New Client, Missing Records: Rebuild or Replace the QuickBooks File?

Every so often a new client arrives with almost nothing usable. The person who handled the books before is gone, and the receipts and paperwork went with them. All that survives is the invoicing history in a field service app, and no formal set of books exists. The first question is practical: repair what exists, or open a new QuickBooks company file and start clean. A second question, whether the business itself should continue, is separate and belongs to the client and their accountant.

A new file changes the records, not the obligations

A QuickBooks company file is a record, not the business itself. Starting a new file cancels nothing: not unfiled GST/HST returns, not prior-year income, not amounts already owed. GST billed to customers was collected on the government’s behalf, and losing expense receipts affects the credits you can claim, not those billed amounts.

Winding the company down does not erase the obligations either. A new corporation is a separate taxpayer, and unremitted GST/HST can follow directors personally. Canadian rules also expect records to be kept, generally for six years, so paperwork that is stolen or destroyed does not end that duty. The decision to close or continue belongs to the client, their accountant, and, where needed, a lawyer.

Rebuild the existing file or start a clean one?

If a file exists with bank feeds connected, a workable chart of accounts, and history worth keeping, we would repair it. Abandoning data you may still need for filings rarely pays off.

When there is no formal set of books at all, there is nothing to save, and a new file with a clear start date is the honest choice. A middle path suits a young business: open a clean file at a firm cutoff date, then reconstruct earlier periods only as far as the filings require. A two-year history is far cheaper to rebuild than a ten-year one.

Sources that survive the paperwork loss

Missing receipts matter less than people fear, because most of the story lives elsewhere. Banks can reissue statements going back years, and the bank’s record of every deposit and payment becomes the backbone of the rebuild. Field service apps such as Jobber keep their own copy of every invoice and payment, and that history can be exported or synced into QuickBooks Online. Suppliers will generally resend account statements on request. The government business account shows what has already been filed, which sets the boundary for what is still outstanding.

Personal spending in the business account

Personal transactions, gambling included, get coded to an owner’s draw or shareholder loan account rather than to business expenses. The bank statement already proves the money left, so no receipt is needed to record the outflow. Classification is what keeps that spending out of profit, and that is what protects the client at tax time. Treatment is the accountant’s call; your job is to record it where it belongs.

A practical order of work

1. Secure the surviving sources first: bank statements, the invoicing export, supplier statements, and the filing history.
2. Choose the file strategy: repair the existing file, or start a new one at a firm cutoff date.
3. Reconstruct income from the invoices, and expenses from the statements, month by month.
4. Code personal spending to the owner’s account as you meet it.
5. Total the GST/HST billed and the credits claimable, so overdue returns can be prepared on real numbers.
6. Only then weigh whether the business continues, together with the client and their accountant.

Start with the two longest lists you can obtain: the bank statements and the invoice export. Every later decision, from GST totals to the stay-or-close question, gets easier once those are in hand. When the QuickBooks file itself is damaged, or history needs to move into a clean QuickBooks Online file, that reconstruction is work we do every week.