Set Yourself Up for a Fantastic Start to 2025 with this End-of-Year Close Checklist

As we prepare to wrap up 2024, there’s no better way to set the stage for a successful new year than by finishing strong. A smooth year-end close not only gives you peace of mind but also sets you up to hit the ground running in 2025.

Here’s a comprehensive checklist to help you organize and streamline your year-end close. And remember, if any of these tasks seem daunting, we’re just an email away to assist!

Financial Tasks

• Catch up on your bookkeeping. If you’ve been putting this off, now’s the time to get your books in order to avoid the rush of tax season.
• Reconcile all bank accounts. Include savings accounts, PayPal, credit cards, and cash equivalents. Review old uncleared checks, void or re-issue, as necessary.
• Review and address unpaid invoices. Collect outstanding invoices from customers and clean up any errors in accounts receivable.
• Write off uncollectible invoices. Prepare your books for a realistic reflection of revenue.
• Record all bills due through year-end. Reconcile your accounts payable and ensure balances are accurate.

Payroll and Contractor Preparations

• Update employee and vendor addresses. Ensure accurate W-2s and 1099s by confirming everyone’s information is up to date.
• Gather W-9s from contractors. This simplifies your 1099 filing process.
• Request proof of workers’ compensation insurance. Avoid extra charges by collecting certificates from applicable contractors.
• Decide on year-end employee bonuses. Remember, these payments are subject to withholding taxes.
• Review PTO balances. Adjust or roll over unused days in your payroll system.

Inventory Management

• Schedule and take inventory. Make necessary adjustments to your books after counting.
• Write off unsellable inventory. If possible, sell scrap inventory or waste to recover costs.

Assets and Liabilities

• Update your fixed assets register. Confirm that you still own all of the assets listed on your depreciation schedule.
• Calculate and record depreciation as needed.
• Adjust loans for interest and principal allocations. (Need help accurately recording business loans? Check out this tutorial from our team.)
• Analyze all balance sheet accounts. Ensure all balances are current and accurate.

Tax Preparation and Strategy

• Plan your deductions. Decide whether to maximize deductions or defer income for optimal tax impact.
• Prepare for tax adjustments. Work with your accountant to ensure all entries and reconciliations are complete.

Recordkeeping and Organization

• Ensure a complete paper trail. Match transactions with receipts, invoices, and other documents.
• Digitize and store records. Scan and securely save important documents like bank statements, payroll reports, and contracts. (If you’re still operating your business using a local server to store your data, we wrote a think piece about why you should consider switching to cloud-based storage)

Strategic Planning for 2025

• Create a revenue and profit plan. Enter your 2025 goals into your accounting system. (Need help determining where your revenue should come from in 2025? Check out our article about three different sources of cashflow. Need to find out if your growth strategy actually optimizes your profits? Check out this tutorial we wrote.)
• Review holiday closures. Share your 2025 holiday schedule with your team.
• Update pricing. Adjust product and service prices if this is your annual review period.
• Review key metrics. Decide which performance indicators will guide your success in 2025.

Celebrate and Reflect

As you complete this checklist, take time to celebrate your accomplishments from 2024. Reflect on what went well and set your sights on an even better 2025. If you need help with any of these tasks, we’re here to make the process easier. Let’s close the year with confidence and start the new one with excitement!