Your Year-End Checklist Before December 31
The last few weeks of the year are busy for most service businesses, between holiday schedules, year-end jobs, and customers who suddenly want everything done before January. It’s also the last chance to clean up the year’s numbers while there’s still time to do something with them. Once January 1 hits, most of the useful decisions for this year are behind you and the rest is paperwork.
Here’s what I’d work through between now and the end of the year, in roughly the order it needs to happen. Most of it takes an hour here and there, and it makes January and tax season a lot easier.
The Timeline
| When | What to do |
|---|---|
| October | Get the books current through September. Book a planning meeting with your CPA. Start collecting W-9s from subcontractors and vendors. |
| November | Close October and November. Clean up old receivables. Review pricing for January. Start next year’s budget. |
| December | Meet with your CPA before the year ends. Make any year-end decisions. Count inventory on or near December 31. |
| January | Close December. Send your CPA the year-end books and any forms they need. Get year-end loan statements. |
1. Get the Books Current
Everything else on this list depends on this one. If your books are behind, your CPA can’t plan with you, and any decision you make before year-end is based on a guess. By the end of November, you want:
- Every bank account, credit card, and loan reconciled through at least October
- Nothing sitting in “Uncategorized” or “Ask My Accountant”
- Loan balances on your balance sheet that match the lender’s statements
- Field labor and office payroll recorded separately, so your margins are right
If the books are months behind, this is the time to get help catching up, since trying to rebuild a whole year in February is a lot more painful than doing it now.
2. Meet With Your CPA Before the Year Ends
This is the most valuable hour on the list. A planning meeting in October, November, or early December gives your CPA a chance to look at where the year is headed and talk through options while you can still act on them. After December 31, most of those options are gone. Bring a year-to-date P&L and balance sheet, a rough idea of how December will go, and any big purchases or changes you’re considering. The tax decisions themselves belong with your CPA, and the meeting is only as useful as the numbers you bring to it.
3. Clean Up Receivables
Pull your A/R aging report and go through anything over 60 days. Some of it can be collected with a phone call, some needs a payment plan, and some probably isn’t coming back. Let’s say you have $40k in receivables older than 60 days. If you can collect even half of it before December 31, that’s $20k in the bank heading into January, which is a slow month for a lot of trades. For anything you don’t expect to collect, write it off against bad debt (talk to your bookkeeper or CPA).
4. Collect W-9s From Subcontractors and Vendors
If you pay subcontractors or other businesses, you’ll likely need their tax information to file year-end forms in January. The easiest time to get a W-9 is before you’ve paid someone their last check of the year, and the hardest time is in late January when you need it and they’ve stopped answering. Make a list of everyone you paid this year, check who you’re missing a W-9 for, and send the requests now. Your CPA or bookkeeper can tell you which vendors need forms and what the current filing rules and deadlines are.
5. Count Your Inventory
If you carry parts, materials, or equipment for resale, count what’s on the shelf on or near December 31 and compare it to what the books say you have. Shrinkage, parts that walked off in trucks, and materials that were used but never recorded all show up here. It’s not anyone’s favorite day of the year, but it’s the only way to know your cost of goods and your margin for the year are right.
6. Pull Together Your Equipment List
Write down every truck, trailer, and piece of equipment you bought or sold this year, with the date and the price, and whether it was paid in cash or financed (ideally you do this during the year as it happens!). Your CPA and bookkeeper will want this, and it’s much easier to pull together now than to reconstruct from bank statements later.
7. Look at Owner Pay for the Year
Add up what you’ve taken out of the business this year in salary, draws, and distributions, and compare it to what the business earned. If you’ve taken out more than the business made, it’s better to know that now than to find out when the cash runs short in February. How owner pay should be set up for taxes is a conversation for your CPA meeting.
8. Review Pricing for January
If wages, fuel, insurance, or materials went up this year and your prices didn’t, January is a natural time to adjust. Customers are more used to seeing price changes at the start of a year, and it gives you a clean before-and-after in the books. Run your numbers on labor cost and margin by service line before deciding how much.
9. Start Next Year’s Budget
Even a simple budget helps: expected revenue by month, what you’ll pay your crews, known increases in rent, insurance, and software, and any hires or trucks you’re planning. It gives you something to measure January against, and it shows the slow months ahead of time so you can plan for them.
10. Get Year-End Statements in January
Once the year closes, gather the December statements for every bank account, credit card, and loan, plus payroll’s year-end reports. Your bookkeeper will need them to close December, and your CPA will need them for the return.
Where to Start
If you want one thing to do this week, email your CPA and ask for a planning meeting before the end of the year, then check that your books are current through September. Those two things make everything else on the list easier.
If you’d like help getting the books ready before that meeting, a free Cash Clarity Call is an easy place to start, and we can look at where the year stands together.
