We’re in the bottom of the 4th quarter, and time is running out! Now is the perfect time to ensure you’re closing out 2024 with reconciled accounts and a solid plan to kickstart 2025. Accurate year-end financials not only set you up for success but also ensure a smoother tax season—yes, the season we all love to hate. Like it or not, tax season is coming, but with the right preparation, it doesn’t have to be painful. Let us help you tackle it with confidence and precision!
At 8:28 Management, we’re celebrating the 12 Days of Christmas a little differently this year. Many people don’t realize that in Christian theology, the 12 Days of Christmas actually mark the span between the birth of Christ and the coming of the Magi (the Three Wise Men), starting on December 25th. However, since we know how critical it is for businesses to prepare for year-end, we’re starting early with 12 days of expert tips and strategies to help you close out 2024 effectively.
We’ve got a lot to cover, so let’s dive in!
The Year-End Checklist: 11 Steps to Financial Health and Success
Each of the steps below is essential to your business’s financial stability and growth. Completing these ensures accurate reporting and positions your business for a prosperous 2025.
1. Review Financial Statements
Reconcile All Accounts: Ensure all bank accounts, credit cards, and loans are reconciled to match statements. Include all transactions like accounts payable, receivable, loan payments, refunds, and interest paid.
Profit & Loss (P&L) Statement: Confirm income and expenses are categorized correctly. Misclassification can lead to missed deductions.
Balance Sheet: Verify the accuracy of your assets, liabilities, and equity accounts.
Cash Flow Statement: Understand how cash was used and plan for adjustments. (Check out our blog on cash flow management for more insights!)
2. Update and Close Books
Record all sales, receipts, and expenses.
Write-Off Bad Debts: Adjust for any receivables unlikely to be collected.
Reconcile Petty Cash: Ensure all petty cash expenses and receipts are accounted for.
3. Review and Update Inventory
Conduct a physical inventory count.
Adjust for shrinkage (theft, loss, or damage).
Write off obsolete or unsellable inventory.
4. Employee and Payroll Review
Verify employee information for W-2s.
Confirm payroll taxes are paid and filed on time.
Issue bonuses by December 31 for deductibility.
Prepare 1099s for contractors.
5. Assess Tax-Deductible Expenses
Ensure all deductions—travel, meals, office supplies, rent, etc.—are accounted for.
Complete charitable contributions before December 31.
Prepay expenses like rent or insurance to increase this year’s deductions.
6. Review Fixed Assets and Depreciation
Verify depreciation schedules are accurate.
Write off obsolete equipment or assets no longer in use.
7. Prepare for Tax Filing
Confirm estimated tax payments are up to date.
Maximize contributions to tax-deferred accounts like 401(k)s or SEPs.
Review eligibility for credits like R&D or energy-saving credits.
8. Review Legal and Compliance
Update operating agreements if there are ownership or structure changes.
Review vendor agreements, leases, and contracts.
File your annual report with the state to stay in good standing.
9. Plan for Next Year
Build a budget based on current performance and 2025 goals.
Schedule tax planning with your CPA to identify strategies to minimize liability.
10. Backup and Organize Financial Records
Backup accounting data both in the cloud and locally.
Retain important documents (e.g., receipts, payroll records, and statements) for IRS compliance.
11. Consult with Your Accountant
Schedule a year-end review to analyze performance, discuss strategies, and plan for 2025.
Get Your Free Year-End Checklist
To make your year-end preparation even easier, we’ve created a free, downloadable year-end checklist that covers everything outlined above. Click the link below to grab your copy and get started!
Looking Ahead
This is just the beginning of our 12 Days of Christmas series! Each day, we’ll share actionable tips and strategies to help your business thrive. Tomorrow, we’ll dive into maximizing your tax savings before the end of the year. Stay tuned—you don’t want to miss it!
At 8:28 Management, we’re here to guide you with faith, integrity, and expertise. Let’s make this season one of preparation and progress! 🎄✨
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