Year-End Accounting Checklist: 10 Essential Tips for Small Business Owners

As the year comes to a close, small business owners have a lot to juggle. Among all the chaos of holiday sales, year-end deadlines, and planning for the new year, your accounting practices shouldn’t be overlooked. This checklist will help you organize your finances and set the stage for success in the New Year!

Always and we mean ALWAYS check-in with your accountant and tax professional so you are gathering and organizing your information in the proper way suited for you and your business.

10 Year-End Accounting Tasks for Small Businesses

1. Review and Reconcile Accounts

   • Check your bank, credit card, and merchant processing statements against your books to ensure everything matches. Identify and correct discrepancies before year-end.

2. Organize Financial Records

   • Gather and categorize receipts, invoices, and expense reports. These documents will streamline tax preparation and compliance.

3. Back-Up Financial Data

   • Save all your accounting records in multiple formats (cloud storage, external drives) to avoid data loss.

4. Assess Year-End Tax Deductions

   • Discuss with your financial team to identify business expenses that qualify for tax deductions, such as new equipment, professional memberships, or charitable contributions.

5. Review Employee and Contractor Payments

   • Make sure all payments are accurately recorded. Verify with your financial team that you’ve issued or will issue W-2s for employees and 1099s for contractors.

6. Conduct an Inventory Check

   • If your business holds inventory, conduct a physical count and adjust your books accordingly.

7. Evaluate Profit and Loss Statements

   • Compare this year’s financial performance with previous years. Pinpoint trends, identify strengths, and recognize areas for improvement.

8. Forecast Cash Flow for Q1

   • Use year-end financial data to create a cash flow projection for the first quarter of the new year. This will help you plan for upcoming expenses and investments.

9. Meet with Your Accountant or Tax Professional

   • Schedule a consultation to ensure your business is tax-compliant and to explore opportunities for tax savings.

10. Plan for the New Year

    • Set financial goals and create a budget for the new year. Use insights from your accounting data to align your business strategies.

Closing out your financial year doesn’t have to be stressful. In fact, the earlier you start the easier this becomes. By taking proactive steps now, you can minimize surprises and set your business up for a strong start.

Tip: Try to schedule and perform a monthly close-out so this process takes care of itself as it happens all year long.