What Small Businesses Should Be Doing Now to Prepare for Year-End (From a Bookkeeping Standpoint)
End of Year Checklist
As the year winds down, many small business owners put bookkeeping on the back burner—right up until tax time becomes stressful, expensive, and rushed.
Schedule Review Now
The truth is, what you do in the final months of the year has a major impact on your taxes, cash flow, and peace of mind. A little preparation now can save thousands of dollars and countless headaches later.
Here’s what small businesses should be doing right now to prepare for year-end from a bookkeeping standpoint.
1. Get Your Books Caught Up (This Is Non-Negotiable)
If your bookkeeping is behind—even by a month or two—year-end becomes a scramble.
Before anything else:
Make sure all transactions are entered
All bank and credit card accounts are fully reconciled
No accounts show unexplained negative balances
Unreconciled books often hide:
Duplicate expenses
Missing income
Misclassified transactions
Personal expenses mixed with business spending
👉 If your books aren’t current, nothing else on this list matters yet.
2. Review Profit & Loss Now, Not in April
Many business owners don’t look at their Profit & Loss statement until tax time. That’s a mistake.
Review your P&L now to:
Understand where money is actually being made
Spot unusually high expenses
Identify deductions you may be missing
Compare year-over-year performance
This gives you time to make smart decisions before December 31, instead of wishing you had.
3. Clean Up Expense Categories
Misclassified expenses are one of the most common bookkeeping issues we see.
Before year-end:
Review large or vague categories (like “Miscellaneous”)
Ensure meals, travel, and vehicle expenses are categorized correctly
Separate owner draws, payroll, and reimbursements properly
Clean categories make tax filing faster and reduce the risk of IRS questions.
4. Separate Personal and Business Transactions
If you’ve mixed personal and business spending throughout the year, now is the time to clean it up.
What to do:
Reclassify personal expenses out of business accounts
Ensure owner contributions and draws are labeled correctly
Confirm business income didn’t hit personal accounts accidentally
This is one of the biggest red flags for accountants and tax preparers—and one of the easiest to fix before year-end.
5. Review Accounts Receivable & Payable
Cash flow problems often come from poor visibility—not lack of sales.
Before year-end:
Follow up on outstanding invoices
Write off uncollectible receivables properly
Review unpaid bills and upcoming obligations
Knowing what’s actually collectible and what’s still owed helps you plan smarter heading into the new year.
6. Prepare for Asset Purchases & Deductions
If you’re considering:
Equipment
Computers
Vehicles
Furniture
Software subscriptions
You may want to make those purchases before December 31 to capture deductions.
But timing matters—and the books need to be clean first to make informed decisions.
7. Verify Payroll & Contractor Records
Make sure:
Payroll totals match your books
Contractor payments are tracked accurately
W-9s are on file for all contractors
This avoids panic in January when 1099s are due.
8. Don’t Wait Until Tax Time to “Fix It”
Year-end bookkeeping cleanup is:
Faster
Less expensive
Far less stressful than doing it during tax season.
Tax preparers charge more for messy books—and many will push cleanup right back onto you.
Final Thoughts: Year-End Prep Is a Business Advantage
Strong bookkeeping isn’t just about taxes—it’s about clarity, confidence, and control.
Businesses that prepare now:
Pay fewer surprises at tax time
Make better financial decisions
Start the new year organized instead of overwhelmed
If you’re unsure whether your books are truly ready for year-end, a quick review now can save you months of frustration later.
Free Year-End Bookkeeping Health Check
If you’re a small business owner and want to know exactly where your books stand before year-end, ProfitWerx offers a free 15-minute bookkeeping review to identify issues and next steps—no pressure, just clarity.
Learn how Oregon small businesses can streamline their finances and why hiring a professional bookkeeper often pays for itself. Practical tips for Oregon owners.
Learn the top 5 bookkeeping mistakes Oregon small businesses make and how to fix them. Improve accuracy, avoid costly errors, and gain financial clarity.
Falling behind on your books? Learn how clean-up and catch-up accounting can restore clarity—without the stress. Discover simple solutions from ProfitWerx.