Your QuickBooks Year-End Checklist: Close Out the Year with Confidence
Year-end is coming fast, and if you are like most small business owners, you are probably feeling that familiar mix of excitement and dread. Excitement about what the new year will bring, and dread about getting your books in order before December 31st rolls around.
Here's the good news: with QuickBooks Online and a solid checklist, you can wrap up your year smoothly and start the new year with clarity and confidence. Let me walk you through exactly what you need to do.
Why Year-End Matters More Than You Think
Before we dive into the checklist, let's talk about why this matters. Closing out your year properly is not just about keeping your accountant happy (though they will definitely appreciate it). It's about:
Getting accurate tax information to minimize your tax burden
Understanding your true profitability for the year
Making smarter decisions for the year ahead
Avoiding costly mistakes or missed deductions
Starting January with clean, organized books
Think of it like spring cleaning for your finances. A little effort now saves you major headaches later.
Your Step-by-Step QuickBooks Year-End Checklist
1. Reconcile Every Account
This is non-negotiable. Before you do anything else, reconcile all your bank accounts, credit cards, loans, and any other accounts in QuickBooks. Make sure every transaction from January through December is accounted for and matches your bank statements.
Why this matters: Unreconciled accounts mean your financial reports are not accurate, and you could be making decisions based on wrong information.
2. Review Your Profit and Loss Statement
Pull your Profit and Loss (P&L) report for the entire year. Look at each income and expense category carefully. Does everything look right? Are there any categories that seem unusually high or low?
Common things to watch for:
Personal expenses that accidentally got categorized as business expenses
Duplicate transactions
Uncategorized transactions sitting in "Other Income" or "Other Expenses"
Missing income or expenses
3. Check Your Balance Sheet
Your Balance Sheet shows what you own (assets), what you owe (liabilities), and your equity. Review it closely and ask yourself:
Does my cash balance match what's actually in my bank accounts?
Are there old receivables I need to write off?
Are there bills I forgot to enter?
Is my loan balance accurate?
4. Verify 1099 Contractor Information
If you paid any contractors or vendors $600 or more during the year, you'll need to send them a 1099-NEC form by January 31st. Make sure you have:
Complete W-9 forms from all contractors
Correct addresses and tax ID numbers
Accurate payment totals for each contractor
QuickBooks can help you run a 1099 report to see who qualifies. Don't wait until the last minute on this one - the IRS takes 1099 reporting seriously.
5. Review and Categorize All Transactions
Go through your transactions one more time and make sure everything is categorized correctly. This includes:
Properly categorizing meals (50% deductible vs. 100% deductible)
Separating personal vs. business expenses
Categorizing vehicle expenses correctly
Ensuring all income is recorded in the right categories
Proper categorization makes tax preparation so much easier and helps you maximize your deductions.
6. Document Major Purchases and Assets
Did you buy any equipment, vehicles, or other major assets this year? Make sure these are properly recorded in QuickBooks, including:
Purchase date
Purchase price
Proper asset account
Any related depreciation
These items often qualify for special tax deductions like Section 179 or bonus depreciation, so you want your tax preparer to have all the details.
7. Review Your Accounts Receivable
Look at your Accounts Receivable Aging report. Are there any old invoices you need to follow up on? Any bad debts you should write off? Cleaning up your A/R gives you a realistic picture of what you are actually owed.
8. Review Your Accounts Payable
Similarly, check your Accounts Payable report. Are there any bills you need to pay before year-end? Any vendor credits you forgot to apply? Make sure everything is current and accurate.
9. Run Your Final Reports
Once everything is cleaned up, run and save these key reports:
Profit and Loss Statement (full year)
Balance Sheet (as of December 31)
Cash Flow Statement
Accounts Receivable Aging
Accounts Payable Aging
Save these as PDFs so you have a snapshot of your year-end financials.
10. Back Up Your Data
QuickBooks Online automatically backs up your data, but it is still smart to export key reports and save them in a secure location. You never know when you might need to reference something years down the road.
The Bottom Line
Year-end does not have to be overwhelming. With this checklist and a little focused time, you can close out your year confidently and set yourself up for success in the year ahead.
Remember, clean books are not just about compliance – they are about having the financial clarity to make smart decisions that grow your business. That is worth the effort.
Need Help Getting Your Books Year-End Ready?
If you are feeling overwhelmed or simply want to hand this off to an expert, that is exactly what we do at Eddington Financial Solutions. As a certified QuickBooks ProAdvisor with over 25 years of accounting experience, I help small business owners just like you get their books organized, accurate, and ready for tax time.
Want to start the new year with complete financial clarity? Schedule a free consultation at www.EddingtonFinancialSolutions.com/contact and let's talk about how we can help.
