What to Do If You’re Months (or Years) Behind on Your Bookkeeping
Let’s face it: life gets busy. You start a business to do what you love—not to spend hours buried in spreadsheets. If your bookkeeping has fallen months (or even years) behind, you’re not alone. And the good news? It’s absolutely fixable.
At DPP Bookkeeping, LLC, we help small business owners just like you get caught up, cleaned up, and back on track. Here’s a step-by-step guide to help you move from financial chaos to clarity—without the stress.
Step 1: Take a Breath and Assess the Damage
First things first—don’t panic. Behind on your books? It happens.
Ask yourself:
How far behind are you? (3 months? 12 months? More?)
Are you missing bank statements, receipts, or invoices?
Have you filed taxes recently?
Tip: Make a quick list of accounts you use (checking, credit cards, loans, PayPal, etc.) and how far back the records go.
Step 2: Stop Mixing Personal and Business Finances
If you’re still using one bank account for everything, now is the time to separate it.
Why it matters:
Makes cleanup MUCH easier
Keeps your books accurate moving forward
Open a business bank account and commit to using it only for business transactions from here on out.
Step 3: Gather Your Financial Documents
You’ll need source data to recreate your books. Gather:
Bank and credit card statements (digital downloads work great)
Loan statements
Receipts (physical or digital)
Invoices and payment records
Any previous bookkeeping files or spreadsheets
Pro tip: Most banks let you download up to 18 months of statements. For older records, contact your bank directly.
Step 4: Choose a Bookkeeping System (or Bookkeeper)
Now’s the time to get serious about staying organized.
If you're DIYing:
Use QuickBooks Online (QBO) for automation and bank feeds
Set up your chart of accounts based on your industry
Import transactions one account at a time
If you're overwhelmed:
Hire a professional bookkeeper (like me!) to take over the heavy lifting
Why this matters: You’ll save hours of frustration and avoid common cleanup mistakes.
Step 5: Start with the Most Recent Year and Work Backward
It’s tempting to go all the way back to day one, but focus on what’s urgent first:
Start with the current or most recent tax year
Prioritize months where there were large transactions or major changes
Once you’re caught up to the present, go back further if needed
Step 6: Reconcile All Bank and Credit Card Accounts
This is where cleanup really happens:
Match every transaction in your books to your actual bank/credit card statements
Flag and fix duplicates or missing entries
Use reconciliation reports to ensure accuracy
Why it matters: Reconciliation ensures your books reflect real-world activity and prevents tax or cash flow errors.
Step 7: Run Key Financial Reports
Once your books are caught up and reconciled, generate your:
Profit & Loss Statement
Balance Sheet
Cash Flow Report
Why this matters: These reports help you (and your tax preparer) understand the financial health of your business and file taxes accurately.
Step 8: File Missing Taxes or Amend Past Returns (if needed)
If your bookkeeping has been out of date for more than a year, you may have missed a tax filing or underreported income.
Work with a CPA or tax professional to:
File back taxes
Amend past returns with corrected numbers
Minimize penalties or interest
Final Thoughts: You Don’t Have to Do This Alone
Catching up on bookkeeping may seem overwhelming, but it’s completely doable—with the right tools, process, and support.
At DPP Bookkeeping, LLC, we specialize in bookkeeping cleanups. Whether you’re three months or three years behind, we’ll help you get back on track with zero judgment and a clear path forward.
Let’s clean it up. Visit DPPBookkeeping.com to schedule your free consultation today.