challenging without accurate reporting.

Auditors may request detailed documentation to support your income and expense claims. If you can’t provide them, they can recalculate your income, disallow deductions, or impose additional penalties.

If you’re finding it difficult to keep up with your tax compliance due to out-of-date or inaccurate financial records, it may be time to consider professional bookkeeping services.

Experiencing cash flow problems

Effective bookkeeping best practices are particularly essential to cash flow management. In fact, cash flow problems are often one of the earliest indicators that your business might benefit from bookkeeping cleanup.

Cash flow management is all about timing—knowing exactly when money will be coming in and when it needs to go out. 

To make informed business decisions, you must be able to accurately forecast your cash inflows and outflows for the next few months, which requires detailed knowledge of your cash position and past transactions.

This is often especially critical for startups, which are typically pursuing rapid growth, operating at a loss, and carrying limited cash reserves. In these situations, every dollar counts, and a lack of real-time visibility can be disastrous.

Not only does poor visibility make it difficult to manage day-to-day cash flows and meet financial obligations, but it also prevents you from calculating your cash runway accurately—a vital metric when planning future fundraising.

If you’re already experiencing frequent cash flow shortages, late bill payments, or uncertainty about how long your funds will last, consider whether overdue bookkeeping is holding you back.

Raising debt or equity funding

Lenders and investors need a clear, accurate, and up-to-date view of your company’s financial record to decide if they’ll provide you with capital. If your books are behind or riddled with inaccuracies, it can derail your fundraising efforts before they even begin.

When raising funds, small business owners should be ready to provide income statements, balance sheets, and cash flow reports that third parties can use to assess your business’s stability, growth potential, and risk profile.

Beyond your initial application, accurate records put you in a much stronger position during negotiations. When you can confidently answer questions about revenue trends, margins, or burn rate, you build trust and demonstrate professionalism.

Conversely, scrambling to explain discrepancies or produce missing documents can cause you to lose leverage and potentially settle for less favorable terms.

If you’re expecting to prepare for pitch meetings, apply for traditional business loans, or negotiate venture capital deals in the near future, your financial records must be up to date. If they aren’t, catch up bookkeeping may be necessary.

How much does catch up bookkeeping cost?

Catch up bookkeeping costs vary depending on the provider. 

For example, Certified Public Accountant (CPA) firms and other local accounting services may charge extra for their expertise and overhead, while solo bookkeepers or virtual outsourced bookkeeping services may be more affordable.

How much you end up paying also depends on the complexity of your books and how far behind you are. While pricing structures differ—with options including an hourly rate, flat fee, or monthly subscription—the difficulty is generally baked in one way or another.

For example, Zeni offers catch up bookkeeping starting at $549 per month, while Xendoo’s rates start at $395 per month. If it took six months to clean up the backlog in your QuickBooks Online file, you might expect to pay $2,370 to $3,294.

Because rates can vary, it’s best to get several personalized quotes before committing to a provider. In addition to the price, make sure to consider the level of expertise, turnaround time, and ongoing support you’ll receive once your books are up to date.

Hire Zeni for your catch up bookkeeping

Do you need to get your bookkeeping back on track? Zeni offers a unique catch up solution that combines dedicated financial support with AI-powered accounting software. We’ll get you up to date quickly and efficiently—no matter how behind you are.

Once you’re caught up on all crucial bookkeeping clean up checklist items, you’ll never have to worry about falling behind again. Zeni will continue to update your books in real time, giving you constant access to your most current financial information.

In addition, each of Zeni’s monthly bookkeeping software and service subscriptions includes:

• Streamlined expense reimbursement and bill payment software
• Checking accounts that offer $3M FDIC insurance and earn 3.34% APY
• Credit cards that generate 1.75% cashback and have AI spend management

If any other financial challenges have arisen due to your outdated books—such as tax compliance or fundraising issues—you can also add on tax preparation and fractional CFO services, all integrated on a single platform.

Ready to get your finances in order for good? Start your journey to financial clarity today with AI bookkeeping.