Year-End Bookkeeping Checklist to Close Out the Year Stress-Free
Most business owners wait until tax time to deal with their books. By then, it’s a scramble of missing receipts, miscategorized expenses, and guesswork. That rush costs money in extra tax prep fees and missed deductions.
A better plan is to clean up your books before the year ends so tax season becomes a simple hand-off instead of a panic attack.
This year-end bookkeeping checklist will help you wrap up clean, confident, and ready for a new year of growth.
Step 1. Reconcile All Bank and Credit Card Accounts
Match everything in your bookkeeping software to your bank and credit card statements.
This makes sure your reports are accurate and that no income or expenses are missing.
Look for:
• Duplicate transactions
• Missing deposits
• Incorrect categorization
Step 2. Review Outstanding Invoices and Bills
Unpaid invoices can distort your year-end numbers and create cash flow issues.
Ask yourself:
• Who still owes you money
• What bills are still due
• Which overdue invoices need follow-up
Collect what you can before December 31 so your books show a clear picture.
Step 3. Categorize Every Expense Correctly
Misplaced expenses mean missed deductions.
Review small recurring charges like:
• Software subscriptions
• Apps and tools
• Meals and travel
• Marketing and advertising
• Contractor payments
Accurate categories = accurate tax savings.
Step 4. Count Inventory if You Track It
If your business carries physical products, perform a year-end inventory count.
Compare:
• Quantity on your shelves
• Quantity shown in QuickBooks
Adjust differences so your Cost of Goods Sold and profit are calculated correctly.
Step 5. Confirm Payroll and Contractor Records
Payroll has big tax implications. Make sure all wages and taxes are entered correctly.
For contractors:
• Confirm W-9 forms are on file
• Verify payments over 600 dollars for 1099-NECs
This prevents January surprises.
Step 6. Update and Organize Your Receipts
Whether digital or paper, receipts support your deductions.
Check that your backup documents are stored and labeled so your accountant never has to chase you down.
Tools like QuickBooks, Hubdoc, or Google Drive make this easy.
Step 7. Review Your Profit and Loss Report
Look at your numbers month by month.
Do you see trends in:
• Rising expenses
• Seasonal revenue dips
• Increasing profit margins
This helps you make smarter plans for next year.
Step 8. Review Your Balance Sheet
Check that all assets and liabilities are accurate.
Pay attention to:
• Outstanding loans
• Equipment purchases
• Business credit card balances
• Owner draws or distributions
This report shows your financial strength heading into January.
Step 9. Set Aside Money for Taxes
If you made profit this year, set funds aside now so April isn’t painful.
General rule:
Save 20 to 30 percent of your taxable profit depending on your structure and state.
Step 10. Schedule a Meeting With Your Bookkeeper or Accountant
This is the perfect time to:
• Talk tax planning
• Discuss an S Corp election if you’ve grown
• Review your financial goals
• Fix anything that looks off
A quick review now can save hours and money later.
Start Next Year Fresh and Confident
Clean year-end books lead to:
• Accurate tax returns
• Faster filing
• Fewer compliance issues
• Better financial decisions
• Less stress and more confidence
If you want the peace of mind that comes with organized books, you don’t have to do it alone.
Red Leaf Bookkeeping can handle your year-end cleanup so you start January with clarity.