As the year comes to a close, it’s the perfect time for business owners to review their books and make sure everything is in order. Year-end bookkeeping is not just about wrapping things up. It helps you stay compliant, prepare for tax season, and start the new year with clear financial records.
Skipping or rushing this process can lead to errors, missed deductions, and unnecessary stress later. Below are the most important year-end bookkeeping tasks every US small business should complete before the year ends.
1. Reconcile All Bank and Credit Card Accounts
One of the most important year-end tasks is reconciling your bank and credit card statements.
This means making sure:
- Every transaction in your accounting software matches your bank and credit card statements
- There are no missing or duplicate entries
- Any discrepancies are reviewed and corrected
Accurate reconciliations help ensure your financial reports are reliable. They also make tax filing much easier and reduce the risk of issues if your business is ever reviewed or audited.
2. Review Income and Expenses Carefully
Take time to review all income and expense categories for the year.
Look for:
- Expenses that may be categorized incorrectly
- Personal expenses that were accidentally recorded as business expenses
- Missing receipts or unclear transactions
This step helps keep your financial statements accurate and ensures your deductions are valid. In the US, proper expense classification is important for tax reporting and compliance with IRS guidelines.
3. Organize and Store Receipts and Documents
The IRS generally recommends keeping financial records for at least three years, and in some cases longer.
Before year-end:
- Make sure receipts are uploaded and attached to transactions
- Store digital copies of invoices, bills, and statements
- Organize documents so they are easy to access if needed
Using digital recordkeeping makes this process easier and helps protect your business in case documents are requested later.
4. Review Accounts Receivable and Accounts Payable
Check what money is still owed to you and what you still owe others.
For accounts receivable:
- Follow up on unpaid invoices
- Decide if any balances are uncollectible and should be written off
For accounts payable:
- Make sure all vendor bills are recorded
- Confirm nothing has been missed
This gives you a clear picture of your cash flow and helps you make better decisions going into the new year.
5. Check Payroll and Contractor Records
If you have employees or contractors, year-end review is critical.
Make sure:
- Payroll records are accurate
- Wages, taxes, and benefits are properly recorded
- Contractor payments are correctly tracked for 1099 reporting
In the US, Form W-2 and Form 1099-NEC preparation depends on accurate bookkeeping throughout the year. Fixing errors now helps avoid filing issues in January.
6. Review Sales Tax and Other Tax Liabilities
If your business collects sales tax or owes other state or federal taxes, review these accounts carefully.
Confirm:
- Sales tax collected matches what was reported and paid
- Payroll tax liabilities are accurate
- Estimated tax payments are properly recorded
Catching issues before year-end can prevent penalties and interest later.
7. Update Fixed Assets and Depreciation
If you purchased equipment, vehicles, or other major assets during the year, make sure they are recorded correctly.
This includes:
- Adding new assets to your books
- Removing assets that were sold or disposed of
- Reviewing depreciation schedules if applicable
Accurate asset records help your tax professional calculate depreciation correctly and ensure compliance with tax rules.
8. Run Year-End Financial Reports
Before closing the year, generate key financial reports such as:
- Profit and Loss Statement
- Balance Sheet
- Cash Flow Statement
These reports help you:
- Understand how your business performed during the year
- Spot trends or problem areas
- Plan for the upcoming year with confidence
Reliable reports depend on clean bookkeeping, which is why completing the steps above is so important.
9. Prepare for Tax Season Early
Year-end bookkeeping is the foundation for a smooth tax season.
When your books are up to date:
- Your tax preparer has accurate information
- Filing is faster and less stressful
- There is less risk of errors or delays
Even if your taxes are handled by a separate professional, clean books save time and money.
10. Get Professional Support if Needed
Many business owners try to rush year-end bookkeeping or leave it until tax time. This often creates more problems than it solves.
Working with a bookkeeping professional can help ensure:
- Your records are accurate and complete
- Compliance requirements are met
- You start the new year with confidence
How Accredited Bookkeeping Can Support Your Business
At Accredited Bookkeeping, we understand the challenges small businesses face when it comes to managing finances. We’re here to help you streamline your bookkeeping processes, avoid unnecessary financial errors, and gain greater clarity about your financial health. Our services are designed to fit the specific needs of your business, giving you peace of mind while you focus on growth.
Contact us today for a free consultation and discover how we can make bookkeeping easier for you.
marianne@accreditedbookkeeping.com
Marianne Kirwan
352-626-0116
