As the year winds down, a little bookkeeping cleanup now can save a lot of stress (and money) later. Whether you DIY your books or work with a bookkeeper, year-end is the time to make sure everything is accurate, complete, and ready for tax season.
Here’s a practical guide to what to review, important deadlines to keep in mind, and how to make your Tax CPA’s job – and your tax prep – much smoother.
1. Reconcile Your Financial Accounts
Make sure all accounts are reconciled through the most recent statement:
- Business checking & savings accounts
- Credit cards
- Payment processors (Stripe, PayPal, Square)
- Loans or lines of credit
Why this matters
Reconciliations confirm that what’s in your books actually matches real life. Unreconciled accounts are one of the biggest reasons tax prep gets delayed (or becomes expensive).
2. Review Income for Accuracy
Run a full-year Profit & Loss report and scan for anything unusual, such as missing or duplicated income or owner contributions accidentally recorded as income.
Confirm fees from payment processors are categorized separately (not reducing income) and clean up any lingering uncategorized transactions.
3. Clean Up Expenses & Categories
Review expenses for accurate categorization.
Double-check:
- Personal expenses accidentally run through the business (these should be categorized as Owner draws)
- Business expenses you may have paid for using a personal bank account
- Uncategorized transactions
This is also a great time to review software subscriptions and recurring expenses to ensure they still add value to your business.
4. Confirm Owner Activity
Owner draws, contributions, and payroll should be clearly and correctly recorded. This is one of the most common issues CPAs flag – and one of the easiest to fix before year-end.
5. Inventory & Fixed Assets
If your business has inventory or larger asset purchases:
- Perform a year-end inventory count and make sure the inventory value on hand matches what’s in your books
- Review large purchases (equipment, computers, furniture)
Your Tax CPA may depreciate certain assets, but they first need them recorded correctly.
6. Payroll & Sales Tax Check
Before closing the year:
- Confirm all payroll runs are recorded correctly
- Verify payroll tax payments match your reports
- Reconcile sales tax collected and paid
Any discrepancies should be corrected before sending W-2s to employees and before handing things off to your Tax CPA.
7. 1099 Prep: Start Early
If you paid independent contractors during the year:
- Identify vendors paid $600 or more
- Make sure they’re marked as 1099-eligible
- Collect missing W-9s now. (Pro tip! Collect a W-9 from any new contractor during the year before you ever pay them.)
1099s must be filed and sent by January 31, so early preparation is key.
8. Get Ready for Your Tax CPA
Having these reports ready will streamline tax prep:
- Profit & Loss
- Balance Sheet (as of December 31)
- General Ledger
- Bank and credit card reconciliations
- Payroll and 1099 summaries
Clean books mean fewer questions, faster filings, and better tax planning.
9. Now Is the Perfect Time to Plan for Next Year
Year-end isn’t just about closing the books – it’s an invitation to be more intentional with how your business runs. This is an ideal time to reflect on the year and refine what comes next. Consider improving workflows, automating repetitive tasks, and fine-tuning processes that felt inefficient or draining. Small, intentional changes now can bring more ease, clarity, and confidence all the new year long.
Final Thoughts: Don’t Wait Until January
Ideally, ongoing bookkeeping should be done throughout the year, month in and month out. Instead of thinking about year-end bookkeeping, think of it as month-end bookkeeping. When your books are kept up to date each month, the end of the year is just one final month to wrap it all up with ready-to-go numbers for your tax CPA. No surprises. No panic.
How Willmes Accounting Can Help
At Willmes Accounting, we can help you keep your books up to date, so that you can go into year-end feeling supported and confident. From year-end cleanups and 1099 preparation to ongoing QuickBooks Online bookkeeping, our work is designed to feel seamless, thoughtful, and stress-free. If you’d like help wrapping up your books or preparing everything for your Tax CPA, we’d love to support you.
