5 Tasks that will Get Your Business Finances Ready for the New Year

December is a weird month. First, it’s super busy because you have a million holiday events and then it’s totally dead because- well the holidays. Many of us use this time for quiet reflection and goal setting for the next year. Goal setting is awesome (and I’m all for it) buuuuuuuuuuuut there are also some end of year tasks that you should do if you want to your business finances to be ready for the new year.

business finances

If you take advantage of the downtime and give your business finances a little love, you will be STOKED come new year’s day. You’ll wake up (after sleeping in for a long time) knowing that your business finances are stepping into a new year all clean and fresh, in a neatly pressed tuxedo- rather than a rumbled up pinstripe suit.

Here’s 5 essential end of year bookkeeping tasks for your business finances:

Organize your receipts and financial documents

You know that pile that has accumulated over the year of receipts, statements, and random notices from your bank? The end of the year is a great time to finally deal with and organize it!


First, important tax documents may be lurking in there and you want to be sure you don’t lose them. Also, organizing your pile ensures that the pile doesn’t carry over to next year AND that you have the records you need for some of the other tasks on this list.

The last reason is purely aesthetic- wouldn’t it be great to start the New Year with a clear space for a new pile? Just kidding. But I DO like to start my new year with a fresh feeling in my office, which is overshadowed when there’s paper clutter.

How to do it: Start by sorting the pile into categories like receipts, bills, statements, and misc. Then do the following for each category:

Receipts- Log the purchase and then file the receipt in an accordion file by month OR take a picture of the receipt and store on your computer OR use a receipt tracking app to photograph the receipt.

Bills- Make sure the bill has been paid. If not, pay it and note when it was paid on the top of the bill. Then treat it like a receipt and either file it or store it digitally.

Statements- If you haven’t done your bookkeeping for the year then you will need to keep these statements handy. If you don’t need them, download the digital copies from your bank and shred. While you’re at, take the first step to pile free-living by switching to electronic statements.

Misc- This is everything that comes in that has to do with finances but doesn’t fit into one of the categories above. Make sure you open every piece of misc mail and read through it. If you need to take action, take action immediately OR schedule a time to take action. Next, decide if you need to keep the mail. Some things, like a notice in the change of terms and policy privacy can get tossed. Others, like notices from the IRS, should be kept in a file.

Catch up your bookkeeping

I know bookkeeping is probably the LAST thing you want to do for your business finances during the magical end of year time, but I’m going to give you a few compelling reasons to catch up your bookkeeping before the year closes out.

First, wouldn’t it be great to start out the new year actually doing your bookkeeping every month? Well, when you have your bookkeeping caught up this is possible!

You see, bookkeeping is a process that RELIES on having the previous month done. If the previous month isn’t done, you can’t move forward. Which is why catching up your bookkeeping before the end of the year sets you up for healthy financial systems in the next year.

Second, catching up your bookkeeping helps you glean valuable end of year information about your business. This info helps you set goals for the next year. When you understand your income and spending habits (which is what bookkeeping helps you do) you can set goals that are realistic AND that you are more likely to reach.

How to do it: Just start. I say this all the time, but I mean it. Don’t wait for the most perfect whatever to come along to jumpstart your bookkeeping. Just do the work that needs to be done.

Now how to logistically do your bookkeeping? You have three options:

Paper tracking sheet
Digital accounting program (like Wave or QuickBooks)

Generally, if you are really backed up, a spreadsheet is your best option because it’s more robust than pen and paper but not as hard to learn as a digital accounting program. You can use this Quick Start Bookkeeping spreadsheet I made that is designed to get help you get your books caught up fast.

Go through your personal statements and look for business expenses

This one is a goody because it’s like going through your favorite pair of jeans and finding cash hidden in the pockets. As much as we try to keep our personal and biz finances separated, occasionally we get our cards mixed up or need to pay for something with our personal account.

Don’t let these expenses go unnoticed! They are valuable deductions that will save your money at tax time.

This is also a good time to log any expenses that are split business and personal that you take a percentage of as a write-off. Common examples are home office expenses, home office utilities, car expenses (if you are taking the actual cost auto deduction), telephone, and any equipment that is mixed personal/business use.

How to do it: Go through your statements and highlight any personal or mixed expenses. If you threw all your statements away because I told you to in the first step, download your transactions as a spreadsheet and digitally highlight the expenses.

Use different colors for expenses that are 100% business (and you just used the wrong card for) and for expenses that are split business and personal.

Log your 100% business expenses according to your bookkeeping method (like this spreadsheet). For the split expenses, start new tracking sheet or spreadsheet with four columns: Date, Description, Amount, %

In the Amount column note the total amount of the expense. In the percentage column, calculate the percentage you write off.

You know who is going to love you for doing this? Yourself AND your CPA.

Follow up with late and non-payers

How awesome would it be to get all those open invoices paid before the end of the year? It’s frustrating not to get paid by clients and it’s especially frustrating when lots of time have passed and they seem to have moved on to the next thing.

It’s totally frustrating not to get paid by clients and it’s especially frustrating when a lot of time has passed and they seem to have completely forgotten about you!

This happens a lot when an invoice gets dragged into the new year, so be sure you close out all of those invoices before the year ends to keep your business finances neat and tidy.

How to do it: Several weeks before the end of the year, go through all of your open invoices and send reminders to non-payers. Here’s a basic template you can use:

Dear _____________,

I’m beginning the process of closing my book for [year] and my records show I have not received payment for invoice [number] sent on [date of invoice]. I’ve attached a copy for your convenience. As a reminder, you can pay me via [list payment methods you accept, be sure you include any specific details like email addresses or websites].

Please send payment as soon as possible and before the end of the year.


Then, remind your client every week until the year ends. People get really busy during the end of the year and lots of things slip through the cracks, so don’t worry about being pushy. Focus on getting paid instead.

Send W-9s to your contractors

Let’s talk about 1099s. One thing that people forget to do and then scramble around doing at the last minute in January is sending W9s to their contractors.

A W9 is a super magical form that collects all the data you need from a contractor to complete a 1099. A 1099 is a form that you are required to file for anyone you paid more than $600 to in a calendar year for business services (think people you contract for specific services).

1099s are due January 31st, which makes December the perfect time to get your W9 ducks in a row. When you collect the information you need from your contractors early (and have your bookkeeping all caught up) when January rolls around your 1099 filing process looks like this:

Run a report to find out how much you paid each contractor, go online and file form

Rather than this:

Realize on January 30th that 1099s are due the next day, frantically go through bank statements trying to figure out who you paid, realize you don’t have any information for them, send a series of desperate emails asking for their info, file the form at 11:56 pm on January 31st

If scenario two sounds like an over-exaggeration of what might happen- it’s not! I have literally filed 1099s for clients at 11:56 pm because we didn’t get their information in a timely manner.

Learn from my mistakes. Send out your W9s in December.

business finances

How to do it: Download the W9 form and email it to your contractors and ask them to fill it out and return it to you by 12/31. You don’t need to explain the form or what you use it for. Contractors are used to receiving these types of forms and many already have pre-filled out copies on their desktops.

Ready to start cleaning up your finances before the end of the year? Don’t forget to grab the Bookkeeping Quick Start spreadsheet so you can close out your books fast.

Andi Smiles is a professional bookkeeper and small business consultant. She has a passion for helping small business owners develop a transparent and loving relationship with their finances and writes about all things solopreneur finance on her blog the BFF course.

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