A practical year-end bookkeeping checklist

Close the underlying records first

Start with all bank and card accounts, including accounts closed during the year. Match statements to the ledger and investigate old reconciling items. Payment processors should be reconciled to gross sales, refunds, fees, and settlements, rather than assuming each deposit is revenue.

Review the balance sheet

An income statement alone cannot establish that the books are ready. Check outstanding customer invoices, unpaid supplier bills, loans, owner balances, and asset additions or disposals. Where inventory is relevant, document the inventory process and explain adjustments.

• Reconcile bank, card, and loan balances.
• Review aged receivables and payables.
• Update the asset register.
• Explain owner contributions and distributions.
• Identify deposits or payments relating to another period.

Build a useful tax handoff

Provide the year-end reports together with supporting schedules. Include the prior-year return, ownership changes, new financing, and details of unusual transactions. Label source documents consistently so the preparer can trace a number without requesting the same records again.

Book accounting and tax treatment may differ. Flag uncertain items rather than changing them solely to match an expected deduction. Your tax preparer can determine the appropriate tax adjustments from complete records.

Keep a list of open questions

A short issue log is better than a silent assumption. Record the amount, account, question, and person responsible for the answer. Agree which unresolved matters block completion and which can be documented for follow-up. Do not discard the supporting records after the return has been filed. Retention requirements vary with the record and circumstances.