Year-End Close
The year-end close is your final opportunity to ensure your books are accurate and tax-ready before working with your CPA. This recipe walks you through zeroing out loose ends, reviewing your full-year financial performance, and confirming all deductions are properly categorized. Taking an hour to complete these steps now prevents costly mistakes during tax season.
1. Zero out uncategorized transactions
Uncategorized transactions create gaps in your financial records and can delay tax preparation. This step identifies any transactions you've logged but haven't properly categorized so you can assign them to the correct deduction categories or income accounts before the year closes.
2. Run final P&L and YTD
Your Profit & Loss statement shows your complete financial picture for the year—total income, total expenses, and net profit or loss. Running this report now gives you a clear view of your financial performance and flags any unusual patterns that might need attention.
3. Review all deduction categories
Reviewing your deductions by Schedule C line ensures every expense is in the right category for tax purposes. This organized view helps you spot missing deductions, verify accuracy, and makes it much easier to provide documentation to your CPA if needed.
4. Confirm cash balance
Your ending cash balance should match your bank account and reflect all transactions recorded throughout the year. Confirming this number ensures your books are complete and reconciled, giving you confidence in your financial records.