Make your year end smoother, stress-free, and set up for success

As the year wraps up, this is the perfect time to get your books organized and make smart tax moves that can save you money and help you start the new year confidently. Here are the top things every small business owner should review before closing the books.

1. Get Your Books Caught Up and Accurate

Before you can plan for taxes, you need clean numbers.

✔ Reconcile all bank, credit card, and loan accounts: Make sure every account matches your statements through December 31.

✔ Categorize all income and expenses: If you're unsure about an expense, now is the time to clean it up (not in March).

✔ Match deposits to actual customer payments: Avoid the #1 mistake we see: deposits that get double-counted.

✔ Review Accounts Payable and Accounts Receivable: Follow up on open invoices, write off uncollectible amounts, and enter any unpaid bills.

2. Prepare for 1099s (And Avoid Penalties!)

If you paid contractors, landlords, attorneys, or service providers during the year, you may be required to issue 1099s - and January deadlines come fast.

✔ Confirm who needs a 1099: Collect W-9s now (not January 31 when it’s too late).

✔ Check totals for contractors: Did you pay more than $600? Include cash, checks, Venmo, and Zelle.

✔ Look out for surprises: Rent, legal fees, and unincorporated service providers often get missed.

3. Review Payroll and Employee Records

Payroll mistakes can create big headaches.

✔ Verify employee info in your payroll system: Addresses, SSNs, and W-4 updates.

✔ Review year-to-date payroll totals: Check for proper expense categorization, owner wages (if applicable), and any taxable fringe benefits.

✔ Double-check retirement plan contributions: Make sure employer matches or safe-harbor contributions are recorded properly.

4. Evaluate Your Tax Strategy Before December 31

A little planning now can save thousands.

✔ Consider year-end purchases: Equipment, computers, and tools may qualify for Section 179 or bonus depreciation.

✔ Delay or accelerate income (when appropriate): Cash-basis businesses have flexibility here, but do it strategically.

✔ Review estimated taxes: Are you on track, or do you need a final Q4 payment?

✔ Max out retirement contributions: Did you know-even small employer plans may allow contributions into early next year for this tax year?

5. Clean Up Your Balance Sheet

Don't skip this step! It's where most errors hide.

✔ Loans and credit lines: Check balances and interest allocations.

✔ Owner draws and contributions: Make sure they aren’t sitting in expense accounts.

✔ Inventory counts: If you hold stock, do a physical count and adjust to match reality.

6. Gather & Organize Key Documents

Having everything in one place can save hours later.

✔ Bank and credit card statements

✔ Payroll reports (941s, W-2 summaries)

✔ Loan statements

✔ Asset purchase receipts

✔ Mileage logs

✔ Any major changes (new partners, new entity, new locations)

A quick tip: save all documents as PDFs and upload them to a year-end folder in your bookkeeping system or Google Drive.

7. Plan for a Strong Start to the New Year

This is a great time to reset systems and build better habits.

✔ Schedule quarterly or monthly bookkeeping check-ins: Future-you will thank present-you.

✔ Review your pricing and profitability: Are your margins still where they should be?

✔ Update your chart of accounts: Remove clutter. Add accounts that match your real-life needs.

✔ Set financial goals for the year: Revenue, cash flow, debt payoff, and savings targets.