Two Years Behind: How Catch-Up Actually Works

Being two years behind feels like being one year behind, twice over. It is not, and understanding why explains both the cost and the sequence.

Why old periods cost more than recent ones

Memory. The largest factor by far. You can tell someone what a transaction from last month was. A transaction from twenty-two months ago is a guess even for you. Every ambiguous item in an old period costs more to resolve, and some cannot be resolved at all.

Records expire. Bank portals commonly keep 18–24 months of statements online. Past that you are requesting archives from the bank, sometimes for a fee, always with a delay. Vendor portals are worse. Some records simply stop being retrievable.

Errors compound. A misstated opening balance in period one is wrong in all twenty-four that follow. Finding it early fixes everything downstream; finding it late means redoing work.

This is why the first thing anyone should do — before deciding whether to catch up at all — is pull and save every bank and card statement for the entire period. It costs nothing today and it may be impossible in six months.

The order of work

Oldest first, always. Each period's closing balance is the next period's opening balance, so working backwards means reconciling against figures you have not verified.

Within that, the sequence per period is the same as a normal close: capture, categorise, reconcile, adjust, review. The difference is that questions get batched — you do not want twenty-four separate rounds of queries, so the ambiguous items accumulate into one list per few months.

What actually takes the time

People assume it scales with transaction count. It scales with judgement calls.

Ten thousand transactions from a clean, separated business account is largely mechanical. Two thousand from a card that also bought groceries is a much longer job, because each one is a decision somebody has to make.

Same for entities. Two years for one company is roughly twice one year. Two years across three related entities with money moving between them is considerably more than three times, because every intercompany transfer has to agree on both sides.

What you can do to make it cheaper

Three things, in order of impact:

1. Get the statements now. Every account, every month, downloaded and saved. This alone can be the difference between reconstruction and reconciliation.
2. Answer questions quickly. The query list is the critical path. A client who turns around answers in a day rather than three weeks materially shortens the project.
3. Find the loan statements and any year-end payroll reports. These are the documents that let liabilities be verified rather than estimated, and they are the ones nobody has to hand.

What comes out the other end

Reconciled books for every period, restated financial statements, a documented list of anything that could not be resolved, and a summary of what changed.

That summary matters if returns were already filed from the old figures. Whether anything needs amending is a decision for your CPA or tax professional — we produce the corrected numbers and the explanation of what moved; they decide what to do about it.

The honest framing on cost

Multi-year catch-up sits at the upper end of the range, and there is no useful way to quote it without looking. What we can commit to is that the price is fixed before any work starts, so the uncertainty is ours rather than yours.

Most people put this off because they are afraid of the number. In our experience the number is usually smaller than the anxiety, and it never gets smaller by waiting — the records get harder to obtain and the memories get thinner. The bands are published, and the review carries no obligation.