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Year-end bookkeeping checklist

Your tax return is only as good as the books behind it. Work through this list before December 31, or as soon after as you can, and your CPA files from numbers that tie out instead of rebuilding the year in March.

The checklist

  1. Reconcile every account through December 31. Each bank, credit card, and loan account should tie to its year-end statement with a difference of zero.
  2. Clear the catch-all accounts. Recategorize anything sitting in "Uncategorized" or "Ask my accountant" before it lands on a tax return.
  3. Review who owes you and who you owe. Match open invoices and unpaid bills to reality. Write off invoices you won't collect, and record bills that arrived late.
  4. Record big purchases as assets. Equipment and other long-lived purchases usually belong on the balance sheet, not as a one-time expense. Your CPA decides how they're depreciated.
  5. Split loan payments. Each payment is part principal and part interest. Only the interest is an expense.
  6. Tie payroll to the books. Wages and payroll taxes in the books should match your payroll provider's year-end reports.
  7. Collect W-9s and prepare 1099s. Contractors you paid during the year may need a 1099-NEC, which is due by January 31.
  8. Separate personal and business spending. Owner draws, owner contributions, and personal charges on a business card each need their own place.
  9. Close the year. Set a closing date in QuickBooks or a lock date in Xero so last year's numbers can't change by accident.
  10. Send your CPA a clean package. A P&L, balance sheet, and general ledger for the full year, plus the payroll and 1099 reports.

If you're a startup

  • Delaware corporations owe a franchise tax and annual report by March 1. The default calculation often produces a much larger bill than the alternative method, so check before you pay. See the business tax preparation guide.
  • Building a product? Engineering wages may count toward the R&D tax credit, and a pre-revenue company can apply it against payroll tax. Clean books make the claim easier to support. See the R&D tax credit guide.
  • Raising soon? Investors ask for monthly financials. A clean year-end close is the starting point.

Free year-end books check

Send us an export of your books: the P&L and the general ledger for this year. QuickBooks, Xero, or a spreadsheet all work. We send back a short list of anything to fix before your CPA files, and we tell you whether you likely qualify for the R&D tax credit. No call needed unless you want one.

If the books turn out to be months behind, we can catch them up before tax time.

Where Staxiom fits

Year-end is a lot easier when the other eleven months were done on time. Staxiom is an accounting team built by founders, investors, CPAs, and startup people, and the team includes former Big 4 accountants. We get your books current first, then keep them that way with monthly bookkeeping. Monthly plans start at $200/month; see every plan.

Already have a CPA? Keep them. We hand them reconciled books at tax time. See how we work alongside your CPA.

Year-end bookkeeping: FAQ

What should I do before the end of the year in my books?

Reconcile every bank, card, and loan account through December 31, clear anything sitting in uncategorized or catch-all accounts, review open invoices and bills, tie payroll to your provider's reports, collect W-9s for 1099s, and close the year so last year's numbers can't change by accident.

When are 1099-NEC forms due?

Form 1099-NEC is due to both the contractor and the IRS by January 31. Collecting W-9s before year-end makes that deadline much easier to meet.

What does my CPA need from me at year-end?

A full-year P&L, balance sheet, and general ledger from reconciled books, plus payroll reports and the 1099s you filed. A CPA working from clean books spends their time on the return, not on rebuilding the year.

What if my books are months behind at year-end?

Start with catch-up bookkeeping: fill in the missing months and reconcile them before working through the rest of the checklist. A rough rule of thumb is about 4 hours of work for every month of backlog.

What is the free year-end books check?

You send a P&L and general ledger for this year. We send back a short list of anything to fix before your CPA files, and whether you likely qualify for the R&D tax credit. No call is needed unless you want one.

Close out the year with clean books

Send us your P&L and general ledger. We send back a short list of what to fix before your CPA files.

Get a free year-end books check