Year-End Bookkeeping Checklist: Complete Guide for Small Business Owners 2026
Year-End Bookkeeping Checklist: Complete Guide for Small Business Owners 2026
Year-end bookkeeping is when small errors become expensive problems. The transaction you miscoded in February, the contractor payment you forgot to track, the bank account you haven't reconciled since October — they all come home to roost in December and January.
This complete year-end bookkeeping checklist covers everything you need to do before you hand the books over to your accountant. Use it as a self-guided process or give it to your bookkeeper to run through.
Start in October: Don't Wait Until December
Year-end prep is a two-to-three month process, not a one-week sprint. Bookkeepers who wait until January are competing for their accountant's time with every other small business in the country. Start now.
October–November: Catch-Up and Cleanup
Reconciliation Catch-Up
- ☐ All bank accounts reconciled through October
- ☐ All credit card accounts reconciled through October
- ☐ Any outstanding items from prior months resolved or documented
Transaction Review
- ☐ All transactions coded (no uncategorized items)
- ☐ All transactions in the correct period (check for items coded to wrong months)
- ☐ Split transactions split correctly (mixed personal/business, multiple expense categories)
Accounts Receivable
- ☐ AR aging reviewed — identify uncollectible accounts
- ☐ Invoices over 90 days old: decide to write off or continue collections
- ☐ All payments matched to invoices (no undeposited funds aging)
Accounts Payable
- ☐ AP aging reviewed — no past-due bills that should have been paid
- ☐ Any vendor credits applied or refunded
- ☐ All bills entered for goods/services received but not yet paid
November: Asset and Liability Review
Fixed Assets
- ☐ All asset purchases during the year recorded in fixed asset register
- ☐ Any disposed or sold assets removed from the books
- ☐ Depreciation schedule current through year-end
- ☐ Section 179 elections noted for CPA
Loans and Lines of Credit
- ☐ Each loan balance reconciled against lender statements
- ☐ Interest paid vs principal paid tracked correctly
- ☐ New loans or refinances recorded correctly
Payroll-Related (if applicable)
- ☐ All payroll runs reconciled
- ☐ W-2 preparation started (need accurate YTD figures)
- ☐ Contractor payments totaled for 1099 determination
- ☐ Workers' compensation audit figures ready
December: 1099 Prep
1099s are due January 31st. You need all contractor information in your system by mid-December to avoid a last-minute scramble.
1099 Checklist
- ☐ Identify all contractors paid $600 or more during the year
- ☐ Verify you have a signed W-9 for each contractor
- ☐ Verify contractor addresses are current
- ☐ Total payments to each contractor through year-end
- ☐ Determine which payments are 1099-NEC eligible (services) vs non-reportable (product purchases, corporations)
- ☐ Verify EIN/SSN for each contractor
1099 filing services: QuickBooks Online has built-in 1099 e-filing. Alternatively, use Tax1099.com or Track1099. File both electronically (to IRS) and send paper copies to contractors.
December–January: Year-End Adjustments
Standard Year-End Journal Entries
- ☐ Year-end depreciation posted
- ☐ Prepaid expenses adjusted (what was prepaid in prior year, what was earned this year)
- ☐ Accrued liabilities reviewed and updated
- ☐ Inventory count completed and adjusted (if applicable)
- ☐ Bad debt reserve reviewed
Owner/Shareholder Items
- ☐ Owner draws/distributions summarized for the year
- ☐ Loans to/from owners documented with promissory notes
- ☐ S-Corp shareholder health insurance included in W-2 Box 1 (if applicable)
- ☐ S-Corp reasonable compensation reviewed
January: Final Steps Before Tax Season
Final Reconciliations
- ☐ December bank reconciliations complete
- ☐ December credit card reconciliations complete
- ☐ All accounts reconcile to year-end statements
Books Review
- ☐ P&L reviewed for full year — anything unexpected?
- ☐ Balance sheet reviewed — any accounts that shouldn't have balances at year-end?
- ☐ Compare to prior year — major changes explained?
CPA Package Preparation
- ☐ Annual P&L (cash or accrual, per engagement)
- ☐ Balance sheet as of December 31
- ☐ General ledger printout or access to accounting software
- ☐ Bank statements for all accounts, all 12 months
- ☐ Prior year tax return for reference
- ☐ List of any major transactions that need explanation
- ☐ Fixed asset additions with date placed in service and cost
- ☐ Loan statements showing year-end balances
Common Year-End Mistakes That Cost You Money
Expensing something that should be capitalized: Equipment over $2,500 typically needs to be capitalized and depreciated, not expensed in one year (unless you elect Section 179). Talk to your CPA before year-end if you made large equipment purchases.
Forgetting home office deduction documentation: If you work from home, you need square footage calculations and receipts for utilities, insurance, and rent/mortgage interest. Gather these now.
Mixing business and personal at year-end: Any personal expenses paid by the business need to be identified and reclassified as owner draws before you close the books. Don't leave "miscellaneous" items for the CPA to sort out.
Missing estimated tax payments: The fourth quarter estimated tax payment is due January 15th. Make sure it's been made and recorded.
Download the Template
The Operator Atlas Bookkeeping Ops Pack includes a complete year-end bookkeeping checklist, a 1099 contractor tracking sheet, a CPA handoff package template, and a year-end financial review guide — all editable in Google Sheets and Excel.