How far behind on your books is too far?

One to three months behind

This is where most owners are, and it's fine. The bank feeds are still in your software, you still remember most transactions, and catching up is a few sittings of work. The risk is that one month becomes three without anyone deciding it.

Four to twelve months behind

Now it starts to cost you. You can't plan quarterly estimated taxes from current numbers, you can't see whether last quarter was profitable, and you've forgotten what half the transactions were. Bank feeds in some software only go back so far, so you may need PDF statements to fill gaps.

This is the range where a cleanup pays for itself: one fixed project to rebuild the months, then a monthly routine so it doesn't happen again.

Over a year behind

It's still fixable, and more common than you'd think. The work is the same, just more of it: every month rebuilt from statements, every account reconciled. The main risk is tax deadlines, so tell your accountant early. They may file an extension while the books are caught up.

What catching up involves

• Downloading PDF statements for every bank, card and loan account for the missing months.
• Entering or importing every transaction and categorizing it.
• Reconciling each account, month by month, to the statement balance.
• Answering a short list of questions about transactions that can't be identified.

How to keep it from happening again

The fix is a routine, not willpower: books closed every month, by you on a set day or by a bookkeeper. If you'd rather it be us, the free 30-minute books review is where we work out where you stand. No judgment.