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Essential Year-End Checklist for Business Owners: Key Steps to Close Out Your Financial Year

As the year ends, it's essential for business owners to prepare their financial records, ensuring compliance, accuracy, and a strong start to the next cycle. Here’s a guide on key areas to consider for a smooth year-end close.

Why the Year-End Review Matters

The year-end process can provide valuable insights and help reinforce your business’s position. Here’s why finalizing your financials may be beneficial:

  • Ensuring Accuracy: A thorough review helps confirm all revenues and expenses are accounted for.

  • Maintaining Compliance: Staying on top of tax and legal requirements minimizes potential issues.

  • Supporting Strategic Planning: Clear financials offer a solid foundation for making well-informed decisions.

  • Assessing Financial Health: Year-end insights can highlight areas of growth and reveal potential improvements.

Key Areas to Consider

1. Bank and Credit Account Reconciliation

  • Reviewing account statements to ensure records align with transactions can support accurate financials.

  • Tip: Regular reconciliations throughout the year may reduce surprises at year-end.

2. Accounts Receivable and Payable Review

  • Evaluating outstanding invoices and bills offers a view into cash flow and helps with accurate reporting.

  • Tip: Some business owners find automated reminders useful for tracking receivables.

3. Inventory Review (if applicable)

  • For businesses with inventory, a physical count can clarify stock levels and highlight areas needing adjustments.

4. Depreciation and Asset Assessment

  • Understanding how to reflect asset depreciation may provide a clearer financial picture and assist with tax planning.

5. Accruals

  • For businesses using accrual accounting, recording outstanding revenues and expenses helps present a complete view.

6. Generating Financial Reports

  • Income Statements, Balance Sheets, and Cash Flow Statements can reveal performance insights that inform future planning.

7. Data Backup

  • Backing up financial data is an essential step for protecting records and ensuring they’re accessible when needed.

8. Tax Document Organization

  • Gathering tax-related forms, receipts, and documentation prepares you for a smooth tax season.

9. Consider Year-Round Guidance from an Accounting Professional

·         Working closely with an accountant throughout the year can help ensure compliance, uncover savings opportunities, and provide valuable insights to support your business's growth.

10. Goal Setting for the New Year

  • Reviewing the past year’s performance can provide direction for setting achievable goals in the coming year.

Best Practices to Keep in Mind

  • Consistent Reconciliations: Monthly reviews can make year-end financials easier to manage.

  • Organized Record-Keeping: Maintaining clear, well-organized records may streamline your close.

  • Automation Tools: Software for invoicing, payroll, or inventory management can help boost efficiency.

If you need professional guidance or personalized support with your year-end closing, reach out to Time Value Accounting & Advisory Services. Our experts are ready to help you navigate the complexities of business accounting and set you up for a prosperous new year.

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