Year End Checklist

As the year comes to an end, accountants across the United States will work diligently to close out their clients’ books, so that tax returns can be filed on time. Should you be a small business owner, the list below should guide you in closing out the end of year.

Source Documents


  • Bank Statements
  • Credit Card Statements
  • Loan/LOC Statements
  • Payroll Reports
  • Inventory Count
  • Prior Year Tax Return

Income Statement

The Income Statement (or Profit and Loss) shows the money moving in and out of the business. You want to be sure that the revenue and expenses are accurate so that income is properly reported to the IRS and plan for the future. It is important to not only look at the totals on a yearly Income Statement, but look at a month over month comparison. This ensures that all transactions are in the correct period. Why? If you are looking for trends in the business, you need a true representation of the company’s performance in the books.

Ask yourself:

  • Are transactions left in Suspense or Ask my Accountant?
  • Are expenses consistent?
  • Is income consistent?
  • Does the income match the Point of Sale reports?
  • Are merchant fees accurate? Cost of Goods/Cost of Sales: Have all direct costs been properly broken out?
  • Matching Principle: Are income and expenses booked in correct period?
  • Have all large purchases been capitalized and depreciated?
  • Do payroll totals (salaries and employer tax) match?
  • If an S Corp: Is officer compensation delineated? Are officer health benefits on the W2?

Balance Sheet

The Balance Sheet shows the financial position at a point in time. You can identify what the value of all assets, liabilities, and equity are by pulling this report. It is essential to not only validate the ending balances against their statements, but to validate balances in accounts that do not have statements.

For example, typically you do not have statements for Accounts Payable and Accounts Receivable. In fact, your accounting file is the source of truth. What happens if you look at your books and see a large balance in Accounts Receivable, but know that those clients won’t be paying due to a dispute? Unless you write those balances off, your books will carry those invoices forward. Be sure to write off any aging past due receivable balances, so that your books accurately reflect what you believe you will able to collect.

Validate Balances:

  • Checking and Savings
  • Credit Cards
  • Loans and Lines of Credit
  • Payroll Liabilities
  • Sales Tax Liabilities
  • Prepaid Expenses
  • Year End Inventory
  • Deferred and Unearned Revenue
  • Accounts Receivable and Accounts Payable: Write off Aging Balances?

End of Year Forms

Filing W2s and 1099s is our main goal in January. Be sure that you have W9s from all vendors throughout the year, so that you don’t have to request these at the beginning of the year.

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