1. Balance Your Checkbook

Just as you reconcile your personal checking account, you need to know that your cash business transaction entries are accurate each month and that you are working with the correct cash position. Reconciling your cash makes it easier to discover and correct any errors or omissions—either by you or by the bank—in time to correct them.

2. Review Past-Due (“Aged”) Receivables

Be sure to include an “aging” column to separate “open invoices” with the number of days a bill is past due. This gives you a quick view of outstanding customer payments. The beginning of the month is a good time to send out overdue reminder statements to customers, clients, and anyone else who owes you money.

At the end of your fiscal year, you will be looking at this account again to determine what receivables you will need to send to collections or write off for a deduction.

3. Analyze Your Inventory Status (If Applicable)

If you have inventory, set aside time to reorder products that sell quickly and identify others that are moving slowly and may have to be marked down or, ultimately, written off. By checking regularly (and comparing to prior months’ numbers), it’s easier to make adjustments so you are neither short nor overloaded.

4. Process/Review Payroll & Approve Tax Payments

While you have an established schedule to pay your employees (usually bi-weekly), you need to meet payroll tax requirements based on federal, state, and local laws at different times, so be sure to withhold, report, and deposit the applicable income tax, social security, Medicare, and disability taxes to the appropriate agencies on the required dates. If you need help with payroll, we can help.

Review the payroll summary before payments are disbursed to avoid having to make corrections during the next payroll period. A payroll service provider can do all this to save you time and ensure accuracy at a reasonable cost. You can also use our free paycheck calculator to figure out what you need to withhold from each paycheck.

5. Review Actual Profit & Loss VS. Budget & VS. Prior Years

Your profit and loss statement (also known as an income statement), both for the current month and year to date, tells you how much you earned and how much you spent. Measure it against your budget every month (or quarter). Comparing your actual numbers to your planned numbers highlights where you may be spending too much or not enough, so that you can make changes.

If you have not prepared a budget, compare your current year-to-date P&L with the same prior-period year-to-date P&L to identify variances and make adjustments.

Check out Intuit’s guides to download a free customizable budget template and profit and loss statement.

6. Review Month-End Balance Sheet VS. Prior Month

By comparing your balance sheet at one date—June 30, 2015, for example—to a balance sheet from an earlier date (December 31, 2014), you get a picture of how you are managing assets and liabilities. The key is to look for what has significantly risen and/or declined, and understand why. For example, if your accounts receivables are increasing, is it due to a climb in recent sales or because of slower payments from customers?

Click on the link for a free customizable balance sheet template. You can also learn more about reporting in QuickBooks.

Back to Year-End Guide & Checklists Table of Contents

Year-End Quarterly Guide Steps & Checklist

1. Prepare/Review Revised Annual P&L Estimate

It’s time to evaluate how much money you are actually making, whether your net assets are going up or down, the difference between revenues and expenses, what caused those changes, how you are spending profits, as well as identifying trouble spots, and making adjustments to improve sales and margins.

2. Review Quarterly Payroll Reports & Make Payments

You have been reviewing your semi-monthly payroll reports. However, the IRS and most states require quarterly payroll reports and any remaining quarterly payments. Again, it’s best if your payroll service provider completes these reports and files them. Your job is to review to make sure they appear reasonable.

3. Review Sales Tax & Make Quarterly Payments

If your company operates in a state that requires sales tax, make sure you comply to avoid serious penalties. The U.S. Small Business Administration (SBA) and sales tax software like Avalara can help you determine your state tax obligations.

4. Computer Estimated Income Tax & Make Payment

The IRS and states that have income taxes require you to pay estimated income taxes. Review your year-to-date P&L to see if you owe any estimated taxes for that quarter. Your tax accountant can assist if necessary.

1. Review Past Due Receivables

Now it’s time to check significant past due receivables and decide whether you think customers will eventually pay, whether to send past due bills to a collection agency or whether to write them off for a deduction.

2. Review Your Inventory (If Applicable)

Review your current inventory to determine the value of items not sold. Any write-down of inventory translates to a deduction on your year-end taxes. If you do not write down unsellable inventory, you are overstating your inventory balance and paying additional taxes that you don’t owe. Using inventory management software like Fishbowl can greatly reduce the time and cost in penalties when working with inventory.

3. Fill Out IRS Forms W-2 & 1099-MISC

The IRS has a January 31 deadline that requires you to report the annual earnings of your full-time employees (W-2s) and most independent contractors (1099s). This deadline includes mailing copies of the tax forms to the people who worked for you. Note: A 1099 form is not required for any contractors who earned less than $600. Consider saving time and avoiding errors with an e-filing service.

For help determining whether your worker is an independent contractor or an employee, see our W-2 vs. 1099 Wizard. If you employ independent contractors, check out our guide to filing 1099s.

4. Review & Approve Full-Year Financial Reports & Tax Returns

At tax time, carefully review your company’s full-year financial reports before giving them to your accountant. Before you sign your return, be sure to review it for accuracy based on your full-year financial reports. If the IRS audits your company and finds any underpayment of taxes, it will come to you, not your accountant, for any additional taxes, penalties, and interest.

Accounting software like QuickBooks can help you generate financial reports and manage taxes. To keep a handy reference of a great tax management resource, download the TurboTax Tax Prep Checklist PDF