Catch-Up Bookkeeping Checklist: Everything You Need to Get Started

You're ready to catch up on your bookkeeping.

You open your laptop, pull out a bank statement, and then realize you're not sure what you're supposed to gather before you start.

What exactly should you gather first?

One of the easiest ways to make catch-up bookkeeping take longer than it needs to is to begin before you have all your records.

You work through six months of transactions. Then you discover another credit card you used for business. You add those transactions, realize some customer payments went through a separate payment platform, and end up redoing work you'd already finished.

A little organization at the beginning makes the whole process easier. This checklist covers the bank statements, credit-card statements, income records, receipts and other information you may need before you start organizing your books.

Catch-up bookkeeping checklist

Before you start entering or categorizing transactions, gather whichever of these apply to your business.

Financial accounts

• Business bank statements
• Business credit-card statements
• Personal bank statements containing business transactions
• Personal credit-card statements containing business transactions
• Savings account statements used for business
• Payment-platform statements or reports
• Loan or financing statements
• Other financial accounts used by the business

Income records

• Customer invoices
• Sales reports
• Payment-processor reports
• Online marketplace reports
• Deposit records
• Cash sales records
• Other income records

Expense records

• Receipts
• Supplier invoices
• Email receipts
• Online order histories
• Subscription invoices
• Professional membership invoices
• Insurance documents
• Telephone and internet bills
• Advertising invoices
• Contractor invoices
• Travel receipts
• Vehicle records
• Records of significant equipment or other purchases

Other information

• Mileage or vehicle-use records
• Business calendar
• Contracts
• Loan documents
• Records of money you personally put into the business
• Records of money you withdrew for personal use
• Previous bookkeeping records
• Notes about unusual transactions
• Details of any transactions you already know need review

You may not need everything on this list. A consultant with one bank account and a credit card could have a very short checklist. A business using several accounts, payment processors and financing could have a lot more to gather.

The objective isn't to collect documents for the sake of it. It's to build a complete picture of where money entered and left your business during the period you're reconstructing. Both tax authorities expect records like these to support what you report. See the IRS on what kind of records to keep and the CRA on business records.

Working through the checklist

1. Start with every bank account used for business

Your bank statements are usually the backbone of a catch-up bookkeeping project. Download the complete period you're reconstructing. If you're catching up a calendar year, that normally means January through December.

Don't stop at the account you think of as your "main" business account. Ask yourself: did any business money pass through another account? Perhaps you:

• deposited customer payments into another account
• moved money into savings
• paid expenses from a personal chequing account
• opened a new business account partway through the year
• stopped using an old account during the year

If so, gather those records too.

Check that every month is present. It sounds simple, but it's worth doing before you start. Tick off January through December for each account. A missing statement can mean missing transactions, and that's much easier to spot before you've started categorizing.

2. Gather every credit card used for business

Don't limit yourself to cards you think of as business cards. If you used a personal card to buy software, supplies, equipment, advertising, travel, professional services or other business items, those transactions may belong in your bookkeeping.

Download the complete period for each card with business activity.

3. Watch out for credit-card payments

This is one of the most important things to understand when reconstructing bookkeeping from statements.

Suppose your bank statement shows:

Credit Card Payment — $2,000

Your credit-card statement then shows the individual purchases that make up that balance.

If you record the $2,000 payment as a business expense and record the individual purchases as expenses, you may have counted the same spending twice.

The payment from your bank account to the card is generally a movement of money between accounts. The card transactions show what you actually bought. Flag transfers and card payments early, so they aren't treated as extra expenses.

4. Gather your income records

Bank deposits are useful, but they aren't always the same as business revenue. You may be paid by bank transfer, cheque, cash, card processors, online marketplaces, payment platforms or other services.

Gather whatever shows what you actually sold or earned: customer invoices, sales reports, payment-platform reports, marketplace statements, cash sales records or booking-system reports.

This matters most when a payment processor deposits net amounts. For example:

• the customer pays $1,000
• the processor keeps a $30 fee
• your bank receives $970

Looking only at the bank statement, it could seem your revenue was $970. The processor report shows $1,000 of customer payment and a separate $30 fee. Your income records explain what's behind the deposits.

5. Identify transfers before you categorize anything

Transfers can cause significant errors in catch-up bookkeeping. Look for money moving:

• between chequing and savings
• between two business bank accounts
• from the bank to a credit card
• between payment platforms and bank accounts
• into accounts you use to set money aside
• between any other accounts you own

A transfer can show up as money leaving one account and arriving in another. That doesn't mean you earned income or had an expense. Mark the obvious transfers before you categorize the rest.

6. Gather receipts and supplier invoices

Your statements tell you money moved. Receipts and invoices help explain why it moved.

Gather what you already have: paper receipts, emailed receipts, PDF invoices, supplier statements, online invoices and order confirmations. Don't worry if they aren't organized yet. At this stage you're collecting. You can match them to transactions later.

7. Search your email for missing receipts

Your inbox can work as an accidental filing cabinet. Search for words like receipt, invoice, order, payment, subscription and renewal, then for merchants that show up repeatedly on your statements.

If you see XYZ SOFTWARE — $29 every month, searching for that merchant may turn up the invoice that explains it.

You don't need to do this for every expense before you start. The point is to know where to look when a transaction needs more information.

8. Check your online purchase histories

Check the order history for retailers and services you use regularly. You may be able to recover receipts, invoices, item descriptions, order dates, payment methods and subscription details.

That's especially useful when a statement names the merchant but not what you bought. If you're dealing with missing documentation, see how to reconstruct business expenses for taxes in Canada or the US.

9. Look for business purchases made from personal accounts

This one deserves its own step because it's so easy to miss.

Suppose you carefully reconstruct every transaction in your business bank account and business card, and everything balances. But during the year you also used your personal card for a software subscription, office supplies, a conference, parking or a piece of equipment. Those won't appear in your business statements.

Review personal accounts specifically for business transactions. You don't need to add every personal transaction to your bookkeeping. You're looking for the business transactions hidden among them.

10. Think about cash

Did your business receive cash, or pay expenses in cash? If so, your statements won't capture the full picture.

Gather any cash sales records, receipts, invoices, cash logs, deposit records or notes. Cash activity is hard to reconstruct long after the fact, which makes whatever records you kept at the time especially useful.

11. Gather payment-processor reports

If customers pay through a processor or marketplace, download the relevant reports. They show gross customer payments, processing fees, refunds, chargebacks, net deposits and transaction dates.

Without them, you're reverse-engineering customer activity from whatever eventually landed in your bank account.

12. Gather records for large purchases

Significant purchases deserve extra attention: computers, phones, furniture, tools, machinery, specialized equipment, vehicles and other substantial assets. Keep those invoices or receipts together if you can.

You don't need to decide the accounting or tax treatment while gathering records. You just want large purchases to be obvious, so they don't get buried among everyday expenses.

13. Gather vehicle and mileage records

If you use a vehicle for business, gather whatever you kept during the year: mileage logs, calendar and appointment records, trip information, fuel receipts, insurance, repairs and maintenance, and parking.

Your statements show what you spent on the vehicle. They don't show how much of its use related to your business, which is why vehicle-use records are gathered separately. Our vehicle worksheets for Schedule C and the T2125 show what to pull together.

14. Identify mixed business and personal expenses

Some costs aren't entirely business or entirely personal: cell phone, internet, vehicles, shared subscriptions, some travel and other shared costs.

Flag these rather than categorizing the whole amount as business. Your catch-up file should make it easy to see which expenses still need their business portion worked out.

15. Gather loan and financing records

If the business borrowed money, gather the loan agreements, financing statements, lines of credit, equipment financing and other borrowing records.

A loan deposit shouldn't automatically be treated as income just because money came into the account. Likewise, a loan payment can be made up of different parts, such as principal and interest, and shouldn't automatically be treated as an ordinary expense. Flag financing activity separately.

16. Look for money you put into the business

Did you transfer personal money into the business account? Identify those deposits.

Personal transfer into business account — $5,000 is not automatically $5,000 of customer revenue. When you're reconstructing a year from statements, spotting your own contributions keeps them out of business income.

17. Look for money you took out of the business

The reverse matters too. Money you transferred from the business to yourself isn't automatically a business expense just because it left the account. Flag owner withdrawals and other personal transactions separately from operating expenses.

18. Find your previous bookkeeping records

If you kept books in earlier years, find those records. They show how recurring transactions were categorized, which accounts were used, recurring suppliers, existing loans, equipment bought earlier and how the business was organized.

Don't copy what was done before without thinking. But earlier records give useful context when you're trying to make sense of a year of transactions.

19. List anything you already know was unusual

Before you begin, take five minutes to write down anything unusual that happened during the year. For example:

• opened a new bank account
• closed an old credit card
• bought a computer
• borrowed money
• received a large refund
• started using a payment processor
• made a major business purchase personally
• travelled for business
• moved offices
• changed how customers paid

That list becomes a roadmap for the transactions that need extra attention.

20. Create one place to organize everything

Once you've gathered your records, you need somewhere to put the transaction information. For a straightforward business, that can be a spreadsheet.

Download the free Catch-Up Bookkeeping Excel Template (XLSX)

The Review? column is especially useful during catch-up bookkeeping. If you don't understand a transaction, don't stop the whole project. Flag it, keep going, and come back to the unclear items later.

What if I don't have everything on the checklist?

That's normal. The checklist isn't a requirement to produce every possible document before you can start. Plenty of businesses have no loans, cash, payment processors, vehicle expenses, extra accounts or large equipment purchases. And you may find that some records are missing.

Start with what you have. Then make a second list of records I still need:

• Missing March bank statement
• Credit-card statement for July
• Software invoice
• Equipment receipt
• Payment-processor annual report
• Information about an unknown transaction

That turns a vague problem, "My bookkeeping is a mess," into a specific one: "I need six documents." That's much easier to solve.

What should I do once I've gathered everything?

Once the checklist is substantially complete, you're ready for the catch-up itself. A simple workflow:

Gather → Consolidate → Identify transfers → Identify income → Separate business and personal → Categorize → Review → Summarize

For the full process, see how to catch up on a year of bookkeeping. If most of your activity is in your statements, see how to do bookkeeping from bank statements. If your records are incomplete, see how to reconstruct business expenses in Canada or the US.

Those articles cover the work itself. This checklist makes sure you have the raw material before you begin.

Do I need bookkeeping software before I start?

Not necessarily. First decide what problem you're solving.

If you want an ongoing accounting system to maintain your books throughout the year, full bookkeeping software may make sense. For a straightforward historical catch-up, you might instead use a spreadsheet, hire a bookkeeper, or use software that organizes the historical transactions. The right choice depends on the complexity and volume of your bookkeeping.

What if I have all the statements but don't want to enter them by hand?

This is where Heightly can help. Heightly is designed for straightforward sole proprietors who reach tax time with bank and credit-card statements that haven't been organized yet.

Instead of typing every transaction into a spreadsheet, you upload the statements to Heightly. It helps:

• extract the transactions
• organize them
• suggest possible categories
• flag items for your review
• create organized PDF and Excel reports

You still review the results and add anything that isn't in the statements. Heightly doesn't know the business purpose of every transaction, replace missing receipts, decide whether an expense is deductible, or replace professional advice.

Its role is narrower: reducing the manual work between gathering your statements and having an organized transaction list to review.

The most important step happens before you start

When you're months behind, it's tempting to start entering transactions right away. But gathering the complete records first can save a lot of work later. Before you start, make sure you've thought about:

• every account
• every way customers paid you
• every way you paid business expenses
• every major purchase
• every transfer
• every source of supporting information

You don't need a perfect filing system to catch up. You just need to know where the business activity happened, and gather the records that explain it. Once that's done, the bookkeeping becomes a much more manageable problem.

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This article provides general bookkeeping information only and is not accounting, tax or legal advice. Appropriate records and bookkeeping practices depend on your business, circumstances and jurisdiction. Heightly and the Heightly Catch-Up Bookkeeping Excel Template are organizational tools and do not determine tax treatment, replace supporting documentation or replace professional advice.