Year-End Financial Checklist: 7 Steps Every Small Business and Non-Profit Should Take Before December 31

As 2025 comes to a close, small business owners and non-profit leaders alike are balancing day-to-day responsibilities with year-end deadlines. It can feel overwhelming—but a clear financial checklist makes the process easier.

At Truly Bookkeeping, we’ve put together a year-end financial checklist for small businesses and non-profits to help you close the year with confidence and prepare for a strong start in 2026.

Want a printable version? Download our free Year-End Financial Checklist here.

1. Reconcile All Accounts

Before closing the books, make sure every account is reconciled. This includes:

• Bank accounts
  
• Credit cards
  
• PayPal, Stripe, or other payment processors
• Loan accounts or lines of credit
  

What does “reconciling” mean?
Reconciling your accounts simply means making sure the records in your bookkeeping software (like QuickBooks or Xero) match your bank or credit card statements. For example, if your software shows a $125 expense but your bank reflects $150, you know there’s an error to investigate.

Helpful instruction: Pull your monthly bank and credit card statements, then compare them to your accounting software reports. Review line by line until every transaction matches, and make adjustments for missing, duplicate, or miscategorized entries.

Small businesses: Ensure no personal expenses slipped into your business accounts.
Non-profits: Double-check donor deposits and restricted vs. unrestricted funds.

2. Review Outstanding Invoices and Accounts Receivable

Cash flow is especially important at year-end. Review:

• Open customer invoices
  
• Unpaid donor pledges or grants
  
• Vendor credits that may not have been applied
  

Small businesses: Send reminders for any overdue invoices.
Non-profits: Confirm pledges or grant funding are properly recorded, even if the cash hasn’t yet been received.

3. Categorize and Clean Up Expenses

Take time to ensure your expenses are categorized correctly—it will save time during tax season.

• Review expense categories in your accounting system.
  
• Correct any miscategorized items.
  
• Flag deductible expenses for your accountant.
  

Small businesses: Pay close attention to subscriptions, mileage, and office expenses.
Non-profits: Confirm program expenses and administrative costs are clearly separated for accurate reporting.

4. Double-Check Payroll and Contractor 1099 Info

Payroll and contractor records need to be accurate before the year closes.

• Verify employee W-2 information (name, address, SSN).
  
• Confirm contractor information for 1099s, including addresses and Tax ID numbers.
  
• Run year-end payroll reports to confirm totals.
  

Small businesses: Ensure W-9s are collected for all contractors earning over $600.
Non-profits: Apply the same rules and pay attention to grant-related stipends or contractor payments.

5. Review Budget vs. Actuals for the Year

Compare your actual results against your planned budget:

• Where did spending exceed expectations?
  
• Did revenue meet, exceed, or fall short?
  
• What patterns or lessons can be carried into 2026?
  

Small businesses: Use this analysis to adjust pricing, offerings, or expense management.
Non-profits: Use this review to strengthen board reporting and grant applications.

6. Prep for Tax Season

Get organized now rather than scrambling in the spring.

• Collect receipts and supporting documentation.
  
• Organize deductible expenses.
  
• Review with your accountant whether any end-of-year purchases or contributions could improve your tax position.
  

Small businesses: Consider charitable donations or pre-paying deductible expenses before December 31.
Non-profits: Ensure your records are aligned for Form 990 preparation.

Quick note: Form 990 is the annual IRS information return that most tax-exempt organizations must file to remain compliant. It’s a public document that provides a snapshot of your non-profit’s financial health and operations.

7. Meet with Your Bookkeeper, Accountant, or CFO

Do not head into year-end alone. Meet with your financial partner to:

• Review reconciliations
  
• Finalize tax strategies
  
• Forecast cash flow for 2026
  
• Confirm compliance requirements are met
  

At Truly Bookkeeping, we combine bookkeeping, accounting, and CFO-level insights, so you don’t need to juggle multiple providers.

The Bottom Line

Year-end doesn’t have to feel overwhelming. By following this year-end financial checklist for small businesses and non-profits, you’ll close out 2025 with clarity and set yourself up for a strong start in 2026.

Download your free Year-End Financial Checklist here.

At Truly Bookkeeping, our all-women team supports small businesses and non-profits at every stage—from daily bookkeeping to high-level financial strategy—so you can focus on what you do best.