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The Year End Financial Checklist

Approaching the end of the year can be a hectic period for many small and mid-size businesses.  The balancing act of finishing the year with as much revenue as possible and prepping for a good start to the new year while working around vacation schedules often leads to a frenzy of activity.  Important to note however, are five key financial items to check off the list before the year runs out:

Talk to Your Tax Accountant

  • First and foremost, have a conversation with your CPA before the year ends to give them an idea of where you expect to end the year financially. There may be some decisions to make before the year is out.  Every situation is unique, so the counsel of a good tax accountant is critical.
  • Are You a Cash Basis Taxpayer? If so, there are some important decisions that could affect your tax bill for the year.  A mad push at the end of the year to collect Accounts Receivable could result in greater tax liability.  On the flipside, accelerating payments of Accounts Payable can have the opposite effect.  The key consideration here is cash on hand as well – be cautious not to make a tax-wise decision that makes the business cash poor.
  • Are you planning any major purchases before year end? For many businesses, especially with the more favorable tax write offs available, sizeable purchases of equipment and other assets often occur late in the year.  Two vital questions – 1) does it make senses this year (get help from your CPA to answer this) and 2) what is the impact on the cash of the business?


  • Many companies pay year-end bonuses, especially in good years. When are they paid?  Before or after year end?  And what is the impact on the cash of the business?

Year End Financials

  • Year end is a great time to focus on cleaning up items in the financial statements of the business. This provides a more accurate picture of the year’s performance and provides a clean slate for the new year.  With that being said, it also requires a more thorough effort, and thus more time to close the year.  Plan expectations accordingly – if there is a bit of a slowdown the last week of the year, can you get a jump on some of the cleanup in advance?  What is a realistic target for the year end close so management and external stakeholders such as banks, investors and auditors can plan?

We have seen the troublesome results of overlooking one or more of these items.  It can cost businesses vital cash flow, create challenges in decision making and lead to tax surprises.  With some planning and asking the right questions, companies and their leaders can end the year with just a little more holiday cheer.

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