Bookkeeping Nightmare

(Canada)

I have a young man who started a construction business in November 2008, since that time he has not kept any books and has been paying for materials from his own bank account and credit card.

Any customer invoices that were paid to him were also deposited into his personal account and used for materials for jobs, office expenses etc. as well as personal use.

Any suggestions on how best to sort this out would be appreciated.

Hello,

Thank you for your question.

This actually happens more often than you would think when someone is first starting out with a new business.

What I suggest you do is to go through his bank statements from the time he started his business and start categorizing his personal vs. his business income and expenses.

You can do this by setting up a Microsoft Excel Spreadsheet with the different categories in each cell across the top. Then manually enter each business transaction under the correct column heading and total each column at the bottom.

Or, you can enter the bank account income and expense transactions in QuickBooks, again coding each transaction to the different account categories.

I highly recommend using QuickBooks Accounting Software as you can also perform monthly account reconciliations and reports much easier than with MS Excel. But either way will work just fine.

Best Wishes!