Year-End Best Practices for Bookkeepers

for bookkeepers Jan 01, 2024
bookkeeping business



Happy New Year, friends!

Today, I want to go over one of the most important practices you should incorporate into your bookkeeping business to wrap up a successful year: the year-end review.

I’ve talked about this a bit before, but it’s a new year, and I’m sure some of you are new—and even if you aren’t, it never hurts to go over it again!



The End-of-Year Crush

There is a lot of year-end work that comes with a bookkeeping business: the review of the prior year, getting everything ready for your client's tax preparers, and the 1099 rush, to name a few.

The good news is that the year-end crush of running a bookkeeping business is pretty much over by the end of January. But in the meantime, there are definitely things that you need to be reviewing and checking for.

I'm going to give a high-level overview of what your bookkeeping business’s year-end review should include, then I’m going to share a resource you can use to dive in deeper.

If you need any guidance at all on this year-end portion of running a bookkeeping business, or if you’re afraid that there’s something important you’re missing simply because you don’t know what you don't know, trust me—you're going to want to invest in this resource.


What to Include in Your Year-End Review

This is stuff that you can do in your bookkeeping business before the first of the year, but you also can wait until afterwards for most of it.

However, some of this does need to be done in December, so here’s what I recommend doing before the end of the year:


Closing Out Owners Distributions and Contributions From the Prior Year to Retained Earnings

This post is going up January 1st, 2024. That means that if you haven't already done it, you want to make sure that your 2022 distributions and contributions were closed out to retained earnings. (If you don't know what I'm talking about, we break this all down, including a cheat sheet, in my Year-End Workshop for Bookkeepers, which I’ll talk more about later.

You may have already done this, but you should confirm whether you have or not—and if you haven’t, get it done ASAP.


Determine Necessity of 1099 Filings

The second thing to do at year-end in your bookkeeping business is to determine if 1099s need to be filed.

In the Year-End Workshop, we’ll go over all of those requirements, and you’ll get a general idea of the questions that you need to ask to determine if 1099s need to be filed.

We’ll also talk about how to help your clients pay their contractors in ways that won’t require them to file 1099s. But if you do need a 1099, we also cover the simplest software and the best practices for how to get that information after the fact.


Request W9s

Your clients should be getting W9s up front before they start paying contractors, but most business owners mess this up. So, if you decide 1099s need to be filed, then you need to figure out if the clients have W9s on file; if not, you need to start requesting them.

I recommend doing that early because requesting W9s can be one of the things that takes the longest. You're asking people to do something they may not be familiar with at the holidays.

Additionally, those forms ask for personal information that they may not want to give because now it's after the fact, and they might not want to receive that 1099. That's why your clients should be getting these up-front.


Review S Corp Payroll

If the owner is an S Corp, you’ll also want to review some payroll things.

You want to check on whether payroll is fully covered by their tax preparer; that would be great, but that’s not always the case. I tend to have a hand in some of my S Corp clients’s payroll.

If they are an S Corp owner and an employee of the company, you may need to confirm or add in their health insurance premiums to their W2 at the end of the year. You may need to make an auto fringe adjustment. You may need to help them with running a bonus payroll. Those are some things that could come up with payroll at your end, and it's important to know if that stuff applies to them.



What to Do in January

Come the new year, you’ll have a few more things to do…


Filing 1099s

In January, you will be filing those 1099s if they're needed. The deadline for that is January 31st.

This makes January very busy as a bookkeeper, because you need to make sure that the books are done for December, right? We’re normally doing December books in January, but you've got to get those totals correct for the year, so you have to have them done before you file 1099s.

This is also where having the head start on the W9s is going to be helpful.


Review Final Payroll

The second thing that you'll do come January is review the final payroll reports and make sure that the data is correct in the bookkeeping software.

This is a little bit different than the payroll review that you'll do in December, because now payroll is final.

You want to make sure that payroll is in the correct accounts within your client's P&L or balance sheet; if you're lumping payroll all together, you're doing it wrong. It is not all payroll expense. If you're doing that, chances are you probably need to learn quite a bit about bookkeeping.

For your bookkeeping business’s year-end process, even if you've been coding P&L properly, you really want to scrub that data and run reports and make sure that your wages are correct, your officer's comp is correct and in the right bucket, your contractor payments are specifically stated as contractor payments (this will help with the 1099s!), and that your payroll tax expense is correct for the deductible portion for the business.


Review P&L

The third thing that you'll do in January is ensure that your P&L sheet is accurate.

You want to look at this in detail and make sure nothing's uncategorized and that it looks and sounds right.


Reconcile Balance Sheet

The fourth thing you want to do is ensure that the balance sheet is fully reconciled. You're going to want to pause and run that balance sheet, make sure that all of the accounts are reconciled, and review anything else that sits on the balance sheet to make sure that it ties to some sort of source document or is an accurate number.


Check Accuracy of Loan Accounts

Last but not least is to ensure that your loan accounts are correct. Make sure that you've actually split out principal and interest for any loans, gotten statements, and tied your principal balance on the balance sheet to the last loan document for the year.



The Year-End Workshop for Bookkeepers is Available NOW!

If you want to take this high-level checklist one step further and really understand these concepts, then you want to get my Year-End Workshop for Bookkeepers!

This is an amazing, invaluable resource that will help you continue to complete this review efficiently year after year. It's a two-hour on-demand workshop, and it covers everything that you need to know at year-end for your bookkeeping clients.

It goes through this list in more detail, but it also includes a Google sheets template to help you stay organized and save time, as well as other surprise bonus resources.

The great thing about this is that you can copy this resource year over year in your bookkeeping business. I used it last year, and I made a copy for myself to use again in my bookkeeping business this year. It has significantly reduced my stress levels because I can visually see what needs to be done, and all I had to do was make some updates and change some client info.

In this workshop, you’ll also hear from Karen Bahn, an amazing CPA who hosted this with me last year.

She has almost 10 years of private and public accounting experience—in fact, she’s my CPA, so you know she’s good at her job—and she speaks more deeply on the tax issues involved in the year-end review, including how to communicate with the client’s CPA to ensure that the client is well-served.

And if you’re reading this prior to January 7th, 2024…I have even better news for you.

As a special New Year's bonus, from January 1st to January 7th, 2024, you’ll get two bonuses: you’ll get the Intention Setting and Calendar Planning Workshop, which is another on-demand resource to help you set your intentions for 2024 right from the start, and you’ll also get access to a live watch party and Q&A session being held on January 8th, 2024!

All you have to do is purchase the Year-End Workshop, and you’ll automatically receive the Intention Setting workshop for free. You don’t have to do anything to receive it—the system will get it to you automatically, as well as an email with all the details for the live watch party.

I can’t wait to see you there. Let’s get 2024 started off on the right foot!



Purchase the year-end workshop by 1/7/2024  to gain access to bonus templates, surprise resources, and a live watch party: 

To see the entire workshop library and find more resources for your bookkeeping business, visit now!

Need to boost your bookkeeping basics? Join BABs now: 

If you have enjoyed this post, head on over to Instagram, share your IG stories, and tag me: @orderlyaccountingbykatie




Subscribe to my email list: