Bookkeeping

Bookkeeping is the daily record of where your business money came from and where it went. Done well, it tells you what you earned this month, who owes you, what you owe, and what the tax return will say, without a scramble in March. Done poorly, it turns every tax season, loan application and notice into a reconstruction project. Our bookkeeping service covers ongoing monthly work and catch-up cleanup for small businesses, professional practices, landlords and self-employed people in Naperville, Aurora, Chicagoland and across the country.

What monthly bookkeeping includes

• Recording and categorizing income and expenses from bank, credit card and payment-processor accounts.
• Reconciling every account to its statement, so the books agree with the bank.
• Tracking customer invoices (accounts receivable) and vendor bills (accounts payable).
• Recording payroll from your payroll reports, and tracking payroll tax liabilities.
• Recording loans, owner contributions and owner draws correctly, so that they are not mistaken for income or expense.
• Tracking sales tax collected and paid, where it applies.
• Collecting Forms W-9 and tracking payments to contractors for year-end 1099 reporting.
• Monthly reports: profit and loss, balance sheet and an explanation of unusual items.

The SBA's guidance for small businesses lists the same core jobs: managing receivables and payables, watching available cash, reconciling bank accounts and handling payroll. Whether those are done in-house, by a bookkeeper or by a CPA, someone has to own them.

Catch-up and cleanup

Many clients come to us with books that are months or years behind, or that were set up in a way that no longer works. A cleanup starts with the bank and card statements, not with the old file. We rebuild the transaction history, categorize it consistently, reconcile every account to its statements, and review the balance sheet for items that do not make sense, such as a negative cash balance or an unexplained loan. If the cleanup finds errors that affected earlier tax returns, we tell you and discuss whether amended returns are needed. See amended returns.

Cash or accrual

Under the cash method, income is generally reported in the year received and expenses in the year paid. Under the accrual method, income counts in the year earned and expenses in the year incurred, whether or not cash has changed hands. Some businesses must use accrual, including many with inventory, and the gross receipts threshold that decides it is adjusted for inflation. The method used for tax, the method used for your management reports and what your lender expects can differ, and a good bookkeeping setup accommodates all three. See cash vs accrual accounting and inventory and cost of goods sold.

Dates that bookkeeping feeds

The 2026 threshold for reporting contractor payments on Form 1099-NEC is $2,000, up from $600. The February 2027 date applies because January 31, 2027 falls on a Sunday. See Form 1099-NEC and 1099-K.

How an engagement works

1. Consultation. We review your business, systems, transaction volume and what you need from the books.
2. Written engagement agreement defining the accounts and months covered, the reports, the schedule and how fees are determined. Work begins only after you sign.
3. Setup and document collection. We set up or review the chart of accounts, request read-only access or statements for each account, and collect invoices, loan documents and payroll reports.
4. Monthly work or cleanup. We categorize and reconcile, and ask you about anything we cannot classify from the documents.
5. Review and delivery: the month's reports with a brief explanation of unusual items.
6. Follow-up. At year-end we close the year, tie the books to payroll and sales tax filings, and send the package to the tax preparer, which is often us.

You provide account access or monthly statements, support for unclear transactions, loan statements, payroll reports and a list of owners and how each is paid. Keeping personal spending out of business accounts makes everything faster.

Common problems we fix

• Business and personal spending in the same accounts.
• Loans recorded as income and owner draws recorded as expenses.
• Bank balances that do not match the books because reconciliations stopped months ago.
• Payroll liabilities that do not agree with the payroll reports.
• Missing contractor information at year-end, so Forms 1099-NEC are late.
• Deposits from a payment processor recorded gross in one place and net in another, which makes income look wrong.
• Records that cannot be produced when a notice or audit arrives. The IRS says to keep records as long as they are needed to prove income or deductions. See how long to keep tax records.

How we can help

Bookkeeping at our firm connects directly to tax preparation, payroll and accounting and financial statements, so the numbers you see in March are the numbers you have watched all year. We work in common cloud accounting software and can usually keep the system you already use. We serve Naperville and Aurora in person and clients in every state remotely. Contact us to talk about your books.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.