January is when everyone wants your numbers, and it’s the worst month to go looking for them. Almost everything that makes year end painful can be handled now, in October and November, while there’s still time to chase a missing W-9 or an invoice nobody paid.
Here’s the order we work through it, and it’s built around one idea: do the parts that depend on other people first, because those are the parts you don’t control.
The year-end bookkeeping checklist starts with other people
Anything that needs someone else to respond has a long tail. A vendor who hasn’t sent a W-9 in October will still be ignoring you in December, and by January you’re filing without the information you need.
Start these now:
- Review your contractor and vendor payments to identify who may require a 1099, and request any missing W-9s.
- Send statements to customers with open invoices, so the ones who intend to pay still can before the year closes
- Ask your payroll provider what they need from you and when, including any fringe benefits or owner compensation that has to be recorded before the final run
- Tell your tax preparer you’re coming, and ask what they want and in what format
None of that takes long. It just can’t be done quickly, which is the whole reason it goes first.
Get your reconciliations up to date
Make sure your bank and credit card accounts are reconciled through the most recent available statements. Once December statements become available in January, complete the final reconciliations for the year.
This is the step that decides whether the rest of the checklist is worth doing. Reports built on unreconciled accounts look finished and tell you nothing. If the September reconciliation has never been done, no amount of December tidying fixes the year.
Work oldest to newest, and don’t skip the accounts that feel minor. A barely-used card, a savings account, a payment processor holding a balance, a loan: each one is somewhere a transaction can hide.
Clear out the transactions nobody has categorized
Every set of books has a pile of transactions sitting in uncategorized, or dropped into “ask my accountant” and forgotten.
Work through them now rather than in January, because you still remember what they were. A charge from eight months ago with an unfamiliar vendor name is much easier to place in October than it will be after the holidays.
Anything you genuinely can’t identify goes on a short list for your tax preparer rather than into a best-guess category. Guessing is what turns a small question in October into a number nobody can explain in April.
Read the balance sheet, not just the profit and loss
The profit and loss is the report everyone looks at. The balance sheet is where year-end problems actually live.
Worth checking before the year closes:
- Loan balances agree with the lender’s statements, with interest and principal split correctly
- Credit card balances match the card statements
- Review owner withdrawals and contributions to ensure they’re recorded correctly based on your business structure, rather than automatically treating them as income or expenses.
- Review equipment purchases to ensure they’re categorized appropriately and that your tax preparer has the information needed to determine depreciation and other applicable tax treatment.
- Undeposited funds isn’t quietly holding six months of payments that were already deposited
- Accounts receivable doesn’t still list invoices from customers who closed, moved, or are never going to pay
That last one matters. Receivables nobody is going to collect make the business look healthier on paper than it is, and they distort what you think the year earned.
A clean balance sheet is also what makes your financial reports worth reading in the first place.
Get your 1099 vendors in order before January
Form 1099-NEC is generally due to recipients and the IRS by January 31, so it’s important to review contractor payments and collect missing W-9s well before year-end.
Pull a list of everyone you paid this year who isn’t an employee. Contractors, subcontractors, cleaners, designers, your attorney. Check each one against the W-9 you have on file, and chase the ones you don’t. The IRS publishes the current thresholds and rules in its 1099-MISC and 1099-NEC instructions.
Doing this in October costs you a few emails. Doing it in January costs you the filing deadline.
If it’s already more than you want to deal with, 1099 preparation is something we handle as part of a plan.
Confirm payroll and sales tax filings are current
Payroll records in your books should agree with what your payroll provider actually filed and paid. Where those two drift apart, year end is when it surfaces, usually as a number nobody can explain.
If you file sales tax, confirm the returns are filed and the amounts in your books match what was remitted. A filing that was missed in the spring is far cheaper to deal with now than next year.
What a year-end bookkeeping checklist can’t fix
A checklist assumes there’s something to check. If the books are months behind, or the QuickBooks file has never been set up properly, none of the steps above will produce a number you can trust.
That isn’t a reason to panic in December. It’s a reason to treat it as its own job, with a scope, rather than something to squeeze into the last two weeks of the year. Catch-up bookkeeping is exactly that job, and October is a sensible month to start it.
Where to go from here
If you’re doing this yourself, the order above is the whole list. Chase the people first, reconcile everything, clear the unknowns, read the balance sheet, sort the 1099s, confirm payroll and sales tax.
If you’d rather it were already done when January arrives, that’s what a monthly plan is for, and we’re happy to look at where your books stand now.
Ledger & Logic provides bookkeeping services and does not prepare or file income tax returns.