Year-end bookkeeping means reconciling every account through the last day of the year, clearing errors, reviewing balances and contractor records, running final reports and giving your tax professional organized records.
1Step 1: Reconcile through year-end
Reconcile every bank, credit card and loan account through December 31. Fix differences before moving on.
2Step 2: Clean up categories
Clear uncategorized items and review large expense categories for mistakes. Move transactions to the right accounts.
3Step 3: Review balances
Check customer balances, vendor balances and loans against statements. Remove errors and flag items you are unsure about.
4Step 4: Check contractor records
Confirm that you have a W-9 for each contractor and that payments are recorded under the right vendor. The IRS or CRA rules on reporting and thresholds can change, so check the current instructions or ask your tax professional.
5Step 5: Review payroll
Compare payroll reports to the books and confirm that payroll tax payments are recorded.
6Step 6: Run the final reports
Create the year-end profit and loss and balance sheet. Review them for anything that looks off.
7Step 7: Send records to your tax professional
- Final reports
- Statements for all accounts
- Loan and payroll summaries
- Contractor totals
- Notes on unusual items
Ask your tax professional what format and deadline they prefer.
8Step 8: Lock the year
Lock the period so the closed year does not change by accident.
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