Two years behind on the books: how a catch-up actually works
· RKube Services
An illustrative walkthrough of a two-year bookkeeping catch-up: pulling statements, reconciling month by month, and getting bank-ready financials.
Illustrative example. This is a composite scenario based on common situations, not a specific RKube client.
Picture a Raleigh remodeling contractor with six employees and a good reputation. Work has been steady for years. The books have not. The owner stopped reconciling accounts about two years ago when the business got busy, and both the 2024 return and the 2025 return went out on extension.
Now the bank wants financial statements for an equipment loan. The owner has a shoebox of receipts, a business card that sometimes paid for groceries, and a vague sense that the numbers in the accounting software are wrong.
This is one of the most common situations we see. Here is how a catch-up usually goes.
Week 1: get the raw data
Before anyone touches a transaction, we pull every bank and credit card statement for the missing period, straight from the bank as PDFs. Statements are the source of truth. The accounting software isn't, at least not yet.
We also ask for payroll reports, loan statements, and any sales tax filings. Missing pieces go on a list, and the owner gets one short request instead of a dozen emails.
Weeks 2 to 3: reconcile month by month
Each month gets reconciled against the statement, oldest first. Duplicate entries get removed. Personal charges get reclassified as owner draws. Deposits get matched to invoices so income isn't counted twice, which is a surprisingly common problem when a bank feed and manual invoices both record the same payment.
For a contractor, job costing matters too. Materials and subcontractor costs get tied to jobs where the records allow it, so the owner can finally see which kinds of jobs make money.
Week 4: the numbers that come out
At the end, the owner has:
- Reconciled books for every month in the gap
- A profit and loss statement and balance sheet the bank will accept
- A list of 1099s that should have gone to subcontractors
- Clean numbers to finish the extended returns
What changes after
The catch-up is a one-time project. What keeps it from happening again is a monthly routine: reconcile every account, review the P&L, and deal with questions while the details are still fresh. It takes a few hours a month instead of a few weeks every other year.
If this sounds familiar
RKube Services does catch-up bookkeeping and monthly bookkeeping for small businesses in North Carolina and across the US. Call 984-234-7030 or visit rkubeservices.com.
General information only. Timelines vary with the volume and condition of records.