Restoring accounting records

Restoration is needed not when the books are “a little behind”, but when there is no answer to “show me how this figure in the return was arrived at”. The cause is usually one of three: the accountant left and took the ledger with them, the books were kept in-house and not finished, or they were never kept at all because “there was hardly any turnover”.

We take on periods like that and bring them to a state that holds up under inspection.

When it can no longer wait

• a request has arrived from the tax office and there is nothing to support what was declared;
• the accountant resigned, and the ledger and the passwords went with them;
• returns were filed by eye, with no records underneath them;
• you are planning a sale or bringing in an investor – the books are the first thing anyone will look at;
• a loan or a tender needs financial statements that will not currently add up;
• a business is closing, and it cannot close with periods left open.

How we do it

First, an inventory of what exists. We look at which documents survived, what the bank statements show, what was filed, and where the gap between them lies. The scale of the problem is visible at this step, and that is when we quote.

Then the source documents. Bank statements, duplicates from counterparties, reconciliation statements. Whatever cannot be recovered is recorded as such: better to know where the hole is than to assume there isn’t one.

Then the ledgers and the returns. We rebuild the accounting records, recalculate the tax period by period, and prepare amended returns where they are needed.

Finally, a starting point. You get closed periods, a summary of what was corrected, and a list of what can no longer be corrected, with the consequences explained.

On the limitation period

The tax office can examine a period within 1,095 days. That cuts both ways: while the period is still open, an error can be corrected voluntarily, with far smaller consequences than an assessment. Restoration started in time therefore costs less not only in fees but in tax.

What to do about the risks that surface

We do not file amended returns without your decision. First we show what was found, what correcting it voluntarily costs, and what it costs if the tax office finds it. Sometimes correcting at once is better; sometimes waiting for the limitation period to expire is. That is the owner’s call, and it should be made with the figures in hand.

What it costs

From UAH 2,300 – the exact figure depends on how many periods are involved, the volume of transactions and how much of the source documentation survives. We quote after the inventory and before the main work: naming a price without seeing the scale is meaningless.

Once restored, the books can be handed to us on the monthly service, so the situation does not repeat.

Common questions

Can records be restored without the source documents?

Partly. Bank statements give the movement of money, counterparties issue duplicates, and some of it can be reconstructed from what was filed. But anything a document does not support stays open, and we will say so plainly rather than bury it in the report.

How far back should restoration go?

Usually within 1,095 days – the tax office cannot look further. The exception is carried-forward losses and a negative VAT position running out of earlier periods.

Will you report the errors you find to the tax office?

No. The result is your internal document, and the decision on amended returns is yours.

How long does it take?

It depends on the number of periods and the state of the documents. We give the timescale together with the fee, after the inventory, and fix it in the contract.

How does this differ from an audit?

A tax audit checks what already exists and shows the discrepancies. Restoration is for when there is nothing to check: the records have to be built first.