Year-end Accounting Checklist: Simple Steps To a Stress Free Close

Year-end accounting and planning are critical for businesses to maintain financial health and set the stage for a successful year ahead. These practices ensure accurate financial records, tax compliance, and informed decision-making, enabling businesses to optimize performance, address key tasks, and avoid mistakes. A well-structured year-end checklist simplifies the process, providing a solid foundation for the upcoming fiscal year and supporting future growth and sustainability.

As the fiscal year comes to a close, businesses must navigate key accounting processes to finalize their books and prepare for a seamless transition into the new year. A well-structured checklist ensures all financial and tax obligations are managed efficiently, preventing critical tasks from being overlooked. By offering a clear snapshot of company performance, showing trends and analyzing progress to help businesses make strategic decisions and ensure smooth operations as they move into the new year.

• Year End Close

  a. Verify accounts receivable and payable by reviewing outstanding invoices, reconciling bills, and ensuring all receipts and payments are accurately processed and recorded.

  b. Reconcile bank and credit card accounts by matching bank statements with company records to identify discrepancies and ensure all transactions, including deposits and withdrawals, are accurately reflected.

  c. Prepare a closing schedule, record accruals for unpaid expenses or unreceived income, adjust depreciation schedules as needed, and update tax-related accruals, including withholding taxes and sales tax.

• Review Financial Statements

  a. Ensure accuracy in the income statement by recording all revenues and expenses, verify the balance sheet for correct assets, liabilities, and equity, and track operating, investing, and financing activities in the cash flow statement.

  b. Conduct a Budget vs. Actual analysis to compare the planned financial budget with actual performance, helping to identify variances and evaluate the accuracy of financial forecasts and expenditures.

• Payroll Review

  a. Reconcile employee payroll, ensuring proper deductions, and verify the correct tax withholdings.

  b. Review bonuses, commissions, and other compensation for accurate reporting.

  c. Prepare and distribute year-end forms (e.g., W-2, 1099).

• Financial Planning, Forecasting, and Business Goals

  a. Review financial performance to identify trends, profitability, and areas for improvement.

  b. Set realistic financial goals, prepare budgets, and create cash flow projections for the upcoming year.

  c. Develop a comprehensive budget, forecast revenue, plan resource allocations, and create strategies for investments, cost-cutting, and revenue generation.

• Tax, Legal, and Regulatory Compliance

  a. Review fixed assets to ensure new acquisitions are recorded and depreciated correctly and dispose of or write off any unused assets.

  b. Verify tax payments and compliance with local, state, and federal tax obligations, while preparing and filing necessary tax forms and planning for future tax payments.

  c. Adjust grants and entitlements, confirm compliance with legal and regulatory requirements, ensuring business licenses, permits, and insurance policies are up to date.

• Financial Reporting and Audit Preparation

  a. Prepare for audit by ensuring financial records are organized and accessible, gathering supporting documentation, and reviewing internal controls.

  b. Prepare year-end financial reports for stakeholders, including relevant analysis and commentary on the business’s financial position.

At FinSage, our experienced team simplifies year-end and annual financial planning, streamlining the time-consuming and complex tasks involved in the process. By leveraging outsourced bookkeeping and controller services, businesses can benefit from early budgeting and forecasting, allowing a current and accurate picture of your business’ progress. Preparing ahead with a year-end accounting checklist ensures a smooth closing process, helping businesses reduce stress and focus on growth.

Contract FinSage today and let us help you with your journey into your company’s financial growth.