Behind on Bookkeeping Before Tax Time: How Small Businesses Can Catch Up Fast 

Tax season has a way of sneaking up on small business owners. One day you’re focused on sales, clients, and operations — and the next, your accountant is asking for financial reports you’re not sure you have. 

If your bookkeeping is behind and tax deadlines are approaching, you’re not alone. Many small businesses fall behind during busy seasons, growth spurts, or slow months when finances take a back seat. The good news? Even messy or incomplete books can be fixed — if you act quickly and strategically. 

What “Behind on Bookkeeping” Really Looks Like 

Being behind doesn’t always mean nothing is done. It often looks like: 

  • Bank accounts haven’t been reconciled for months 
  • Expenses are sitting uncategorized 
  • Personal and business transactions are mixed 
  • Invoices were sent, but payments weren’t properly recorded 
  • Sales tax or payroll reports are incomplete 

Example: 

A freelance marketing agency came to Remote Books in February with bookkeeping done only through July. They had multiple credit cards, PayPal, and Stripe accounts — none reconciled. Their CPA couldn’t even estimate taxes without clean numbers. 

Why Catching Up Before Tax Time Matters 

Unready books don’t just slow down tax filing — they can cost you money. 

  • Missed deductions because expenses aren’t recorded 
  • Incorrect income totals leading to overpaid taxes 
  • Late filing penalties from the CRA or IRS 
  • Extra CPA fees for last-minute cleanup 

Example: 

A small eCommerce store owner tried to file taxes using bank statements alone. After a cleanup, we uncovered thousands in shipping fees and platform charges that were never recorded — reducing taxable income significantly. 

Step 1: Gather Everything (Even If It’s Messy) 

The fastest way to catch up is to stop guessing and start organizing. Pull together: 

  • Bank and credit card statements 
  • Payment processor reports (Stripe, PayPal, Shopify, Square, Amazon) 
  • Receipts (digital or paper) 
  • Outstanding invoices and bills 

Don’t worry if things don’t match yet. Accuracy comes later — visibility comes first. 

Step 2: Reconcile Accounts Month by Month 

Trying to fix an entire year at once is overwhelming. Break it down by month. 

  • Start with January 
  • Match transactions to statements 
  • Identify missing or duplicate entries 

Example: 

A construction contractor thought they had cash flow problems. Once monthly reconciliation was done, it turned out unpaid invoices — not low profits — were the issue. 

Step 3: Separate Business and Personal Expenses 

This is one of the biggest red flags for accountants and tax authorities. 

If personal expenses are mixed in: 

  • Identify and remove them 
  • Reimburse the business properly 
  • Document everything clearly 

Example: 

A consultant used one credit card for groceries, travel, and client expenses. Cleaning this up before tax time prevented deductions from being denied during a review. 

Step 4: Review Tax-Critical Accounts First 

When time is limited, prioritize what matters most for taxes: 

  • Revenue accounts 
  • Cost of goods sold 
  • Payroll and contractor payments 
  • Sales tax or GST/HST 

Perfect books aren’t the goal — tax-ready books are. 

Step 5: Get Professional Help When Time Is Tight 

DIY bookkeeping catch-up can take 20–40+ hours, especially under pressure. For many business owners, that time is better spent running the business. 

A remote bookkeeping service can: 

  • Catch up months of bookkeeping quickly 
  • Ensure accuracy for your CPA 
  • Reduce stress and costly mistakes 

Example: 

A startup founder tried to fix 10 months of bookkeeping in one weekend. After switching to Remote Books, their books were caught up in days — and filed on time without penalties. 

Summary: Don’t Wait Until the Deadline 

Tax season doesn’t wait — and the longer bookkeeping is delayed, the harder (and more expensive) it becomes to fix. 

If your books aren’t ready, the best time to act is now, not a week before filing. 

Behind on your books and worried about tax filing? 

We have All-in-One Service of Bookkeeping + Tax Filing! 
 so you don’t have to juggle multiple providers. 

✔ Clean, tax-ready books 
✔ Business tax filing (Canada & U.S.) 
✔ One team. One process. Less stress. 

👉 Get everything handled before tax deadlines hit. 

Book a free Consultation