What You’ll Learn
- Which accounts and records to review before year-end
- How to find missing transactions and supporting documents
- What to check when you have paid independent contractors
- Which financial reports can help you prepare for the coming year
December may feel like plenty of time away, but year-end bookkeeping becomes much easier when you begin before the holiday season and its added demands arrive.
For small business owners throughout Tacoma and Pierce County, the final months of the year can bring full calendars, seasonal changes, employee time off, and important business decisions. Waiting until December to review an entire year of financial activity can turn a manageable task into a stressful one.
An early review gives you time to locate missing information, correct discrepancies, and understand where your business stands while there is still time to act.
Reconcile Your Financial Accounts
Start by confirming that the activity recorded in your bookkeeping system matches your bank and credit card statements.
Review every account used for business purposes, including:
- Business checking and savings accounts
- Business credit cards
- Payment platforms and merchant accounts
- Loans and lines of credit
Look for duplicated transactions, missing deposits, incorrect amounts, and payments assigned to the wrong account. If a transaction is unfamiliar, investigate it while the details are still easy to recall.
Regular reconciliation helps keep your records accurate and prevents unresolved discrepancies from carrying into year-end reports.
Track Down Missing Records
Receipts and supporting documents can become scattered throughout the year. Some may be saved in email, stored in an app, placed in a physical folder, or still waiting to be requested from a vendor.
Review your records for expenses that are missing documentation or still need to be categorized. Pay particular attention to larger purchases, equipment, professional services, travel, and expenses that could contain both personal and business activity.
This is also a good time to confirm that customer payments match the correct invoices and that outstanding invoices are still collectible. Cleaning up these details now can help you begin the new year with a clearer accounts receivable balance.
Review Your Contractor Information
If your business paid independent contractors during the year, verify your records are complete before you prepare tax forms.
Confirm that you have a completed Form W-9 for each applicable contractor, along with their current legal name, business name, address, and taxpayer identification information. You should also review the total amount paid to each contractor and how those payments were made.
Federal information-reporting requirements can change, so use current guidance to determine which payments may require Form 1099-NEC or another information return. Gathering accurate contractor information now can prevent a last-minute search for missing details in January. The IRS provides current information about forms and taxes associated with independent contractors.
Check Your Payroll Records
If you have employees, review your payroll information for accuracy before year-end.
Confirm employee names, addresses, Social Security numbers, pay rates, and withholding information. Compare payroll reports with the amounts recorded in your bookkeeping system, and verify that payroll tax payments and filings are recorded correctly.
Washington employers should also keep their state payroll and reporting records current. Addressing inconsistencies early gives you time to work with your payroll provider or bookkeeping professional before year-end forms and reports are due.
Review Your Financial Reports
Accurate financial reports can tell you much more than how much money moved through the business. They can show what the year has actually produced.
Review your:
- Profit and loss statement
- Balance sheet
- Accounts receivable report
- Accounts payable report
- Cash flow information
Look for balances that seem unusually high, low, or out of place. Compare income and expenses with earlier periods, and note where actual results differ from what you expected.
These reports may reveal overdue customer invoices, rising recurring expenses, outstanding bills, or areas that need closer attention. They can also help you make informed decisions about purchases, staffing, pricing, and tax planning before year-end.
Give Yourself Time to Resolve Questions
A year-end review does not require every answer to be available immediately. Its purpose is to identify what needs attention while you still have time to find those answers.
If something in your records does not make sense, make a note and investigate it. If transactions have been categorized inconsistently, correct them. If an account hasn’t been reconciled for several months, start working through it now instead of leaving the entire project for December.
Starting early allows you to handle the work in smaller, more manageable pieces and gives your tax professional cleaner, more complete information when filing season arrives.
Prepare for Year-End With Greater Clarity
Year-end bookkeeping is easier when you treat it as a process, not a December deadline. Reviewing your accounts, records, contractor information, payroll, and financial reports now can help you close the year with accurate books and a clearer understanding of your business.
If your bookkeeping needs attention before year-end, I can help you organize the details, address outstanding questions, and prepare your financial records. Contact J. Ott Business Solutions to schedule a confidential consultation for your Tacoma, Pierce County, or South Sound business.