Catch-Up Accounting: Why It Matters and How to Do It Right

Bringing previous accounting periods up to date, often called catch-up accounting, is one of the most important tasks for any business that wants to ensure:
• financial data is accurate,
• reports and declarations are compliant,
• there are no hidden risks with tax authorities or audits.

Many companies focus solely on the current period, but uncorrected errors from prior periods can lead to serious issues such as improper VAT returns, incorrect payroll records, missing filings, and exposure to penalties.

In this article we’ll explain:
• what catch-up accounting is,
• when it’s needed,
• the main steps involved, and
• how Oceans supports businesses with this process.

What Is Catch-Up Accounting?

Catch-up accounting is the process of reviewing and correcting historical accounting entries so that:
• books match supporting documentation,
• errors or omissions are fixed,
• accounting data aligns with tax returns and statutory reports.

It’s not just about “fixing old numbers”, it’s about restoring confidence in your financials and making them audit-ready.

When Is It Needed?

Catch-up accounting is typically necessary when:
• accounts have not been reconciled regularly,
• returns were filed with mistakes or were not filed at all,
• payroll, fixed assets, or contract changes weren’t recorded correctly,
• the company is preparing for audit, financing, or sale.

For smaller businesses, this process is also critical for day-to-day business insight and decision-making - clean data helps you operate with confidence.

Main Steps in the Catch-Up Process

1. Initial Assessment
   • clarify scope and objectives,
   • review quality of existing records;
2. Document and Entry Review
   • verify invoices, bank statements, payroll details;
   • identify discrepancies;
3. Corrections and Reconciliations
   • adjust ledger accounts;
   • reconcile with tax returns;
4. Amended Declarations & Reporting
   • prepare and submit corrected declarations if needed;
   • ensure all reports are complete and compliant;
5. Documentation Improvements
   • tidy up file storage and workflows;
   • recommend processes to avoid repeat issues.

Why It Matters

• Reduces risk of penalties and interest: historical errors can trigger tax authority enquiries or sanctions.
• Improves financial transparency: accurate data helps with planning and performance monitoring.
• Smooths relationships with auditors, banks and investors: clean accounts build credibility.

How Oceans Can Help

At Oceans we offer:
• professional review of historical accounting entries,
• correction of errors and reconciliation with tax returns,
• preparation and submission of amended reports,
• payroll review and correction,
• support in communication with Latvian authorities.

Our goal is to protect your business from surprises and make sure your accounting is:
• accurate,
• up-to-date,
• fully compliant with Latvian regulations.

If your company has unresolved accounting issues from prior periods or you’re preparing for audit or financing, contact us - Oceans team will help you tidy up your books quickly and efficiently.

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