Preparing Your Business for Year-End: The Complete Checklist & FAQ Guide

‍Prepare Your Business for Year-End: What You Need to Know

Year-end can either be a frantic scramble or a calm, organized close—depending on how early and efficiently you prepare. Even if your business feels similar to last year, your financial statements never are. New expenses, new vendors, new payroll changes, and even one-off transactions can ripple through your books.

Treating this season as a fresh reset is the best way to avoid tax filing delays, unnecessary adjustments, or stress in the spring. Below is a simplified guide—based on expert accounting practices—to help you stay ahead.

✓ First, Download Your Must-Have Year-End Checklist

Before handing off your books to your accountant, ensure you gather the following:

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1. Core Financial Statements

• Income statement
• Balance sheet (Ensure the numbers tie to reconciliations and supporting detail)

2. Fully Completed Reconciliations

Complete, up-to-date, backed-up reconciliations for:

• Bank accounts
• Credit cards
• Accounts receivable
  
• Accounts payable
  

Tip: A balance sheet number is only as trustworthy as the supporting documentation behind it.

3. Detailed Expense Accounts

• All taxes paid (including franchise, sales, and business license fees)
• Meals separated from entertainment expenses (these cannot be combined for tax purposes)

4. Rollforward Schedules

These help your accountant track movement from beginning to end of year:

• Fixed assets: purchases, disposals, depreciation, amortization
• Inventory: beginning balance, purchases, COGS, adjustments, write-offs
• Retained earnings: should match previous year’s ending balance

If you have inventory, performing a physical count at year-end is highly recommended.

5. Accrued Expenses

Identify any expenses incurred but not yet invoiced:

• Bonuses
• Commissions
• Contractor fees

6. Payroll and Contractor Documentation

• W-2s
• Quarterly payroll filings or payroll registers
• All 1099s (if required), completed and filed

7. Capitalization Table

Confirm your cap table aligns with the equity listed on your balance sheet.

8. Other Key Information

Depending on your business, you may also need:

• Updates to administrative, legal, or banking information
• Confirmation of accounting method (cash vs. accrual)
• Details for any debt or equity financing
• Documentation for any one-time financial events (asset sales, debt forgiveness, FX gains/losses, etc.)
• Foreign bank account details (if balances exceeded $10k at any time)

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Recommended Timeline for C-Corporation Year-End Preparation

A smooth year-end close rarely happens in March or April—it happens in January.

• January: Gather year-end documents, reconcile all accounts, and prepare schedules
• February: Finalize tax materials with your accountant
• April 15: Filing deadline (for most C-corps; confirm with your CPA)

If documents won’t be ready in time, consider filing an extension. There is no penalty for extending, but note: it only extends filing—not tax payment—deadlines.

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Common Year-End Pitfalls to Avoid

Even well-organized businesses run into issues at year-end. Look out for these red flags:

1. Incomplete or unreconciled accounts

If a balance sheet number can’t be traced to source documents, your accountant may require adjustments—or delay filing.

2. Incorrect depreciation or amortization

Many businesses miscalculate fixed asset schedules. Confirm with your accountant to ensure accuracy.

3. Retained earnings inconsistencies

Your beginning retained earnings must match last year’s final number. If it doesn’t, the books need adjusting before tax prep can proceed.

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Frequently Asked Questions

When should you consider filing an extension?

If you know books won’t be ready by March, talk to your tax advisor early. Filing an extension is common and penalty-free, but payments still must be made on time.

Do you really need a physical inventory count?

Yes—if your business carries inventory. This step substantiates your COGS calculation and protects you in the event of an audit.

What should you look for in a tax accountant?

Choose a licensed CPA with:

• Experience filing business returns
• Strong communication habits
• Clear expectations around timelines and deliverables
  
  

Final Thoughts

Year-end preparation is your opportunity to reset, clean up your books, and enter the new year with clarity. By organizing your documents early and reviewing your financials thoroughly, you make life easier for your accountant—and set your business up for a faster, more accurate filing season.

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