What is catch-up bookkeeping?
Catch-up bookkeeping is a one-time project that records and reconciles months or years of transactions that were never entered. The goal is a set of books where every bank, card and loan balance agrees with the statement and every period can be reported on. It ends when the backlog is current and reconciled, usually followed by ongoing monthly bookkeeping.
What we handle for manufacturers and wholesalers
- Opening inventory established from the last reliable count and system history
- Back-period receipts costed with freight and duty allocated
- Work orders and shipments posted to the periods they belong to
- Exempt-sales schedules with certificate references rebuilt per period
- Inventory reconciled to the ledger at each month-end before moving on
The KPI that matters here
Each back month reconciled, including inventory, before the next month starts.
Manufacturing compliance notes
Sales-tax exemption certificates
Resale certificates, manufacturing machinery and equipment exemptions and direct-pay permits each exempt a sale only when a valid certificate is on file at the time of sale or obtained within the state's grace period. We collect certificates at customer setup, store them against the customer record, track expiry dates and produce an exempt-sales report with certificate references for every period. Your preparer or Avalara files the return; we prepare the workings.
Cost of goods sold and inventory valuation
Inventory must be valued on a consistent method, whether FIFO, weighted average or standard cost with variances, and cost of goods sold must include the costs your CPA determines are inventoriable under IRS §471 and, above the gross-receipts threshold, §263A. We apply the method your CPA sets, reconcile the inventory system to the ledger monthly and document every adjustment, so year-end is a review rather than a rebuild.
Landed cost and import duty
Customs duty, tariffs, freight, insurance and brokerage on inbound goods are part of inventory cost and reach expense only when the goods are sold. We allocate these costs to receipts in Cin7, NetSuite or your ERP and post the same allocation in the ledger, so margin by product reflects what the goods actually cost to put on the shelf.
Multi-state nexus for wholesalers
A wholesaler with customers across states may have economic nexus in states where it makes no taxable sales, and still owe registration and returns to report exempt sales. We track sales by ship-to state and flag thresholds so you and your advisor can register where required. We do not give tax advice; we supply the numbers.
Manufacturing software we work in
- QuickBooks Online
- Sage Intacct
- Sage 50
- NetSuite
- Xero
- Bill.com
- Avalara
- Cin7
- Katana
- Fishbowl
- All 50 platforms
More for manufacturers and wholesalers
Other services for manufacturing
Catch-up bookkeeping in other industries
Frequently asked questions
How long does catch-up take for an inventory business?
Longer than for a service business, because inventory has to be reconstructed period by period. A 12-month backlog with a few hundred SKUs is typically several weeks of dedicated work; market benchmarks for catch-up run $200 to $500 per back month (John Galt Finance), scaled for inventory complexity. We quote after reviewing your inventory system history and bank access.
Can you rebuild inventory if purchases were expensed and no counts exist?
Partly. We can capitalize purchases and allocate landed cost from invoices, and use current quantities to work back to an opening balance, but months without counts carry an estimated margin and we say so in the notes. Your CPA decides how to treat the correction for tax. Once current, the outsourced bookkeeping service for manufacturers & wholesalers keeps it reconciled.
Will catch-up include sales-tax exemption documentation?
Yes, for each back period we prepare a schedule of exempt sales with the customer, invoice and certificate on file, and list customers where no valid certificate exists so you can collect one. If a state audit is already open, the schedule is built to answer the auditor's request first. We prepare the workings; your preparer handles any amended returns.
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