Bookkeeping
Your own money is a reportable transaction. Most books for foreign-owned companies miss that.
Bookkeeping for a US company owned from outside the US has one requirement ordinary bookkeeping does not: the money you put into your own company has to be tracked as a reportable transaction, because it goes on Form 5472 at year end.
Ordinary bookkeeping gets this wrong. Not through carelessness.
A domestic bookkeeper categorizes an owner transfer as equity and moves on. For a foreign-owned single-member LLC that same transfer is a reportable transaction between the company and its foreign related party, and it belongs on a form with a $25,000 penalty attached. Books kept without that distinction look clean all year and produce a return nobody can file correctly.
Three entries cause most of the damage. All three look harmless in a bank feed.
Three entries cause most of the damage, and all three look harmless in a bank feed.
| What happened | How it usually gets booked | What it actually is |
|---|---|---|
| You wire your own money in to cover costs | Booked as revenue, which inflates income and invents a tax problem | A capital contribution, and a reportable transaction with a foreign related party |
| You pay a state fee from your personal card | Left out entirely, because it never touched the business account | An owner-paid expense. It happened, the company benefited, and it is reportable |
| You take money back out | Booked as salary or as an expense | An owner draw against equity for a disregarded entity, and reportable in the other direction |
“We had no revenue” is not an answer
Which tier actually does the books. A person is one of them, not all three.
| Tier | Price | Who it fits | What you get |
|---|---|---|---|
| Starter | $39/mo | Solo founders with early revenue | Self-serve. You connect the bank feed and categorize. Prolify supplies the categories a foreign-owned entity needs, including the reportable ones. |
| Growth | $119/mo | Growing businesses past roughly $10k a month | The full software suite, with Stripe, Shopify and PayPal connected, plus quarterly tax prompts. Still your hands on the categorization. |
| Elite | $319/mo | Established companies that want it off their desk | Done for you by a dedicated bookkeeper. This is the only tier where a person does the categorizing rather than you. |
If what you want is somebody else doing your books, that is the Elite tier and nothing below it. The two tiers underneath give you the software and the categories; the work stays on your desk. Worth knowing before you pick one.
What it does, and what it does not. In the same table.
| Area | What Prolify does | What it does not do |
|---|---|---|
| Categorization | Supplies a chart of accounts built for a foreign-owned entity, with the reportable owner transactions separated from operating expenses. | Does not decide your tax position. Which transactions are reportable in your specific facts is a preparer's call. |
| Bank feeds | Connects bank, Stripe, Shopify and PayPal so the ledger builds from source data rather than from spreadsheets. | Does not reconcile accounts it cannot see. A provider you do not connect stays invisible to the books. |
| Reports | Produces the monthly statements and the year-end package a preparer asks for. | Does not file anything. |
| Catch-up | Reconstructs back months or years across every connected account. | Does not quote catch-up before seeing the volume, because that number would be invented. |
Questions founders ask. Answered in the open.
Do I get an actual human bookkeeper?
On Elite, yes, and only there. Starter is self-serve with a bank connection and Growth is the full software suite, both of which leave the categorizing with you. If a person doing your books is the thing you are buying, buy the tier that contains one.
What accounting method do you use?
Cash basis by default, which suits most small companies, switching to accrual where your situation calls for it. The method does not change what has to be tracked for Form 5472; that turns on who the counterparty is, not on when you recognize the entry.
What software is it, and do I keep access?
The books run in Prolify, and connected feeds come from your own bank and processor accounts, which stay yours. You are not locked into an account you cannot export.
Why does an owner transfer matter so much?
Because it is a transaction between the company and a foreign related party, which is exactly what Form 5472 reports. Book it as revenue and you overstate income; leave it out and the form is wrong. The penalty for filing that form incorrectly or not at all is $25,000.
I had no revenue last year. Do I need any of this?
Probably yes. A foreign-owned single-member LLC files a pro forma 1120 with Form 5472 attached regardless of income, and the transfers that fund a company with no customers are themselves reportable. A quiet year still produces a filing.
My books are a year behind. Is that recoverable?
Usually, and it is common. Catch-up runs off whatever the connected accounts can produce, priced on volume once someone has looked at it. Any figure quoted before that would be made up.
Start the books before the first transfer. Reconstructing a year is the expensive way.
Categories set up correctly on day one cost nothing extra. Rebuilding twelve months of them from bank statements does.