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December is a good month to tidy the books, because the year is almost complete and tax season has not started yet. A few hours now make January and February calmer, and they give you a clear picture of how the year went. This list covers what to check in December, what to leave for January, and how our free tools can help. It does not cover tax rates, limits, or deadlines, which change from year to year; ask whoever prepares your return about those.
Bring the books up to date through November
Start with the months that are already closed. Make sure every bank account, credit card, and payment app is recorded and reconciled through the end of November, so that December is the only month left.
If you find a gap of several months, it is better to know now than in March. Bringing past months up to date is a catch-up project, and it is easier to plan in December than in the middle of tax season.
Look for what is missing
- Receipts for larger purchases, especially equipment, tools, or vehicles
- Invoices you sent that have not been paid
- Bills you received that you have not paid yet
- Transactions you were not sure how to categorize
- Personal expenses paid from a business account, or business expenses paid personally
None of these has to be solved today. The goal is a short list of loose ends, so nothing surprises you later.
Check your contractors and your payroll
If you paid contractors during the year, make a list of who they are and how much you paid each one, and check that you have the information you asked them for, such as a W-9. Whoever prepares your return will tell you what has to be filed and when.
If you have employees, make sure your payroll reports for the year are complete and match what you see in the bank. If your payroll provider sends year-end summaries, save them with your tax documents.
Review your subscriptions and recurring charges
December is a good time to read through the charges that repeat every month on your accounts. Cancel what you no longer use, and note any price changes. It is a small task, but it often turns up charges nobody remembers signing up for.
Read the year in your reports
With the books current through November, your profit and loss statement shows most of the year. Compare it with last year if you can. Which months were strongest? Which expenses grew? Did the business keep more or less than you expected? If you are not used to this report, our guide on how to read a profit and loss statement walks through it line by line.
It is also a good moment to think about next year: what you want to change, and what kind of help you would like to have.
In January, gather the rest
Some documents only arrive after the year ends, such as year-end statements and the tax forms that customers, banks, and payment platforms send. Our free tax appointment checklist lists what business owners usually gather, so you can tick items off as they arrive and print the list for your appointment.
If you would like help with the books next year, our bookkeeping cost estimator shows a monthly range based on our published prices before you talk to anyone.
Let's talk about your business
If December reminded you how much time the books take, we can help keep them current every month, so next year's list is shorter. Send us a message in English or Spanish, and we will talk it through.
Questions about this topic
Do I have to finish all of this before December 31?
No. These are suggestions to make tax season easier, not deadlines. Whoever prepares your return can tell you whether anything in your situation has a date attached.
My books are months behind. Is it too late to fix them before tax season?
It is usually better to start now than to wait. A catch-up project brings past months up to date. At Choice it starts at $200, and the price depends on how far behind the books are.
What documents arrive in January?
Commonly year-end statements from banks and payment platforms, payroll summaries, and tax forms that report payments made to you. Our tax appointment checklist lists them, so you can tick them off as they arrive.
Can you help with year-end if I am not a monthly client?
Yes. We can talk about catch-up bookkeeping or tax preparation on their own. Some owners start that way and then continue with monthly bookkeeping.
Written by the team at Choice Business Advisors, a bookkeeping, tax, and advisory firm based in Utah serving small businesses across the United States in English and Spanish.