The Ultimate Year-End Bookkeeping Checklist for Small Business Owners

Between getting over this year’s tax season and managing holiday sales, your bookkeeping task can easily fall to the bottom of your to-do list.

As the calendar year-end quickly approaches, your business fiscal year-end may also end. So it is time to roll up your sleeves and get your books for the start of the new year. We have collected a list of items you should add to your Year-End Bookkeeping Checklist to ensure your business transitions into the new year as smoothly as possible.


This article is written for informational purposes only. It is current at the posting date and changes to laws and regulations may result in outdated information. We do not intend to provide legal, tax, or financial advice. We recommend that readers get advice from a tax professional before making final decisions.

1. Get Your Books Caught Up

This can be a relatively simple point if you consistently enter receipts, invoices, and payments throughout the year. Meaning you kept up with entering them daily, weekly, or monthly. If you haven’t consistently entered your receipts, invoices, and payments, now is the time to complete it.

Even if you have been keeping up with them, this would be a great time for a quick review and to look at some of the less frequent expenses like annual membership dues, insurance, web hosting, etc. that your business may incur and ensure they have been entered as well.

2. Reconcile your bank statement

Whether you keep track of your books online or on paper, you must ensure that your books match your Bank and Credit Card statements. Some of the newer software programs on the market may automatically keep track of this.

However, if you don’t have a program that does that for you automatically, you should be reconciling your bank and credit card statements monthly.

3. Collect necessary forms

Once the new year arrives, your accountant will need certain forms to finalize your books and file your small business taxes. Collect them as soon as possible to get a headstart into the new year.


Business owners use form W-2 to report salary information for their employees. It also helps businesses report the taxes they withhold from their employee’s paychecks. Your employees will need that information to file their tax returns.

As a business owner, you must provide your employees with their W-2s before January 31st. Your employees need their W-2s to file their taxes on time.

You’re also responsible for submitting the W-2 information to the IRS.


If you worked with independent contractors or vendors and paid them over $600, you must report those payments to the IRS using form 1099-NEC. The information you need to complete your W9 Form you can collect from your contractors.

Schedule K-1 – Partner’s Share of Income, Deductions, Credits

S-Corporation shareholders and Partnership members use Schedule K-1 to report their share of the business’s profit and losses. Shareholders and Partnership members will also include the form with their personal tax returns.

Your CPA will provide the Schedule K-1 or Form 1065, which must be sent to shareholders and partners before March 15th.

Form 1099

1099-K – Payment Card and Third-Party Network Transactions

The 1099-K tracks payments received through third-party payment networks, like eBay, Stripe, Shopify, Paypal, and Co. It shows your gross sales before any fees are deducted. What then lands in your bank account is the net amount or the amount after fees are deducted from your gross revenue. You should receive one 1099-K from each of the Online Payment Networks you use no later than January 31st.

You must complete each of the 1099-K forms, and your gross receipts must be at least as high as the amount you report on your 1099-K.

1099-NEC – Nonemployee Compensations

1099-NEC is used to report any non-employee compensation over $600 to independent contractors or vendors that are not paid through payment platforms like Upwork or Fiverr.

1099-MISC – Miscellaneous Income

With the 1099-MISC form, you notify the IRS and other government agencies that the person named in the form received taxable payments during the year. The basic rule is that you must file a 1099-MISC whenever you pay an unincorporated independent contractor $600 or more during your trade or business. The independent contractor could be a solo proprietor or a member of a partnership or LLC.

4. Follow-up on past-due Invoices

Review past-due invoices to see what you are owed. If there are any outstanding payments, reach out to your customers before the end of the year to close your books successfully.

5. Make sure your Accounts Payables are on track

Just like following up on past due invoices, you should take a final look at your accounts payables and make sure to settle any open invoices.

6. Account for Inventory

Next, you should do a final inventory count. You should do this on the day you close your books (for many businesses, this will be December 31). It will also help you determine how much was spent on your materials and supplies and the current value of your inventory. Small businesses are expected to record their inventory at the beginning and end of each year, as these totals are used on several tax forms. Match your inventory totals to your balance sheet. If you see inconsistencies between your inventory count and balance sheet, fix the issue.

7. Review financial statements

Preparing and analyzing your financial statements, like income statements, balance sheets, and cash flow statements, is crucial not only for enterprises but also for small and mid-sized businesses. They let you analyze past and present transactions and help you predict the business’ financial future. It allows you to plan for the new year accordingly. Your financial statements can help the management team, shareholders, and investors analyze the year-end better.  

Reach out; We are here to help!

We understand that some of this may be more than you want to take on at the end of the year, and nothing is more important than having a supportive team of caring people around you.

Don’t hesitate to contact us if you feel overwhelmed with your year-end bookkeeping or keeping up with your bookkeeping throughout the year. At Ovelly Bookkeeping, we provide all clients with reliable and effective bookkeeping and payroll services. We are here to help!


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