Catch-up bookkeeping: how to bring months of books up to date

What catching up involves

The books are behind when months of transactions haven’t been entered, categorised or reconciled. Catching up means getting every transaction from those months in, each in the right category, and reconciling every account to its statements. What else is behind depends on the business (sales, payroll, receipts), but the bank and card accounts are most of the work, and the rest leans on them. This guide is about those.

The slow part is rarely the typing. It’s finding out in month nine that a statement is missing, or that a month went in twice, and redoing the reconciliations after it. So the order matters: get every statement, check them, and only then import.

1. Gather every statement first

• Every account the business used, for the whole period: checking, savings, credit cards, PayPal or Stripe balances, loans, and accounts closed since.
• PDF statements, and files where the bank offers them. Online banking usually keeps statements further back than it lets you download transactions as a file. How far varies by bank, and older statements can be requested from it.
• The balance the books start from: the last reconciled balance in your accounting app, or, for an account that was never set up, the opening balance on its first statement.

Name the files by account and month as you save them. You’ll see the holes before you start, instead of halfway through.

2. Check none is missing or doubled

Before anything reaches the books, line the statements of each account up in order:

• Every day is covered. Each statement prints its period. Lay the periods end to end: they don’t always follow calendar months (the 15th to the 14th is common), and a month with no transactions still needs its statement to show that nothing happened.
• They join up. Each statement’s closing balance should be the next one’s opening balance. A break means a statement is missing, or one belongs to another account.
• Each one adds up. Opening balance + money in − money out = closing balance, for every statement. A converted statement that doesn’t add up has a row missing, doubled or misread.
• Nothing is in twice. Two downloads of the same month, or statements that overlap after the bank moved the statement date, print the same rows twice.
• The years are right. Many statements print dates without a year. On a statement running from December into January, the January rows belong to the next year.

3. Bring the transactions in

• Start where the bank feed stops. A connected bank feed only reaches back so far, often 90 days (why, and how far some banks go, is in QuickBooks missing bank transactions). Import files only for the months before the feed’s first transaction, and don’t count on the app to notice an overlap between a file and the feed.
• Mind the opening balance. Transactions dated before an account’s opening balance are already counted in it. If you add them, move the opening balance back to the new start date, or they count twice.
• Use the file your app reads best. For QuickBooks, a .qbo file: it has no columns to map, and an ID on every transaction, so uploading the same file twice added nothing in our tests. For Xero, an OFX or a CSV (Xero import).
• Split a busy year. QuickBooks Online takes up to 1,000 rows and about 350 KB per upload, and in our tests the CSV’s header counted as one of the rows. A year of a busy account needs a few files, a few months each.

4. Categorise, then reconcile month by month

• Set up bank rules first. Both QuickBooks and Xero let you set rules that categorise a payee every time it appears. With a year to review, the rent, payroll and subscriptions are worth a rule each before you start.
• Reconcile one statement at a time, oldest first. In QuickBooks Online, Reconcile asks for the statement’s ending date and ending balance, and the difference should come to zero. Each statement starts where the last one ended, so a mistake in March throws off every month after it: fix it before moving on.
• Keep the trail. The statements, the files you imported and what you checked. An accountant, a lender or next year’s you will ask where a figure came from.

Doing steps 2 and 3 with BankToRows

The batch page takes a year of PDF statements at once, as well as QBO, QFX, OFX, QIF and IIF files. Each one is read in your browser and checked against its own balances, as on the converter pages. Then the statements are put in order by the period each prints, and the page shows:

• every month, as checked, partly covered or with no statement;
• the days no statement covers, the days two statements both cover, and any closing balance the next statement doesn’t open with;
• rows printed on two statements covering the same days, with the second copy left out unless you keep both (two real payments on one day for the same amount do happen);
• several accounts dropped together, sorted and merged separately.

You review the merged rows as one table, each one saying which file and row it came from, and download them as one Excel, CSV or .qbo file, split into parts where QuickBooks needs it. The batch report lists each statement’s check, how every month is covered, and the rows left out or edited, for the client file.

Reading and checking a batch is free, so you see every gap and duplicate before paying. Downloading the merged rows and the report is Pro. One statement at a time stays free on the converters. Nothing is uploaded either way. Scanned statements need OCR, which BankToRows doesn’t do, and CSV files are converted one at a time on the CSV pages, where you choose their columns.