How to start books from scratch going back 2 years?

Starting Financial Records from Scratch for the Past Two Years

I recently took on the role of controller at a small company, where I discovered that the financial records were virtually non-existent. To address this, I have established a new QuickBooks Desktop account.

My plan is to begin by reconciling bank statements starting from February 2023. Do you have any advice or tips on how best to approach this task?

Thank you!

Starting the books from scratch for a small company can be a daunting task, but with a strategic approach, it’s definitely manageable. Here’s a detailed guide to help you set up accurate financial records using QuickBooks (QB) Desktop, starting with your intuition to begin with bank reconciliations:

Step-by-Step Process for Starting Books from Scratch

1. Understand the Current Situation

Review Records: Gather and review any existing financial records. This includes bank statements, invoices, receipts, tax documents, and previous financial reports, if available.
Identify Gaps: Determine what information is missing. This might include transactional data, vendor/customer lists, or previous balance sheets.

2. Set Up QuickBooks Desktop

Install & Configure: Make sure QuickBooks Desktop is properly installed and configured to match the company’s financial year and currency.
Chart of Accounts: Create or customize a chart of accounts that reflects the company’s financial activities. This will serve as the backbone of your Bookkeeping.

3. Bank Reconciliations

Start with Bank Recs: As you mentioned, starting with bank reconciliations is a great idea. This ensures that the cash position is accurately reflected and provides a reliable starting point for your Accounting records.
Collect Statements: Secure bank statements going back to February 2023. If possible, obtain both digital and hard copies for backup.
Enter Opening Balances: Input the opening balances in QuickBooks as of February 2023. Ensure these are as per your bank statement for that date.
Reconcile Monthly: Go through each month one-by-one, reconciling entries as per the statements and ensuring your QB bank register matches the bank’s records.

4. Input Historical Data

Backdate Transactions: Enter transactions starting from February 2023. Input all deposits, withdrawals, checks, and any other transactions.
Sales & Expenses: Log all customer invoices, receipts, and bill payments. This will help in generating accurate income statements.

5. Accounts Receivable and Payable

Invoices & Bills: Enter outstanding invoices from customers and bills from vendors as of the beginning date (February 2023).
A/R and A/P Aging: Generate aging reports to get a handle on what’s overdue and what needs immediate attention.

6. Generate Financial Statements

**Trial Balance &

One response

APAdmin

26 February 2025 at 3:01 PM
Starting the books from scratch for a small company can be a daunting task, but with a strategic approach, it’s definitely manageable. Here’s a detailed guide to help you set up accurate financial records using QuickBooks (QB) Desktop, starting with your intuition to begin with bank reconciliations:

Step-by-Step Process for Starting Books from Scratch

1. Understand the Current Situation
- Review Records: Gather and review any existing financial records. This includes bank statements, invoices, receipts, tax documents, and previous financial reports, if available.
- Identify Gaps: Determine what information is missing. This might include transactional data, vendor/customer lists, or previous balance sheets.
2. Set Up QuickBooks Desktop
- Install & Configure: Make sure QuickBooks Desktop is properly installed and configured to match the company’s financial year and currency.
- Chart of Accounts: Create or customize a chart of accounts that reflects the company’s financial activities. This will serve as the backbone of your Bookkeeping.
3. Bank Reconciliations
- Start with Bank Recs: As you mentioned, starting with bank reconciliations is a great idea. This ensures that the cash position is accurately reflected and provides a reliable starting point for your Accounting records.
- Collect Statements: Secure bank statements going back to February 2023. If possible, obtain both digital and hard copies for backup.
- Enter Opening Balances: Input the opening balances in QuickBooks as of February 2023. Ensure these are as per your bank statement for that date.
- Reconcile Monthly: Go through each month one-by-one, reconciling entries as per the statements and ensuring your QB bank register matches the bank’s records.
4. Input Historical Data
- Backdate Transactions: Enter transactions starting from February 2023. Input all deposits, withdrawals, checks, and any other transactions.
- Sales & Expenses: Log all customer invoices, receipts, and bill payments. This will help in generating accurate income statements.
5. Accounts Receivable and Payable
- Invoices & Bills: Enter outstanding invoices from customers and bills from vendors as of the beginning date (February 2023).
- A/R and A/P Aging: Generate aging reports to get a handle on what’s overdue and what needs immediate attention.
6. Generate Financial Statements
- **Trial Balance &
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