Year-End Accounting Checklist
As the year winds down, business owners have an opportunity to not only close the books but also set the stage for a more profitable, organized year ahead. Year-end accounting may feel overwhelming, but with a clear checklist and a little planning, you can wrap up this year’s finances with confidence and walk into January prepared.
Here’s your go-to guide for closing out the year and laying the groundwork for a strong financial start next year.
1. Reconcile All Accounts
Make sure your bank, credit card, and loan accounts are fully reconciled. This ensures your books match your actual financial activity and helps catch any missed or incorrect transactions.
Tip: Use your accounting software’s reconciliation tools or work with an Accounting Advisor to double-check your records.
2. Record All Income and Expenses
Ensure all revenue and business expenses are accurately entered and categorized. If you have outstanding invoices or bills, get them posted before year-end.
Don’t forget to:
- Track any year-end purchases
- Log home office or mileage expenses
- Include any income received but not yet deposited
3. Review Accounts Receivable and Payable
Check who still owes you money and what bills you haven’t paid. You want to avoid leaving unpaid invoices on your books or forgetting to collect income that’s due.
Action Steps:
- Send final reminders to customers with overdue invoices
- Pay outstanding bills or schedule them for early January, depending on your tax strategy
4. Take Inventory (If Applicable)
If your business sells products, perform a year-end inventory count. This helps you update your cost of goods sold (COGS) and adjust for any shrinkage or spoilage.
5. Review Payroll and Contractor Payments
Make sure payroll is up to date, and verify payments to contractors. This will make preparing W-2s and 1099s easier in January.
Tip: If you paid a contractor $600 or more, you’ll likely need to issue a 1099-NEC.
6. Back Up Your Financial Data
Whether you use cloud software or spreadsheets, now is a good time to save a year-end copy of your financial records. Backups provide peace of mind and are helpful if you ever face an audit or tech issue.
7. Review Your Financial Reports
Look at your profit and loss statement, balance sheet, and cash flow statement. What story do the numbers tell? Are there areas you can improve next year?
Questions to Ask:
- Did revenue meet your expectations?
- Were there any surprise expenses?
- How strong is your cash position going into Q1?
8. Meet With Your Accounting Advisor
A year-end review with your Accounting Advisor can help you:
- Plan for taxes
- Identify deductions and credits
- Set goals for next year
- Prepare a budget or cash flow forecast
- Decide if it’s time to switch accounting methods, systems, or entity types
9. Close the Books
Once everything is reconciled and reviewed, lock the books for the year. This helps prevent accidental changes after final reports are filed.
Tip: Set user permissions in your accounting software to avoid unintentional edits.
10. Set Financial Goals for the New Year
Now that you’ve got a clear picture of your current standing, use it to guide next year’s strategy. Set measurable financial goals, such as increasing revenue, reducing expenses, or improving cash flow management.
Final Thoughts
Year-end accounting isn’t just about filing taxes—it’s about understanding where your business stands and how to make it stronger in the months ahead. By closing your books properly and working with your Accounting Advisor, you’ll start the new year focused, organized, and ready for growth.
Need help wrapping up the year? Reach out to your Accounting Advisor and make sure nothing gets missed before the calendar turns.
Article by:
Karla Equevilley
Accounting Advisor
