End of the Year Checklist for Small Business Owners

Checklist for the End of Your Small Business' Fiscal Year



Happy New Year! Now that that holidays are over, it’s time to get serious about closing your books and getting ready for a successful new year. Here are 9 checklist items for the small business owner to complete at year-end.

1. Finish Your Bookkeeping and Reconcile Your Accounts

The first step to closing out your books is to make sure all of your financial transactions for the year have been entered into your accounting software (QuickBooks, Xero, Accounting Seed). Next you want to make sure your bank and credit card accounts have been reconciled. Bank feeds typically make this a quick and easy job. However, you would be surprised how often bank feeds skip or duplicate transactions. Reconciling ensures all of your bank transactions have been accounted for.

2. Review Your Financials and Scan For “Wacky” Looking Accounts

Generate a year-end Profit and Loss (P&L) and Balance Sheet using your bookkeeping software. Look through the accounts and balances. Does anything look “wacky?” Do your bank account balances make sense? Are your large purchases showing up as a fixed assets (think vehicles, equipment, real estate)? Are there accounts that show a negative balance that should be positive? Are there strange accounts (“uncategorized asset” is a common one we see)?

3. Clean Up Your A/R and A/P

Pull an aging Accounts Receivable (A/R) report. Do you have customers who have credits that need to be applied to their accounts? Are there customers with open balances of $0.45, that can be written off? Do you have old receivables from customers who will never pay?

Let’s do the same review with your aging Accounts Payable (A/P) report. Are there vendors who show a balance, but are paid in full? Are there open credit memos that need to be applied against open bills? Clean up your vendor accounts and make sure the balances are accurate.

4. Take Inventory

This is never a fun task for product based businesses, but it’s important to take an inventory count at the end of each year. Compare your actual inventory against the amounts reported on your financial statements and make the necessary adjustments. Do you have old inventory on hand that you’re no longer able to sell? Let’s get that written off the books. Do you have excess inventory you’re having troubles selling? Perhaps it’s a good time to run a sale to move this old inventory and make room for new and improved inventory in the new year.

5. Schedule a Meeting with Your CPA to Review Your Financials

Ideally, you’ll want to do this before the end of the year. However, January can be a great time to review your financials with your CPA and make any adjustments before tax season begins. Any adjustments you and/or your bookkeeper can make now will save you money on your tax prep fees.

6. Send 1099’s

Don’t forget to send out 1099’s to your vendors and subcontractors. 1099’s are required to be sent to vendors, independent contractors, and the IRS by January 31st. QuickBooks and Xero make it super simple to prepare and send 1099’s directly for the bookkeeping software.

7. Print Accounting Reports for Your Records

After your books are in order, it’s important to print and/or save to a PDF several important financial reports for your records. All businesses need records for audit history. It’s also beneficial if you simply change accounting software in the future. A few reports I recommend saving are Profit & Loss (P&L), Balance Sheet, detailed General Ledger report, A/R aging details report, A/P aging details report, ending inventory balances, stock holder details, receipts, 1099’s, and all quarterly/annual payroll reports. Depending on your specific business, there are probably additional reports you’ll want to save from your bookkeeping software. This is a great topic to review with your accountant.

8. Budget and Forecast For Your New Year Goals

Create a budget and cash flow forecast to help you plan out the new year. Do you have growth goals? It’s important to know how this will affect your sales, expenses, and cash flow. Mapping out a plan will help you measure your progress throughout the year, so you can make meaningful adjustments. It’s also a great tool to help you avoid cash flow surprises.

9. Is it Time To Hire a Bookkeeper or Controller?

Have you reached the point where you can no longer keep up with your monthly bookkeeping? Perhaps it’s getting more complicated and you and your business would benefit greatly with regular financial guidance. It might be time to look at outsourcing your bookkeeping and or bringing on a virtual CFO. These are great options for businesses owners who spend about 5-10 hours a week on their bookkeeping. The best news is that our QuickBooks Bookkeepers and virtual CFO’s can take care of this checklist for you! Phew, how much time would that save you??



Hopefully this checklist helps you enjoy a painless year-end and lets you quickly get back to focusing on your business goals. Wishing all of my small business owner friends a successful new year!