Catch-Up Bookkeeping vs. Ongoing Bookkeeping: What Does Your Business Need?
Maintaining your business books is a crucial part of owning a successful business. But what do you do when your books are several months in arrears? Or what do you do when you've been keeping your books up-to-date all along but feel you need ongoing assistance.
This is where catch-up bookkeeping and everyday bookkeeping steps in.
Both financial services deal with you maintaining tidy financial records, but they do so for different reasons. Recognising the distinction between the two can help you figure out what your business could benefit from now and what assistance may help you stay organised in the future.
What Is Catch-Up Bookkeeping?
Catch-up bookkeeping replaces the figures to bring the records up to date.
Maybe you have not been posting for a few months. You may have had a different bookkeeper before, or you may have attempted to run the books yourself but went into delay as you "had other things to do".
Catch-up bookkeepingcatch-up bookkeeping is bringing your books up-to-date.
A catch-up bookkeeping project may involve:
Entering missing transactions
Categorizing income and expenses
Reconciling bank accounts
Reviewing credit card transactions
Organizing receipts and invoices
Correcting bookkeeping errors
Updating accounts payable and receivable
Preparing financial reports
The exact work depends on how far behind your books are and the condition of your existing records.
When Does a Business Need Catch-Up Bookkeeping?
There are a few cases where catch-up bookkeeping could be helpful:
Your Books Are Several Months Behind
If you haven't logged your books in a few months, you might not have an accurate view of your current finances.
Catch-up bookkeeping can be used to catch up those records.
Tax Season Is Approaching
When preparing taxes, officers can become stressed when there is a lack of finance records.
Having your books up to date before working with your tax professional may allow you to provide accurate figures.
Your Previous Bookkeeper Left
You might have transactions that haven't been completed when the bookkeeper unexpectedly quits working for your business.
The catch-up project can get everything back in order.
You Are Applying for Financing
Financial information can be asked for to by lenders when you're applying for a business loan or other types of finance:
It can be challenging to provide updated financial reports if your books are out of date.
What Is Ongoing Bookkeeping?
Regular bookkeeping assistance that updates your financial records on an ongoing basis.Transactions are saved and checked on a more consistent basis, unlike waiting for several months to update your books.
Based on the requirements of your business, ongoing bookkeeping may be required weekly, every other week, or monthly.
Common tasks can include:
Recording business transactions
Reconciling bank and credit card accounts
Tracking income and expenses
Managing accounts receivable
Tracking accounts payable
Reviewing financial reports
Organizing financial documents
The goal is to keep your books current so you always have access to useful financial information.
Why Ongoing Bookkeeping Matters
Having up-to-date books can then help you to more easily see how well your business is doing.
You get to see how much you're making, where you're spending it, which customers are yet to pay you and what bills you need to pay.
It is the keeping track of your affairs on a regular basis that can enable you to spot any early warning signs.
For instance, you might see your expenses drift up or your customers paying longer. Keeping your accounts up-to-date allows you to spot these kinds of problems early.
Catch-Up vs. Ongoing Bookkeeping
The key difference is when.
For catch-up bookkeeping the aim is to make irrelevant records up to date.
The ongoing bookkeeping is about keeping your records up-to-date from this point on.
Catch-up bookkeeping is about getting things back in order. In other words, bringing your books up to speed. But ongoing bookkeeping is about staying on track.
For most firms, they can require both.
As an illustration, an owner might bring in an accountant to catch up six months behind on bookkeeping. After that point, the business could move to having bookkeeping done monthly to avoid a similar situation in the future.
Which Service Does Your Business Need?
Your current financial situation can help determine which type of bookkeeping support makes sense.
You may need catch-up bookkeeping if:
Your books are months behind.
Bank accounts have not been reconciled.
You have missing transactions.
Your financial reports are outdated.
Tax preparation is approaching.
You are unsure whether your records are accurate.
You may need ongoing bookkeeping if:
Your books are currently up to date.
You want regular financial reports.
Your business has consistent transactions.
You want to monitor cash flow.
You want to avoid falling behind again.
You want more time to focus on running your business.
If your books are significantly behind, starting with catch-up bookkeeping may be the first step. Once everything is organized, ongoing bookkeeping can help maintain your records.
Do Not Wait Until Your Books Become a Problem
It is always much simpler to keep the bookkeeping clear regularly.
When records are left to slide for months at a time, catching up can take a long time and may obscure the picture a lot.
If at this point you are too far behind don't panic. A skilled professional can assess your records, identify the gaps in information, and devise a strategy for bringing your books up-to-date.When your records are up to date, using them on an ongoing basis will help you keep track of them and keep you informed.
Find the Right Bookkeeping Support
Every business has different bookkeeping needs. Some businesses may only need monthly support, while others may need more frequent assistance. Businesses with outdated records may first need a catch-up project before moving to ongoing bookkeeping.
The Bookkeeper Marketplace can help business owners connect with bookkeeping professionals who can provide the type of support they need. Whether you need help getting months of records organized or want someone to maintain your books regularly, finding the right bookkeeping support can save time and reduce financial stress.
The goal is simple: get your books caught up, keep them current, and use accurate financial information to make better business decisions.
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