What is Catch Up Accounting?

As a busy business owner, you may realize that you have neglected your bookkeeping and tax compliance for the past few months (or even years!).

This usually happens to businesses experiencing rapid growth, as all of the focus is placed on operations and customer service while accounting and compliance tasks are put off.

Now is the time to address this issue. It's important to ensure the long-term success of your business. 

So roll up your sleeves and get to work!

Why do you need Catch Up Accounting ?

Focusing on your operations and neglecting the administrative tasks like accounting or taxes is not sustainable in the long term. Sooner rather than later you have to take the time to do a proper catch up of your bookkeeping and tax requirements and set up proper financial processes moving forward.

If you don’t, you are exposing your company to serious issues:

1.Failure to file tax and/or wrong computation in tax filings: As you can imagine, improper tax filings can bring serious tax liabilities and hefty penalties. Make sure to have this sorted out as soon as possible to ensure you are compliant with all your tax obligations.

2.Other legal and regulatory issues: Businesses are required to maintain accurate financial records and meet certain reporting requirements. Without proper financials, it can be difficult to comply with these regulations, which can lead to legal and regulatory issues.

3.Running a business without proper dataRunning a business without proper data is like rock climbing blindfolded. Without strong financial data, you cannot turn your financial reports into actionable insights to help you make more informed business decisions. Attracting investors can also be difficult if you cannot show accurate financials.

What exactly is Catch Up Accounting and How is it performed ?

Catch Up Accounting is a process of updating or adjusting financial records of a company. It involves going back and correcting the errors or omissions in the financial statements, so that they accurately reflect the financial position of the business.

Catch Up accounting is a time consuming and complex process, as it involves reviewing and correcting a large amount of financial data, and is usually done by an experienced outsourced accountant with knowledge of the accounting and tax rules of the country. 

The steps will usually include:

1.Gathering receipts and supporting documents: collecting all of the necessary documentation, such as receipts, invoices, tax documents, payroll reports, etc. to accurately record transactions and prepare financial statements.

2.Understanding and recording transactions: reviewing the documentation that has been collected and ensuring that all transactions are properly recorded in the accounting records.

3.Reviewing some critical accountsreviewing certain key accounts, such as accounts payable, accounts receivable, and taxes, to ensure that they are accurate and up to date.

4.Performing bank reconciliationcomparing the bank statement with the business's accounting records to ensure that all transactions have been properly recorded and that the bank statement accurately reflects the financial position of the business.

5.Finalizing your Financial Statements and Catching Up Compliance: this step involves preparing the final financial statements and catching up on any missed submissions, such as tax returns or financial reports that were not filed on time.

            What to do after Catch Up Accounting is done ?

            Thanks to catch up accounting, you fixed your financials for the previous months or years.

            The next step for your company is to be able to timely and accurately prepare its financial and management reports on a monthly basis. This is how you will ensure your performance is monitored properly and your financial data provides strategic value.

            To know more about these financial and management reports and see how an outsourced accountant like Proseso Consulting can help your company upgrade its finance processes (bookkeeping, collections and disbursements, payroll processing, tax preparations, etc.), we invite you to look at these 3 blog articles: 

            Proseso Consulting - The Finance expert for growing and international businesses


            For more information on our Services or if you have any questions on how you can outsource your admin and accounting functions, contact me directly at ninoy@proseso-consulting.com.

            Proseso Consulting provides business advisory and finances managed services (bookkeeping and accounting, outsourced and automated payroll, tax compliance, financial reporting, etc.). We are here to help you achieve your long-term business goals!

            Ninoy Salmon is a seasoned business and finance professional with extensive experience working with both fast-growing startups and companies in the Philippines and around the world.

            Get in touch with our team at contact@proseso-consulting.com or visit us at www.proseso-consulting.com for more information about our services.

             

            This blog article does not constitute professional or legal advice. It is only intended to provide general information on a subject.

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