Your Year-End Books Checklist (Simple + No Stress)
The 2025 Year End Checklist
December is the most critical month of the year for your business finances.
A messy year-end leads to:
missed deductions
higher taxes
inaccurate reports
and a stressful spring
This guide keeps everything simple, clean, and stress-free. I am going to walk you through exactly like I would if you had my team and me running your books for you.
1. Reconcile All Bank + Credit Card Accounts
Start here. Everything else depends on it.
Make sure you’ve reconciled:
business checking
business savings
credit cards
PayPal / Venmo Business
Stripe / Square deposits
any loans or lines of credit
Look for:
duplicates
missing transactions
errors in the feed
outdated connections
👉 If your reconciliation isn’t clean, every report and tax figure will be off.
2. Verify All Income (Don’t Wait for 1099s)
1099s don’t arrive until late January — and sometimes they’re wrong.
Before the year ends:
match deposits to your invoices
double-check payouts from clients, brokerages, platforms
Review Stripe, PayPal, Venmo Business, and Square activity
create a list of who should send you a 1099-NEC
This prevents underreporting or overreporting income, which can trigger penalties or audits.
3. Clean Up & Categorize All Expenses
This is one of the most significant opportunities to save money.
Audit your categories:
Meals vs. Entertainment
Travel (must have a business purpose)
Subscriptions & software
Insurance premiums
Education & training
Equipment + phone/computer purchases
👉 Misclassified expenses = missed deductions.
👉 Uncategorized expenses = deductions lost forever.
How We Do Year-End Books for Our Clients
(Here’s your insider look behind the scenes — and how to apply this to your own books.)
A. We start with the right software
We use QuickBooks Online for almost every client because it’s reliable, audit-proof, and connects to nearly all banking platforms.
Clean software → clean data → clean taxes.
B. We connect every business account
This includes:
checking & savings
credit cards
payment processors
payroll accounts
loans
And yes — we regularly find mixed personal and business expenses.
It happens to everyone.
We clean it up and help you prevent it from going forward, because the IRS and your legal protection suffer when mixing personal and business. Dont Do It!
C. We categorize every transaction properly
Every dollar in or out of your business gets labeled accurately.
We track:
expenses
owner draws/distributions
owner contributions
loan principal vs. interest
refunds
new assets/equipment
Accuracy here = accurate deductions.
D. We attach receipts for documentation
Our preference: every transaction includes a receipt.
Our minimum standard: anything over $75 must have a receipt.
This protects you and keeps your books audit-ready.
E. We reconcile month-by-month
We compare every account against the bank statements from January → December.
This ensures:
no missing transactions
no duplicates
correct balances
accurate reports
Most DIY bookkeeping breaks at this step — and that’s why year-end gets stressful.
F. We generate clean year-end reports (and monthly for our top clients)
Depending on your business, this may include:
Profit & Loss (mandatory)
Cash flow reports
Spending summaries
Balance sheet
Owner compensation analysis (for S-Corps)
These reports drive:
tax preparation
quarterly tax planning
business strategy
your income goals for 2026
Your tax return is only as good as the books behind it.
4. Update Your Mileage Log
Quick and simple:
Add missing trips
Add business purpose
Clean it up while it’s fresh
Mileage is one of the biggest deductions self-employed pros miss. especially those who travel a lot.
5. Review Owner Draws, Loans & Credit Card Payments
A few reminders:
Owner draws are not expenses
Loan principal is not deductible
Loan interest is deductible
Credit card payments should not be double-counted
Clean books reduce IRS red flags.
6. Make Year-End Adjustments
Only include what’s needed:
depreciation
bad debt write-offs
inventory adjustments
clearing the “Ask My Accountant” pile
These ensure your P&L reflects true business performance.
7. Pull a Clean Profit & Loss for 2025
Your P&L helps you:
estimate your April tax bill
analyze spending
spot red flags
plan for next year’s revenue goals
If your P&L doesn’t make sense, reply — I’ll help interpret it for you.
Closing Thoughts
A clean set of books isn’t about being perfect — it’s about being profitable.
Do these steps before December 31 and you’ll walk into tax season calm, prepared, and in control.
Your future self (and your tax bill) will thank you. and if you need someone to handle your year end cleanup for you, simply hit the button below, head to our website and schedule a meeting or give us a call!