Late in the year: review and plan
Pull the profit and loss for the year so far and compare it with last year and with your expectations. Large differences deserve an explanation now, while there is still time to act. Ask your preparer if any purchase or payment timing decisions should be made before the year ends, since the date can affect which year it belongs to.
Confirm that all vendors who might receive an information return have a W-9 on file. Chase missing ones in December rather than January.
Cutoff tasks right at year end
Count inventory if you hold any. Review unpaid invoices from customers and decide which, if any, are unlikely to be collected. Record bills received but not yet paid. Check for prepaid items that cover next year and for expenses incurred but not yet billed. Each of these affects which year gets the income or expense.
Photograph the vehicle odometer and record the final mileage. Save any year-end statements for loans and credit cards.
After year end: reconcile everything
Reconcile every bank, credit card, loan and payment processor account through December thirty-first. Resolve uncategorized and unusual items. Compare balance sheet accounts such as loans and sales tax payable to outside statements. Review the equity accounts to make sure owner transactions are labeled correctly.
If you run payroll, reconcile wages and tax liabilities to the filed quarterly returns before issuing wage statements.
Build the preparer package
Export the profit and loss, the balance sheet and the transaction detail, and add schedules for assets purchased, loans, mileage, home office information and sales by state if relevant. Write a cover note covering unusual events. See our guide on preparing records for a tax preparer for details.
Send everything in one organized upload and keep a copy. Ask when to expect questions.
Close and look ahead
After the preparer confirms the numbers, lock the books for the year so no one changes them by accident. Archive the year's files and set up the new year's folders. Review your chart of accounts and remove or merge categories that confuse. Set calendar dates for estimated tax payments, payroll filings and other deadlines.
A short meeting with your bookkeeper or advisor in January to look at what went well and what did not is worth the time.
Tailor the list to your business type
Add items that fit your work. A retailer adds a point-of-sale report tie-out and gift card balances. A contractor adds job cost reviews and retainage. A restaurant adds tip reporting and food inventory. A professional services firm adds work in progress and unbilled time. Keep your version in a shared file and update it each year.
Assign each item to a person and a date. A checklist with owners and due dates gets done, while a checklist without them is only a wish.
Common questions
When should I start year-end work?
Starting in the fall with a mini review gives you time to fix problems. The formal close starts as soon as December statements are available.
What if my books are not caught up?
Do the catch-up first. See our guide on catching up on behind books.
Can my bookkeeper handle the whole checklist?
Most items, yes. Tax decisions stay with your preparer.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.