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Your 2021 Year-End Accounting Checklist

Unwrapping our Gift to You this Holiday Season

It’s December. The holidays are upon us. Employees are requesting time off. Clients still need attention (and often, more of it). You’re trying to juggle your own personal obligations and family time. There’s no doubt about it – it’s a busy month, likely filled with stress at a time we all attempt to de-stress. In all the haste though, be sure not to forget your year-end processes and wrap up (pun intended) the new year the right way.


December is the final month of the fiscal year for many companies. The irony is not lost on us that the accompanying onslaught of year-end closing processes that are crucial to a company’s success comes during one of the busiest workload periods. Because of this, many wait too long. They figure they’ll just take care of it in January – bring on the eggnog! But, if you don’t think about bookkeeping and tax planning until the new year, make no mistake, you’re too late. You want to be able to strategically think about your tax situation prior to placing that 2022 calendar on your desk.


So, before you start your New Year’s Eve countdown and make your resolutions, make sure you don’t count out this Year-End Accounting Checklist.

It’s year-end, time to review employee and contractor information for the whole year.

It’s crucial to have accurate employee and contractor information, including contact information, to send out W-2s and 1099s in January. During your review, ask yourself:

  • Is everything accurate?
  • Have there been any changes?
  • If employees left during the Great Resignation or otherwise, where are they now?
  • Do we have all EINs and SSNs?
  • If we’ve offered employee bonuses, have we set aside the proper withholding tax?
  • Do the payroll tax liabilities match our quarterly payroll returns?

Review and balance all financial statements and subledgers.

Simply, you cannot forecast your financial future without first examining your financial present and past.


Profit and Loss.

Ensure all income and expenses are recorded and updated in your accounting software — if you want to have tax-deductible expenses, your accountant needs to find them. Pay close attention to discrepancies and bring them up with your accountant as soon as possible. Additionally, organize all business receipts.


Balance Sheet.

Pay specific attention to your inventory (if you have it) and equity accounts. You don’t want to start the new year with empty shelves or shelves filled with expired goods. This not only helps you understand the value better, but also helps to develop a better plan for next year. Ask yourself:

  • Do we have an accurate inventory count?
  • Do the totals match our balance sheet?
  • Are fixed assets up to date?
  • Were there owner distributions or contributions during the year? If so, ensure that they were recorded correctly in the equity accounts.

Accounts Receivable.

You should try to collect any money owed to the business before the end of the year. Send reminders and be professional and positive, but firm. If necessary, offer payment plans. Be prepared to write off unpaid invoices as bad debt, if needed.


Accounts Payable.

Do you have any unpaid bills outstanding? Pay everything you can to start the new year with a fresh start. Pay all open bills from vendors and pay contractors for completed jobs. It’s about more than getting caught up on payments though. Reviewing your accounts payable presents an opportunity to review vendor contracts and negotiate better terms. If you don’t look at ways to save the company money next year, no one else will. Questions include:

  • Are there any other options?
  • Are there hidden cost savings?
  • What does the competition look like?

Reconcile bank and credit card statements.

You want to confirm that your accounting records match your bank accounts as soon as possible. Compare your statements to your accounting records, and again, look for any discrepancies.

Determine Paycheck Protection Program (PPP) impacts.

If you received a PPP loan, has it been forgiven or is it still outstanding? Keep in mind you may not know the answer to this question because it can take up to five months for a final determination. This uncertainty lends itself to futures scenario planning. Think about the various circumstances so you are prepared in the coming months — if it’s forgiven 100%, if it’s forgiven partially, and if it’s not forgiven at all. How does each impact your business?

Year-end financial technology considerations.

Technology has never been as important as it has been over the past nearly two years. Technology kept businesses running and employees connected. When you reviewed your P&L, you likely noticed that you’re spending more on it than ever before. But is this increase in technology also being applied to your financials? Are you asking yourself:

  • Is our financial technology up to date?
  • Have we switched over to the cloud, where there are automatic backups?
  • What does your accountant use and prefer?

Review applicable tax deadlines.

Is your return due in March or April? Will you be filing an extension?

Consider the last day to make IRA contributions.

You want to make sure you are taking full advantage of the opportunity to save for your retirement. You can contribute $6,000 to an IRA for 2021, plus an additional $1,000 catch-up if you are age 50 or older. 2021 IRA contributions can be made until April 15, 2022.

Consider the last date for self-employment tax.

The final quarterly estimated tax deadline is on January 18, 2022. Ensure you file by this date to avoid any penalties.

Year-end closing entries.

If you use Quickbooks, closing entries will automatically be made for you. However, if you aren’t using Quickbooks, you must close out temporary accounts – all revenue and expense accounts, also make sure to include depreciation entries.

Backup all information, files, and reports, and close your books.

Create a backup company file or export data. Provide all necessary data to your accountant, along with any questions you have.

There’s no doubt about it — you want your books organized and up to date as you turn the page to the new year. There’s also no doubt that it will take some work. But when these processes are done correctly, it will leave even more time to spend with your families, which for many will mean even more this year.


If you’re struggling with your year-end close or reviewing your financials, we can help. At Agile Planners, we understand the many responsibilities that business owners have, and that their time is generally scarce. We can provide you with CFO, bookkeeping services, and training. As a one-stop shop to fill all types of accounting needs, we take over bookkeeping and accounting tasks, integrate technology systems for optimal performance, and provide consulting services to develop a strategic plan for your business to grow and reach its goals. We’ll take care of the nitty-gritty so that you can focus on the bigger picture: running your organization. Contact us today to learn more about how we can help you with your month-end close process.

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