This is more common than anyone admits. The business ran, money came in and went out, and the bookkeeping never happened. Now a return is due, or a lender has asked for a Profit and Loss, and the shoebox is actually a browser full of PDFs. The good news is that the year is recoverable, because a business that ran its money through bank and card accounts left a complete record behind. This guide is about turning that record into what the preparer needs, with the least wasted motion.
What a preparer needs from you
Not receipts. Not a shoebox. For a cash-basis small business, a preparer needs three things:
- A Profit and Loss for the year, by category, so each category can be placed on the return: Schedule C for a sole proprietor or single-member LLC, Form 1065 for a partnership, 1120-S or 1120 for a corporation.
- A year-end Balance Sheet, at least for partnerships and corporations, and a useful sanity check for everyone else: what the business had, owed, and what you took out.
- A list of who you paid for services, so the preparer can decide who needs a Form 1099.
Everything else, depreciation, home office, vehicle mileage, estimated payments, is the preparer’s territory and is added to those three.
Where the record is
Sign in to each bank and card account the business used and download the monthly statements as PDFs for the whole year. Most banks keep at least a year or two of statements online and some keep seven; if a month is gone from the website, the bank can usually produce it on request, sometimes for a fee. Do this for every account: checking, savings, each card, any loan. A year is twelve statements per account, and a card whose cycle crosses December 31 needs the January statement too.
What to do about cash
Cash sales that were never deposited, and cash expenses that were never reimbursed from the account, are not on any statement, and no reconstruction from statements will find them. Write them down from whatever you have: a receipt book, a point-of-sale report, a calendar. They go to the preparer as a separate list. Everything that touched an account, which for most businesses is nearly everything, is on the statements.
Putting the year back together
The manual method is in how to make a Profit and Loss from bank statements: list every transaction, prove each statement against its balances, pull out transfers and owner draws, categorize the rest. Budget an evening per account for a tidy year, more if the account mixed personal and business spending.
Rekonix Lite does the same job from the statements in a sitting: upload every statement, let it read and sort them, check the categories, and download the packet. The packet includes the Profit and Loss, the Balance Sheet, a worksheet mapping each category to the line on your return, the 1099 candidate list, and an Excel file of every transaction, which is the form most preparers prefer anyway. The whole year is shown to you free before you pay; the download is $49.99.
If you are more than one year behind
Do the earliest year first. Each year is proved from its own statements, so balances are not carried from one year to the next; what carries forward is your work: the categories you set and the accounts you named are reused by the next year, and a preparer filing late returns wants them in order. In Rekonix Lite each further year of the same business bought together with another is $25, and the years come out as one packet with a column per year.
What to tell the preparer
That the statements are prepared on the cash basis from the bank and card statements, that transfers between accounts and owner draws have been separated out, and that every figure can be traced to a statement. That is the sentence that makes a preparer relax. Then let them do the tax part.