As the year draws to a close, small business owners have a unique opportunity to take stock of their financial health and set the stage for a strong start to the new year. Year-end is more than just closing the books—it’s about ensuring your financial strategy aligns with your goals, minimizing tax liabilities, and making informed decisions for the months ahead.
Here’s a practical year-end financial checklist to guide you through the process.
Begin with a comprehensive review of your income statement, balance sheet, and cash flow statement.
Look for:
This review helps identify opportunities to improve profitability or reduce costs—and gives you an accurate picture of where your business stands today.
Before closing the year, make sure all bank accounts, credit cards, and loans are reconciled.
This ensures that every transaction is accounted for and that your books accurately reflect your financial activity. If discrepancies arise, address them now rather than during tax season.
Collecting outstanding receivables and paying overdue invoices helps strengthen cash flow and improves your business’s financial presentation.
Confirm that all employee and contractor information is up to date and accurate.
You’ll need correct data for year-end forms such as W-2s and 1099s, as well as any relevant tax filings. This is also a great time to review compensation structures, bonuses, and benefits for the upcoming year.
A proactive tax review before year-end can help minimize your liability.
Consider:
A fractional CFO can work with your tax advisor to forecast your tax position and identify planning opportunities before December 31.
Compare your actual performance to your budgeted projections. Where did you exceed expectations, and where did you fall short?
Use these insights to build a data-driven forecast for the next year. Updating your budget now allows you to start January with clear direction and measurable goals.
Cash flow is the lifeblood of your business.
Are your accounting tools, software, or workflows serving your needs effectively?
Year-end is the perfect time to streamline systems, adopt new technologies, or outsource time-consuming financial tasks—such as bookkeeping, payroll, or CFO oversight—so you can focus on growth.
Financial data is only useful when tied to your broader strategy.
Review your key performance indicators (KPIs) and ensure they still align with your long-term goals. Update metrics to reflect the areas that matter most for your business in the coming year—whether that’s profitability, efficiency, or scalability.
Finally, use your year-end review as a springboard for growth.
Set strategic objectives, identify investment priorities, and establish a plan to track progress. Whether it’s expanding your team, exploring new markets, or improving margins, a well-defined financial roadmap will help you move confidently into the next year.
Completing a thorough year-end financial review helps you close the books cleanly and start the new year from a position of strength. With the support of a fractional CFO, you can turn data into insight—ensuring that your business decisions are informed, strategic, and aligned with your goals.
If you’d like guidance on preparing your year-end financials or planning for the year ahead, our team can help you build a clear and actionable financial strategy.
