Year-End Bookkeeping Checklist

If you’re anything like me, you love lists. They keep me organized so I thought I’d share one that can help the small business owner stay organized during this hectic tax season: the year-end checklist. This list covers what is necessary for a small business owner or a bookkeeper to close out year-end.

So what does it mean to “close out year-end?” It is accounting jargin for making sure your books within the 12 month fiscal year are balanced. This year-end checklist will layout the process that will ensure that your books are balanced and nothing is missed.

1. Review payroll

   If you are a small business with payroll, you’ll want to review the following:

   • Employee benefits

   • Deferred compensation

   • Employee information

   • Employee wages and edeductions

   • If all paychecks have been reported

   • Raises and bonuses

   • Time-off balances

   • Withheld tax amounts

   Once you can confirm that the items listed above are accurate, you can run a final payroll report. Be sure to submit your Form 941 and FICA taxes as well.

   If you are a small business with no employees, you can skip this step.

2. Handle employee and contractor forms

   Payroll is one of the largest expenses a small business has so it is important to account for it at year-end. The two forms that you will need to prepare for your contractors and employees are W-2s and 1099s.

   For an employee, you’ll need to file copies of Form W-2, a Wage and Tax Statement, and a Form W-3 by January 31 for each employee.

   For a contractor, you’ll need to fill out a Form 1099. Accounting for contractors at year-end is a process called a 1099 review. I plan on doing a later post on this, but the basic principals are as follows: analyze your profit and loss for contractor payment, review which contractors were paid over $600 within the fiscal year, collect W-9s from contractors, fill out 1099s, and send the Form 1099 to each contractor by the end of January. Since this can be an overwhelming process at year-end for most small business owners, a 1099 review is included in my monthly bookkeeping package at year-end. This process can be overwhelming so if you just don’t have the time or energy don’t worry - I do! Click the button below and let’s connect!

3. Take inventory

   A year-end inventory count is always a good idea. A quarterly is an even better idea. A monthly inventory count is the greatest idea! Since most business owners don’t have the time to do a monthly or even quarterly inventory count, a year-end count is usually what is the most practical. What you’ll want to do is take a physical count of your whole inventory and match it to what is on your balance sheet. If there are discrepancies, you’ll want to adjust it. A bookkeeper can also help with this at year-end or as needed throughout the year.

4. Organize your receipts

   This task may not apply to you since we live in a digital age and most businesses have online accounts where they can look up a record of their payments online. However, if you still keep paper records, you’ll want to get these organized at year-end. The best way to organize them is by type of expense and then chronologically by date. My biggest tip would be to scan your receipts into a digital system so they’re all in one place and can’t get lost.

   Please note that J Ricketts Bookkeeping is a paperless business. This supports our mission to cut down on paper waste to better serve the environment. Need your receipts organized? No problem! We will organize your receipts into a digital system - just click the button below to connect.

5. Review your payables and receivables

   If your business runs on an accrual basis, you’ll want to review, and even clean up, what you owe to your vendors and what is owed to you by customers. This will give your financial position for the year and gives you a chance to settle any open balances that you may have.

   Depending on the state and type of business, you may not even have to worry about paying taxes on any accrued amounts so completing this task may just be a good practice that benefits the health of your business.

   Managing your payables and receivables on a monthly basis is even better for your business. JRB includes this service in their monthly bookkeeping package as well!

6. Review your books

   This may seem like an obvious task, but it is by far the most time consuming one. You’ll want to make sure your balance sheet and your income statement are immaculate. This means recording all of the necessary journal entries, reconciling bank accounts and credit card accounts, reviewing you profit and loss, and reviewing you balance sheet.

   This is what a good bookkeeper does on a monthly basis, but a year-end review is always a little more intricate and time consuming.

And there you have it - your small business’s year-end bookkeeping checklist! Aside from the fact that you will be better off this tax season by completing this checklist, I would encourage you to use your financials to plan for the new year! Make the new year a year of achieving goals, scaling your business, and setting even bigger goals by utilizing all of the hard work that you (or your bookkeeper) put into your books at year-end!

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Meet Jocelyn

Hi! I am the bookkeeper behind J Ricketts Bookkeeping, LLC. Based in Monroe, GA, I get to enjoy working remotely and growing my virtual bookkeeping business. By working with a virtual CPA firm for years as an office manager and bookkeeper, I can say that I have found what I love to do - BOOKKEEPING! I am a certified QuickBooks Online ProAdvisor with bookkeeping experience in a extensive variety of industries while specializing in e-commerce and service industries.