Catch-up bookkeeping

It's a bigger job, not a different one

Being behind on the books is one of those problems that grows in your head faster than it grows in reality. Two years of unreconciled transactions is more work than two months. It is the same work.

What actually makes catch-up harder isn't elapsed time — it's missing records. Bank statements can always be obtained from the bank. Purchase invoices, once lost, limit what VAT can be reclaimed, because the invoice is the evidence HMRC requires. So the single most useful thing you can do today is stop worrying about the months and start collecting the paperwork.

Catch-up or cleanup — they're not the same

Worth knowing which you have, because they're priced differently and cleanup is usually the harder one.

Most engagements are some of both. A year that was half-done by someone who left mid-way is the commonest version, and the half that was done often needs more attention than the half that wasn't.

What it costs

Catch-up work is priced on the state of the records, so a fixed fee comes after someone has looked at them, not before. Anyone quoting a number without seeing the file is guessing, and the number will change later.

The main drivers:

• Transaction volume — a hundred transactions a month is a different job from two thousand
• Bank accounts and card feeds — each one is a separate reconciliation
• VAT — registered businesses need the position established quarter by quarter, not just in total
• Surviving paperwork — the single biggest variable
• Payroll running through the same period
• Whether anyone attempted it — see cleanup, above

It's normally priced per month or per quarter brought up to date, so you can see exactly what you're buying. Ongoing bookkeeping afterwards, if you want it, is £195 + VAT a month and quoted separately. See what UK bookkeeping typically costs.

How it works

How long it takes

For a small business, a year of catch-up is typically one to three weeks of elapsed time — but that depends far more on you than on us. The bottleneck is almost never the coding; it's waiting for statements, missing invoices and answers to queries.

Businesses that gather their paperwork before the work starts see it finished much faster, and usually cheaper.

What to collect now

Whoever ends up doing the work, this list is the same. Starting it today shortens everything that follows:

• Bank statements for every account, for every month outstanding — downloadable from online banking, usually as CSV
• Credit card and finance statements, including anything on a director's personal card that belongs to the business
• Purchase invoices and receipts — the ones that determine what VAT you can reclaim
• Sales invoices, or the system they were raised in
• Loan, HP and lease agreements — needed to split capital from interest correctly
• Payroll reports for the period
• Last filed accounts — the opening position everything builds from
• Any VAT returns already submitted, including estimated ones

Missed VAT returns

Estimated or missed returns can be corrected. HMRC treats errors differently depending on whether they're disclosed voluntarily or discovered during a compliance check — so the position is generally better if you come forward first.

Either way the starting point is the same: establish what the correct figures actually are. That's what this work produces.

If a deadline is close

Companies House and HMRC penalties escalate, and Companies House late filing penalties double if it happens two years running. If you're near a filing date, say so at the start — the order the work is done in changes, and the periods feeding the imminent deadline get done first.

We can also prepare the statutory accounts and Corporation Tax return that follow, for small and micro-entity companies, so the catch-up runs straight through to filing rather than stopping at a trial balance. Personal Self Assessment and specialist tax work are referred to a specialist firm.

Doing it yourself

Perfectly possible, and for a small volume it may be the right answer. If you're going to, the order that works is: reconcile the bank first, one account at a time, oldest month forward. Don't jump around. Don't start with the invoices. And don't try to make the VAT work until the bank reconciles, because until then you don't know what you're looking at.

Where it usually goes wrong is opening balances — if the first period doesn't agree to the last filed accounts, everything after it is built on sand.

Work runs on your existing Xero, or on Sage 50 or Sage 200. Based in Northamptonshire, working across the surrounding counties in person where that helps, and remotely nationwide.