Year-End Bookkeeping Checklist for Small Businesses (2026)

The last few weeks of the year are the best time to get your books in order. Every account you reconcile now is one less question from your tax preparer in March, and one less surprise when you look at the year's real numbers.

This checklist covers what to close out, what to gather, and what to hand your tax preparer. Work through it in December, then finish it in January once the final statements arrive.

Linked-do-Books provides bookkeeping, not tax or legal services, and we don't prepare tax returns. Confirm deadlines and tax treatment with your CPA or tax preparer.

1. Reconcile every account through December 31

Reconciling means matching your books to the statement, line by line, so the balances agree.

• Business checking and savings accounts
• Business credit cards
• Loans and lines of credit: split each payment into principal and interest.
• Payment processors: Stripe, PayPal, Square, Shopify Payments. Record gross sales, fees and refunds, not just the net deposit. Our guide to reconciling Stripe, PayPal and Shopify payouts walks through it.
• Petty cash, if you keep any.

If you're several months behind on reconciliations, start with catch-up bookkeeping before tax season.

2. Clean up uncategorized and duplicate transactions

• Clear out "Uncategorized," "Ask My Accountant" and suspense accounts.
• Look for duplicates, usually caused by importing a bank feed and also entering transactions by hand.
• Separate personal spending from business spending, and record owner draws or contributions properly.
• Make sure transfers between your own accounts aren't counted as income or expenses.

3. Review accounts receivable and payable

• Receivables: run an aging report. Follow up on overdue invoices and talk to your tax preparer about any that are truly uncollectible.
• Payables: list unpaid bills and confirm every vendor bill for the year is entered.
• Customer deposits and retainers: make sure money received for work you haven't done yet is tracked separately.

4. Gather contractor (1099) information

If you paid independent contractors during the year, your tax preparer will need:

• A Form W-9 on file for each contractor (legal name, address, taxpayer ID).
• Total paid to each contractor during the year, and how you paid them. Payments made by card or through some payment apps may be reported by the payment company instead. Ask your tax preparer.
• Note the threshold change: according to the IRS, the Form 1099-NEC reporting threshold is $2,000 for payments made in 2026 (it was $600 for payments made before 2026). Confirm with your tax preparer.

Form 1099-NEC is generally due to contractors and the IRS by January 31, and when that date falls on a weekend the deadline moves to the next business day. For payments made in 2026, that means Feb 1, 2027 (Jan 31 falls on a Sunday).

5. Count inventory and review fixed assets

• Inventory: if you sell products, take a physical count at or near year-end and adjust your books to match. See inventory costing methods for ecommerce sellers.
• Equipment, vehicles and computers bought this year: keep the receipts and purchase dates. Your tax preparer decides how they're deducted.
• Assets you sold or threw away: note them so they come off the books.

6. Review your profit and loss statement and balance sheet

• Compare this year's profit and loss to last year's. Big swings in a category often point to a miscategorized transaction.
• Check that the balance sheet makes sense: bank balances match statements, loan balances match lender statements, and nothing is negative that shouldn't be.
• Look for expenses that may be easy to miss. See tax deductions small business owners often miss, then confirm with your tax preparer.

7. Build your tax-preparer packet

Hand your preparer one organized folder:

• Year-end profit and loss and balance sheet
• December statements for every bank, card and loan account
• Contractor list with W-9s and totals paid
• Fixed asset purchases with receipts
• Inventory count, if applicable
• Notes on anything unusual: a new loan, a big one-time sale, a change in ownership

Not sure what's bookkeeping and what's tax prep? Read bookkeeping vs tax prep.

8. Close the period and set up next year

• Lock or close the period in your accounting software (QuickBooks Online and most others have a closing date setting) so last year's numbers don't change by accident.
• Back up or export the year's reports.
• Set a monthly reconciliation routine for the new year so you're never doing twelve months at once again.

Too far behind to finish this yourself?

If several months haven't been reconciled, a one-time clean-up project is often faster than doing it alone.

• Books Clean-Up: $150 per month behind, one-time, with a $600 minimum and an $1,800 cap. It covers account reconciliation, fixing discrepancies, and a clean profit and loss statement and balance sheet.
• Monthly bookkeeping plans from $199/month (Lite) to keep the books current afterward.
• Not sure where you stand? Take the free Bookkeeping Health Score.

Get the free checklist: download the Small Business Bookkeeping Checklist (monthly, quarterly and annual tasks), or call (406) 500-5242.

Frequently asked questions

What should be on a year-end bookkeeping checklist?

Reconcile every bank, card, loan and payment-processor account through December 31; clean up uncategorized and duplicate transactions; review receivables and payables; gather contractor W-9s and payment totals; count inventory; review fixed assets; and give your tax preparer a clean profit and loss statement and balance sheet.

When should I start year-end bookkeeping?

Start in November or December with reconciliations and clean-up, then finish in January once the December statements arrive. Waiting until March leaves little time before filing deadlines.

What is the 1099-NEC threshold for 2026?

According to the IRS, the Form 1099-NEC reporting threshold is $2,000 for payments made in 2026, up from $600 for payments made before 2026. For 2026 payments, Form 1099-NEC is due Feb 1, 2027 (Jan 31 falls on a Sunday). Confirm what applies to you with your tax preparer.

Does Linked-do-Books prepare tax returns?

No. We provide bookkeeping and hand your tax preparer clean, reconciled books. Your CPA or tax preparer files the return.

How much does it cost to catch up on bookkeeping before year-end?

Linked-do-Books Books Clean-Up is $150 per month behind as a one-time project, with a $600 minimum and an $1,800 cap. For example, 6 months behind is $900.