As the calendar approaches year end, business owners have more than holiday sales and staff parties on their minds. The weeks before December 31 are a golden opportunity to take control of your finances, reduce tax liabilities, improve cash flow, and set a solid course for the new year.
Waiting until January often means missed deductions, rushed planning, and financial stress. The good news is you still have time to act. This checklist covers essential tasks every business owner should complete before the year officially closes.
Review Your Tax Position and Plan Ahead
Why it matters:
Many tax-saving moves must be completed by December 31. If you wait too long, those opportunities disappear.
How to approach it:
- Review income and expenses to estimate your taxable profit
- Consider accelerating expenses or delaying income to manage your tax bracket
- Maximize deductions with equipment purchases or retirement contributions where applicable
Tip: Meet with your tax advisor now to identify strategies specific to your business and avoid surprises come tax time.
Clean Up Receivables and Payables
Why it matters:
Unpaid invoices and neglected bills distort your cash flow and financial reports.
How to approach it:
- Send reminders for outstanding invoices and encourage clients to pay before year end
- Review your accounts payable and consider paying off certain bills now if it helps with deductions
- Identify and write off any truly uncollectible debts
Tip: Use a simple report from your accounting software to identify old balances and act accordingly.
Evaluate Inventory and Business Assets
Why it matters:
Excess inventory and outdated assets can hurt your bottom line and increase taxable income.
How to approach it:
- Perform a physical inventory count to match your records
- Identify obsolete stock and consider discounting or donating
- Review your asset list for accuracy and ensure depreciation is up to date
Tip: Clearing out unused items can improve space, cash flow, and potentially provide tax benefits.
Organize Financial Documents
Why it matters:
Proper records support accurate tax filings, financial planning, and potential audits.
How to approach it:
- Reconcile all bank and credit card statements with your accounting records
- Gather and organize receipts, invoices, and financial statements
- Verify employee and contractor information in preparation for W2 and 1099 filings
Tip: Scan paper documents and store digital files in clearly labeled folders to streamline future access.
Prepare a Budget and Set Goals for the New Year
Why it matters:
A clear plan allows you to allocate resources, forecast growth, and adjust for market shifts.
How to approach it:
- Compare this year's results to last year's goals
- Estimate next year's income, expenses, and major investments
- Outline marketing, staffing, or product plans based on performance and trends
Tip: Do not wait until January. Planning now gives you a head start and allows time to adjust early in the year if needed.
Confirm Compliance and Upcoming Deadlines
Why it matters:
Missing government filings or tax payments can lead to fines and penalties.
How to approach it:
- Double check that all payroll taxes and estimated taxes are up to date
- Note any annual filing requirements for your business structure
- Verify that your employee classifications and records are accurate and compliant
Tip: Mark important dates on a calendar or task list so nothing slips through the cracks during the busy season.
Start Now to Avoid Regret Later
The best time to wrap up your year end finances is before December 31. Every item you complete now reduces stress, saves time, and positions your business for a stronger new year.
Take Control Before the Clock Runs Out
Do not wait until the final week of December. Pick one or two items from this checklist and get started today. Then, schedule time with your financial or tax advisor to finalize your year end planning. Small actions now can lead to big rewards in the months ahead.
You still have time. Use it wisely.