How to Create a Bookkeeping Checklist for Year-End Closing

As the year winds down (which is different for different businesses), small business owners and bookkeepers alike face one crucial task—closing the books. Year-end closing isn’t just about wrapping up your finances; it’s also about setting your business up for a strong start in the new year. A well-organized bookkeeping checklist helps ensure accuracy, reduces stress, and makes tax season much smoother.

Here’s how to create an efficient year-end bookkeeping checklist:

1. Review and Reconcile All Accounts

Start by reviewing your balance sheet and profit and loss statements. Then, reconcile all bank, credit card, and loan accounts to make sure your records match your financial institutions.

✔ Bank and credit card reconciliations
✔ Match loan balances and interest payments
✔ Confirm PayPal, Stripe, and other payment processors

2. Record All Expenses and Income

Make sure everything is accounted for, even those last-minute purchases or incoming payments. Don’t forget to include digital receipts and unpaid invoices.

✔ Enter all receipts and bills
✔ Verify all income is recorded
✔ Match invoices with payments received

3. Update Payroll Records

Payroll is often one of the most complex areas. Double-check that all employee records are up to date and accurate.

✔ Confirm W-2 and 1099 details
✔ Reconcile payroll tax liabilities
✔ Record year-end bonuses

4. Review Accounts Receivable and Payable

You want to know exactly what money is still owed to you—and what you still owe.

✔ Follow up on unpaid invoices
✔ Write off bad debts, if applicable
✔ Make final vendor payments

5. Inventory Check (if applicable)

If your business deals in physical goods, conduct a year-end inventory count and adjust your books accordingly.

✔ Complete physical inventory count
✔ Adjust for shrinkage or obsolescence
✔ Reconcile inventory with accounting records

6. Depreciate Fixed Assets

Make sure your fixed asset register is current, and apply depreciation for the year.

✔ Add new assets purchased during the year
✔ Dispose of assets no longer in use
✔ Calculate and record depreciation

7. Backup and Archive Your Data

Before closing your books, create backups of your accounting software and any important documents.

✔ Cloud and local backups
✔ Store documents in organized folders
✔ Retain copies of receipts and financial reports

8. Prepare Financial Reports

Now that your books are tidy, generate your year-end financial reports.

✔ Profit & Loss Statement
✔ Balance Sheet
✔ Cash Flow Statement

These will be critical for tax filing and strategic planning.

9. Meet with Your Accountant

Before finalizing anything, it’s wise to have your accountant review your books and offer tax-saving tips or spot discrepancies.

✔ Send over your year-end reports
✔ Discuss any large purchases, changes, or tax strategies
✔ Clarify what documents they need for filing

Creating a year-end bookkeeping checklist may take a bit of upfront work, but it’s a smart investment in your business’s financial health. With everything in order, you’ll walk into tax season with confidence—and maybe even a little peace of mind. At MakeCentsBookkeepingllc, we can help you achieve a smoother end of year closing.