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Year-End Bookkeeping Tasks You Must Know


A smooth year-end helps you start the next fiscal year on the right foot. Ensuring that you have a Year-End Bookkeeping is key to ending the fiscal year successfully and rolling the books forward. Up-to-date books allow you to see your company’s performance over the last year, enabling you to make strategic business decisions going forward, help you make sure your annual reports and financial statements are accurate, and prepare for tax season earlier so you are not running at the last minute with a list of deadlines in the New Year.

Ensuring that your books are updated is a multi-step process. You’ll want to create a year-end checklist to cross all your t’s and dot your i’s.

7 Important Year-End Bookkeeping Checklist to Consider

  • Gathering and Analyzing

  • Record Inventory

  • Manage Business Receipts

  • Collection

  • Back Up Information

  • Payroll W2 and W9

  • Reconciliation

Completing year-end bookkeeping tasks is essential for small business owners looking to manage their finances effectively. Before you start, make sure you check off this checklist so everything will go smoothly and efficiently.  Here are essential year-end bookkeeping tasks you should know:


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  • Gathering and Analyzing Financial Statements and Other Records

Analyzing your financial statements and other records throughout the year gives you better insight into how your business performs, allowing you to make informed decisions about allocating resources effectively. This list also helps you with your reconciliation process.  These financial statements and records include:

  • Balance sheet
  • Income Statement
  • 12 month & year end statements: Bank Accounts, Credit Cards, Line of Credits, Loans
  • Cash flow Statements
  • Previous Tax Return
  • Invoice list & monthly Point of Sales Reports

By tracking your expenses, income, and other financials over time, you can identify trends that will help you plan for the future. For example, if you notice your expenses are growing more quickly than your income, it may be time to adjust your pricing or consider cutting costs.  This list will also help you in your reconciliation step below.

  • Record Inventory if applicable

Not all industries need inventory.  But if this pertains to your business, this is the time to consider this if you have been procrastinating in the past.  An inventory account is a key component of the year-end bookkeeping process. It tracks the cost of goods bought and sold for businesses, such as retail stores or manufacturers, who maintain an inventory. Inventory includes freight, insurance, and labor costs for manufacturing or assembling products, and packaging fees.

Once you have calculated all the costs, add them and allocate them to the inventory account. This gives your business an accurate record of the value of its inventory at any given time. It also helps prevent over- or undervaluation. You can also use it to monitor changes in your business’s key details.

  • Manage Business Receipts

Organizing your business receipts is key to accurate recordkeeping  during the year-end bookkeeping process. Set up folders or binders specific to each type of expense or income you have throughout the year. Label all receipts appropriately with the transaction’s date, amount, and goods or services purchased. Store these records in a secure place for easy access during tax filing.

It is also important to always keep digital backups of all business documents and hire a reputable bookkeeping services provider. This can be done through file-sharing services or cloud storage technology. An easy way to keep track of this if you have Quickbooks Online Bookkeeping Software is through your phone.  As shown in my Top 5 Time-Saving Tips When It Comes To QuickBooks Online, using a tool like QuickBooks will help you automate much of your bookkeeping and right at your fingertips.

By backing up documents digitally and attaching it to your transactions ahead of time as they come in will save you time and lost receipt.  Backing up your receipts will ensure that your year-end books are secure and can be accessed easily if needed and deter from future auditing if the IRA sees your books are organized with attachments and back up documents with corresponding transactions.

  • Collect Past Due Invoices

Unpaid invoices can cost your business and negatively affect your cash flow. Therefore, part of the end-of-year bookkeeping task should include organizing and collecting past-due invoices.

To collect unpaid invoices effectively, you should first send out friendly reminders to clients who have yet to pay their outstanding invoices. Send reminders before the end of the year to give the receiver time to respond. If a client has not responded after several attempts, then it may be time for more aggressive steps. You may such call or sending them a certified letter.

While reviewing your books, verify that all paid invoices are accounted for and marked as paid. So, when you pull an Accounts Receivable Reports, you can accurately see how long they are overdue. It will help you take appropriate action to collect rather than get it lost in your system. Moreover, you will not lose the opportunity to get paid for a service you completed.

  • Back Up Information

At the end of the year, it is important to ensure that all financial information is backed up accurately. This includes ensuring that any accounting software used has data saved and backed up to an external source like a cloud-based system or hard drive.

Quickbooks Online, for example, automatically backs up on a cloud.  It pulls transactions from your bank accounts, therefore, it helps make bookkeeping a lot simpler, more accurate and efficient.  If you decide to use another software, make sure that it has a cloud base backup system.  The last thing you need is to put all the work into monthly reconciliation and find out at the end of the year, you forgot to back it up and have to start the year all over again.

  • Payroll W2 and W9

At the end of the financial year, it is important to review your payroll related documents and reports.  Verify all employees and your Form 941, which you should be submitting every quarter.  Consider the following when you review employee information:

  • Benefit changes including changes from full time to part time or vice versa that will affect overall benefit such as sick days, vacation days, bonuses, etc.
  • Employee’s general information
  • Employee wages and deductions
  • Time off and vacation balances if status of full time/part time does not change for the year
  • Paychecks accurate and cashed by employees

The other part of this equation is the 1099-NEC for contractors and vendors where hopefully, if you used a good bookkeeping software or if it is Quickbooks Online, you can total out the year and issue them an IRS form 1099-NEC by the end of every January, which is the deadline every year.

Lastly, consider the owner’s pay. This should have been established with your accountant earlier on when you registered your company  determining whether you are paying yourself a wage or salary vs distribution or dividend based on whether you are an S corp or an individual.  This information comes from your Accountant 

  • Reconcile Bank accounts, Credit Cards, Line of Credits and Loans

At the end of each year, it is important to reconcile your bank accounts, credit cards, line of credit and loans all related to your business. A thorough reconciliation  ensures that you have an accurate record of all related transactions for the past year and classified accordingly for your reports and tax return. You must review all deposits, payments, fees, and interest charges to check for discrepancies and agree the ending balances to your balance sheet. It is also a great opportunity to catch any fraudulent activity, although monthly reconciliation should help and is highly recommended.  The quicker you can catch fraudulent transactions, the quicker you can contact your financial institution to resolve the issue and prevent future occurrences.

Once all discrepancies have been identified, you should make adjustments to the balances in your books as necessary. This is a vital step for proper year-end bookkeeping and will ensure that you have an accurate record of all financial activities for the past year.  AND–you will have your books ready for your tax return long before the April Deadline!

Start With Your Year-End Bookkeeping Tasks Now!

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By keeping on top of year-end bookkeeping tasks throughout the year, you’ll be able to provide accurate financial information when these transactions come in to avoid significant penalties,  delays or accurate tax return associated with providing incorrect information. This helps to maximize efficiency and minimize spending, allowing your business more room for success in the future.

So don’t wait – make sure to complete these essential year-end bookkeeping tasks now so that you can start the new year on the right financial foot!

Find out more about this by talking to us! The Nave Bookkeeping Team is always ready to help you.

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