Year-End Bookkeeping Checklist

Do chilly weather, Christmas carols, and shorter days give you the warm nostalgia of year-end bookkeeping? If so, you are either an entrepreneur or part of a bookkeeping service! When done right, year-end bookkeeping is a deeply satisfying exercise in summarizing the past year, setting the final details in place, and closing the books forever. 

But if you are unprepared, year-end can feel chaotic, rushed, and stressful.

Here is our year-end bookkeeping checklist to help you complete your financial records with calm satisfaction.

How do you prepare year-end bookkeeping?

Follow these ten steps to prepare for your business’ year-end:

  1. Determine your deadlines. Some companies must report financials to their board or outside investors, while others only worry about tax filings. No matter your business, you will, at minimum, face these two deadlines:
    • 1099’s are due by 1/31. These reports are primarily for vendor expenses but also include interest paid, dividends, and option exercises.
    • Books are due to income tax preparer around February. Most income tax agencies request finances by early February to avoid filing extensions. 
  2. Plan your schedules. Monthly account reconciliations are commonly only performed on major GLs, like cash and credit cards. However, you need to reconcile every balance sheet account to a schedule for year-end. Print out a copy and, next to each account, write what schedule you will use. You may need to make a new schedule or blow the dust off an old one from last year.
  3. Get your mileage in. Business owners who use personal cars for business purposes (or vice-versa) need to report mileage at year-end to maximize tax deductions. Apps like MileIQ make this easy with fiscal year reporting.
  4. Ensure your transaction coding includes vendors. Accounting software like Quickbooks allows you to code transactions without vendors. That’s not best practice and could create problems during an audit or due diligence. Pull a report to examine all transactions without vendors and recode them. 
  5. Check personal credit cards for business expenses and vice versa. Amazon, Uber, and Expedia are common culprits for mixed business and personal expenses. Be sure to file expense or reimbursement reports before year-end to avoid commingling of funds.
  6. Check vendor files for W9s. You’ll need a W-9 for everyone you issue a 1099. If you do not have a W-9 on file for a vendor, email them and request one.
  7. Ask employees to update their mailing addresses or enroll in digital W2s if offered by your payroll service. 
  8. Prepare bonuses before 12/31 (or the end of your fiscal year). If your business files taxes on a cash basis, you should pay these in the prior year to accelerate the tax deductions. If you miss the 12/31 bonus deadline, you can pay a 401k profit share bonus after year-end and apply it to the prior year.
  9. Set aside one full day to perform year-end. Year-end is all about uninterrupted concentration, so working on a Saturday is a great idea. Take time to complete a ruler check, critically examine the profit and loss statement, and assess ways to improve your financial health.
  10. Celebrate another year complete! Once you are done preparing the financial records, have a beer and toast your colleagues on your business, completing another trip around the sun.

How professionals perform year-end

The best entrepreneurs know their limits and ask for help. If you are ready to explore how a part-time bookkeeping service can help you with year-end, schedule a consultation with CFOshare. Book today.

This article was written by a CFOshare employee with assistance from generative AI for rhetoric, grammar, and editing. The ideas presented are a combination of the author’s expertise, original ideas, and industry best practices.

Related Posts