Do This Business Finance Checklist (That Future You Will Love)

Year-end finance checklist graphic for reviewing cash flow, quarterly tax payments, early payment discounts, and business model decisions before December 31.

A business finance checklist is one of the simplest ways to launch and maintain a healthy business, and at year-end it becomes especially valuable.

What you do between now and December 31 can lower your tax bill, improve cash flow, reduce January chaos, and set you up for a calmer, more profitable new year.

If you’re a small business owner or solopreneur earning under $1 million and want tighter control over your money, this practical checklist will help you close the year strong with smarter timing on income and expenses, cleaner books, and fewer tax surprises.

I’ll walk through the key financial moves to make now, including cash timing for cash-basis accounting, invoicing and collections, deductible expenses, charitable giving, retirement contributions, credit card consolidation, account reconciliations, and bookkeeping cleanup.

I’ll also share the simple year-end move I make every single year that saves me hours when it’s time to reconcile and file.

Quick links if you want to jump straight to tools and templates I mention:

Why Year-End Timing Matters for Cash Flow

Most small businesses file on the cash basis. That means:

  • Income is taxed when the cash hits your bank, not when you send the invoice or do the work.
  • Expenses are deductible when you actually pay them, not when you receive a bill.

Because December 31 is a hard cutoff, a payment that clears on December 30 lands on this year’s return. The same payment clearing on January 2 lands on next year’s return. That difference can mean thousands of dollars in tax timing.

A Simple Framework: Should You Pull Income Forward or Push It Out?

  • If you expect to be in a lower tax bracket this year than next, it can make sense to collect more income now (and consider delaying optional expenses).
  • If you expect to be in a higher tax bracket this year than next, consider delaying income (if ethical and reasonable) and accelerating deductible expenses into December.

Pro move: Don’t fixate on “lowest taxes this year.” Think about two years together. The right move is the one that lowers your combined tax over both years (and protects cash flow).

Year-End Checklist Item #1: Tune Your Cash Timing (Legally & Logically)

1) Collect What’s Owed—On Purpose

  • Send/refresh invoices now, and add clear “pay by” language if this year is your lower-tax year.
  • Offer easy payment options (ACH/credit card) to reduce friction.
  • Follow up on past-due with a friendly nudge and direct payment link.

If next year will be your lower-tax year, you don’t have to chase payment quite as hard the final week—but always communicate professionally and never mislead clients. (Cash flow still matters more than tax timing.)

2) Pay What You’ll Pay Anyway

If this year is your higher-tax year next year, pull forward expenses you will incur regardless, and review upcoming expenses with a simple budget so you can spot cost-cutting opportunities before year-end:

  • Necessary subscriptions (annual plans often save 10–20%)
  • Software you’re keeping anyway (bookkeeping, CRM, hosting)
  • Training or professional development already planned
  • Office supplies you’re low on
  • Prepaid services (only if they make operational sense)

Use accounts intentionally. Tools like Relay let you set up multiple business bank accounts (Taxes, Profit, Owner Pay, Opex) and even implement a Profit First-style five-account system to better manage business finances and make sure enough funds are set aside for bills.

It’s an easy way to cap your spending, add opportunity, fun, and impact accounts, and protect tax money.

Open a Relay account with an exclusive deal.

Mike Michalowicz is the creator and author of Profit First. Profit First is a registered trademark.

You can purchase Profit First here.

3) Don’t Manufacture Expenses You Don’t Need

Spending $1,000 to “save taxes” only saves you the tax on that $1,000—not the entire $1,000. If you’re in a 22% bracket, that’s $220 saved…but $780 out the door.

Spend purposefully by managing costs, not just chasing deductions.

Year-End Checklist Item #2: Charitable Giving (Know Where It Counts)

If you operate as a pass-through (sole prop, single-member LLC, partnership, S corp), charitable giving is typically deducted on your personal return—not your business P&L. Two key implications:

  • For 2025, you generally need to itemize to get a federal deduction for charitable gifts.
  • Looking ahead to 2026, there is scheduled to be a small above-the-line write-off available even if you don’t itemize (keep an eye on the rules as you approach that year).

Optimize Your Donations

  • Give cash or appreciated assets (stock/funds) where appropriate; appreciated assets can avoid capital gains and still give you a deduction.
  • Get receipts dated by December 31.
  • Consider a Donor-Advised Fund (DAF) if you want the deduction this year and the flexibility to grant over time.
  • Track donations separately from business expenses if you’re a pass-through—you’ll hand these totals to your tax preparer for your personal return.

Year-End Checklist Item #3: Retirement Accounts (The Tax Shelters We Love)

Retirement accounts are one of the smartest ways to reduce taxable income without “losing” the money and to complement a strong business tax estimating system. You’re moving money from “taxable now” to “tax-deferred” or “tax-free later.”

Common Small-Business Options

  • Traditional IRA – Simple; lower contribution limits; often deductible.
  • SEP IRA – Higher limits; great for solopreneurs with no employees.
  • Solo 401(k) – High flexibility and limits; can include Roth and employer contributions.

Deadlines vary:

  • Some plans must be set up by 12/31 to contribute for this year.
  • Others may be established and funded by the tax filing deadline (sometimes including extensions).
  • Solo 401(k) setup deadlines have tightened in recent years—don’t wait to research.

Which to use this year?

  • Higher tax bracket this year → favor Traditional/Pre-Tax contributions.
  • Lower bracket this year (expect higher later) → consider Roth contributions.

If you’re unsure, split the difference: contribute to both pre-tax and Roth where allowed. And talk with a financial planner/CPA about your specific numbers.

Business finance checklist graphic showing a person reviewing documents with a calculator to plan cash flow, tax preparation, and working capital before year-end.

Year-End Bonus Move: Zero Out Your Credit Cards & Consolidate Balances in Your Business Bank Account

This one is for your sanity (and your future reconciliation):

  • Pay off business credit cards a day or two before year-end so payments clear by December 31 and keep your business accounts clean at year-end.
  • Empty “holding” accounts (PayPal, Stripe, Venmo for Business) into your operating bank account so your cash is sitting in one clean place on 12/31.
  • If you use multiple accounts, sweep to your primary business checking account at year-end; a dedicated business bank account helps separate personal finances from business activity.

Why I do it every year: When your card statements show $0 balances at year-end and your payment processors show $0 payable to you, reconciling is dramatically faster. Your balance sheet is tidy, and you avoid the “this charged on Dec 29 but the payment posted Jan 2” spaghetti.

Want a bank that makes sweeps and sub-accounts easy? Check out Relay (the envelopes/Profit First lovers’ dream).

Jamie Trull's Accounting quiz to help you find the best software for your business.

Optional But Powerful: A Quick Books & Records Cleanup

Even if you’ll do most of the heavy organizing in January, these 60–90 minute tasks in December will reduce headaches later.

1) Catch Up a Simple P&L and Financial Statements (Fast)

Use this simple checklist to catch up your books fast: you can build a clean Profit & Loss for the year in under an hour with my spreadsheet, which I also recommend as a powerful alternative to full bookkeeping software:

  • Download CSVs from your bank/credit card.
  • Paste date/description/amount into each month.
  • Categorize with dropdowns.
  • Run the built-in cash reconciliation to be sure you didn’t miss or double count.

Generate monthly financial statements, including a balance sheet and income statement. Key financial documents to review here include the profit and loss statement, balance sheet, and cash flow statement so you get a clear picture of your financial health; review your loss statement and cash flow report too.

2) Run a 10-Minute “Sniff Test”

A quick monthly review helps you monitor your finances regularly and catch issues before they worsen.

  • Does revenue feel right (not wildly low/high)? Check simple metrics like revenue growth or profit margins to confirm the business is in good shape.
  • Any negative expense lines (often refunds coded as expenses)?
  • Are subscriptions steadily consistent?
  • Are Meals separated correctly (typically 50% deductible)?
  • If you collect sales tax, confirm liability balances match filings.

3) Document Big Stuff

Jot a one-page Year-End Notes summary to help prepare tax documents and organize records for tax purposes before tax season gets hectic:

  • Major purchases > $2,500 (might be depreciated or expensed depending on policy)
  • New loans, ownership changes
  • ERC/PPP or special credits (if applicable historically)
  • Total mileage or home office details
  • Charitable contributions totals
  • Anything unusual (e.g., a one-time settlement payment)

File it with your P&L and bank statements. Annual record-review tasks are easier when you plan ahead for tax time and tax day, especially before April 15. Your future self (and your CPA) will be so grateful.

Set Up January to Win: A 20-Minute Weekly “Money Monday”

I swear by this routine for a small business owner who wants to stay current and keep managing business finances consistently without the scramble:

Every Monday:

  1. Categorize last week’s transactions (spreadsheet or software).
  2. Move cash to Taxes / Profit / Owner Pay accounts (Relay makes this easy).
  3. Pay due bills; schedule the rest.
  4. Check this month’s P&L and other financial statements for surprises as part of regular cash-flow management.
  5. Capture receipts for anything audit-sensitive (meals, travel, big purchases).

Many business owners also benefit from a quarterly checkup to revisit business goals.

That’s it. 15–25 minutes. Done consistently, you’ll never “fall behind” again.

Should You Start—Or Switch—to Bookkeeping Software?

For many small businesses, the question isn’t if you need software but when to move from spreadsheets to a dedicated platform; understanding when you really need accounting software and exploring detailed reviews and comparisons of top tools can help you manage your finances more efficiently by tracking income and expenses and choosing the right time and system.

If you:

  • Are a corporation and need a formal Balance Sheet,
  • Have inventory, multiple loans, or high transaction volume,
  • Need invoicing, A/R, A/P, multi-user access, and bank rules, where automation reduces manual work and helps maintain accurate records,
  • Want deeper analysis or tracking categories,

…it’s likely time to move to accounting software for the new year. I compare leading small business accounting options and share deals here.

Tip: Use my P&L spreadsheet to finish this year cleanly, then start fresh in software on January 1.

It’s the least painful transition, especially when you pair it with a curated toolkit of small-business finance tools to streamline everything else.

Small business finance checklist graphic showing a person reviewing financial paperwork and using a calculator before making year-end decisions about purchasing equipment.

A Sample Year-End Action Plan (Pick Your Path)

If this year is a lower bracket than next year:

  • Encourage December payments (send updated invoices now).
  • Delay optional expenses until January.
  • Max Roth contributions where allowed.
  • Still execute the credit card payoff + consolidation for clean books.

If this year is a higher bracket than next year:

  • Don’t chase year-end payments as aggressively.
  • Pull forward expenses you’ll pay anyway (only if operationally smart).
  • Favor pre-tax retirement contributions.
  • Still do the credit card payoff + consolidation for clean books.

For everyone:

Helpful Resources (Deals/Bonuses)

  • Business Banking That Supports Profit First-Style Flows:
    ➤ Open sub-accounts for Taxes, Profit, Owner Pay, and Opex; automate transfers so you protect profit by default.
  • Choose (or Switch) Your Accounting Software:
    ➤ I break down options (and I’ve negotiated discounts).
  • Build a More Profitable Business (Book + Bonuses):
    ➤ Learn how to uncover and keep the money you’re leaving on the table.

Final Word: Don’t Let the Calendar Decide for You

Year-end isn’t about panic spending or playing shell games—it’s about intentional timing, clean records, and protecting your profit. Do a few smart things now, and future you will enter January with clarity, confidence, and cash.

You’ve got this. And if you want company while you do it, I’m right there with you each week on the channel. Subscribe, say hi in the comments, and tell me: What’s one year-end move you’re making this week?

Disclaimers

Some links above are partner or affiliate links, which may provide me with a commission or bonus at no additional cost to you. I only recommend tools I use personally or genuinely believe will help small business owners.

This article is for educational purposes only and is not tax, legal, or accounting advice. Tax rules can change and individual circumstances vary—please consult your tax professional or financial advisor for guidance specific to your situation.

Video: https://youtu.be/a3gBTEsfRjY

Transcript Disclaimer: This transcript was generated from the video for your convenience, but it may contain typos or slight errors due to the transcription process. For the most accurate and complete information, we recommend watching the full YouTube video.

How To Strengthen Your Business Finances Before December 31

It's nearing the end of the year, and what you do between now and December 31st can make a huge difference. We're talking thousands of dollars in taxes and hours of stress that you can eliminate if you follow this simple checklist. And whether you've been on top of your books all year long or you are still needing to catch up, this checklist will help you.

And make sure to stick around until the end because I'm gonna give you my extra bonus tip of the one thing that I always do before the end of the year and future. You will. Thank you for doing the same. Okay. Hi everyone. I'm Jamie Trell, CPA, and Financial Educator, and here on this channel I love to give you all the things you need to stay informed, organized, and profitable in your business finances.

So please, please, please make sure to subscribe today, I'm gonna share with you my own year-end checklist that I go through in my business to make sure that I am set up for a strong January. And whether you've had a great year or a tough one, now is the perfect time to pause, reflect, and get strategic.

So checklist item number one is to understand cash basis accounting. Now, most of you are probably on the cash basis of accounting for taxes. What that means is that you are taxed when the income actually comes into your business, which may or may not coincide with when you actually earn it. So that means that if you've, let's say, done work for a client and whether you've sent an invoice or not, you'll actually not recognize that as income until you actually receive the money.

Manage Cash Flow and Short Term Tax Timing

So this typically for the rest of the year doesn't really make a huge difference. However, timing matters when we're talking about the end of the year because that means that income could either land this year. Or it could land next year, just depending on when that cash actually hits your bank statement.

And similarly, the same goes for expenses. So if you are deciding when to spend money, it can make a big difference for your taxes, whether you choose to spend it this year before the end of the year. Or wait until even just the first of next year. Now, you may think that the best strategy to reduce taxes is going to be to delay income, right?

So maybe not collect on those outstanding invoices until next year and perhaps move forward some expenses that you can deduct this year on your taxes. And that's a really common strategy, especially if you expect that this year you're gonna be in a higher tax bracket than you expect to be. Next year.

However, if you expect your business to be growing significantly next year, you might actually want to do the opposite. Maybe this year's tax bracket is especially low for some reason, and therefore it makes more sense to collect more income this year and to delay those expenses. So this is a really great time to be looking at this year and what you expect for next year, and to consider that timing and what's gonna make the most sense overall from a tax perspective.

Again, don't over index on just this year's taxes because that may come back to bite you next year.

Charitable Contributions and Your Personal Tax Return

Now the second thing on my Yearend checklist is to make charitable contributions before the end of the year if I want those to be part of my taxes for this year. Now, importantly. Even if you're making these contributions from your business, it's important to note that if you are a pass through entity, meaning you are a sole proprietor LLCS corporation and not a C corporation, then these charitable deductions actually get passed through to your personal income taxes.

They are not deducted from your business. So the negative part to that is that you're not gonna necessarily get the full benefit of all of your charitable deductions unless. You itemize. Now, if you're watching this in 2025, unfortunately you do need to itemize in order to be able to deduct your charitable contributions.

That means if you take the standard deduction, because that's better for you, you're not really gonna get a specific benefit for those charitable deductions. However, starting in 2026, you will be able to deduct $1,000 if you're single or $2,000 if you're married, even if you don't. Itemize. So I think that's a positive change that came from the one big beautiful bill that does allow you to get at least some credit for charitable contributions that you make.

Now, if you typically make large contributions to charitable organizations in a year, either personally. Or via your business, maybe you're a mission driven business. I know our business gives 10% of profits to charitable organizations each year, and if that's the case for you, you probably want to get strategic such that you can get the most credit for that on your taxes, which of course then allows you to give even more.

A Business Plan for Retirement Contributions

And the third thing that should be on your end of year checklist is to be making sure that you have retirement accounts set up that you can contribute to. I am a huge fan of using retirement accounts to help your tax situation. This is a great opportunity to be able to still keep the money right, but.

Not have to pay taxes on it. So if you have any kind of traditional IRA plan, or maybe you have a SEP IRA, or a solo 401k, you wanna be looking at making sure you have that account set up by the end of the year. Now, in some cases, you may need to make those contributions before the end of the year for them to count.

In other situations, you may be able to wait to actually make the contribution for this year and just ensure that you're making it before you file your taxes. Next year, but you wanna know the rules for the specific plan that you have. And again, this is especially useful if you are in a year where you're in a higher tax bracket.

Now I actually have two different retirement accounts. One of them is more of a traditional plan where I get to deduct it for taxes now and not pay taxes on those amounts. And the other one is a more. Roth plan, which is one where I do pay taxes now, but it grows tax free, and I think it can be a good idea to have both of those and then decide what makes the most sense for you to contribute in a given year.

Make Informed Decisions Based on Your Financial Health

Again, if you're in a higher tax bracket, then a traditional plan may be more attractive, but. For some reason, if you have a lower tax bracket this year than you expect to in the future, it could make sense to go with a Roth. But if you're in a situation where you actually have a lower tax bracket than usual this year, maybe it just wasn't a good year overall, then contributing to a Roth may make more sense for you.

And this is one of those areas where I definitely recommend talking to a financial advisor if you can. So those are the three main things that are going to make the most sense to do before the end of the year because timing. Really matters. However, I have one more thing that you wanna consider doing before the end of the year, more to save your sanity than to save on taxes.

So my bonus tip is to actually pay off all of your credit cards before the end of the year, preferably maybe like a day or two before to make sure that those payments hit in the current year. Now, that is not required by any means. But let me tell you, when you're going to reconcile your accounts at the end of the year, you are gonna be so glad that you did it.

I know for me, trying to reconcile out my credit cards is a bear. My credit card statements don't match the end of the year. I'm trying to figure out how to make sure that everything was recorded properly, and when they are all zeroed out, it is so much easier.

Consolidate Business Spending in Your Business Checking Account

And in addition to paying off those credit cards, I highly, highly recommend transferring money out of those third party services and really trying to consolidate where your money is.

So for example, if you have money in PayPal and Venmo and in all kinds of different places, consolidating that into one bank account will again make reconciliation. So much easier. We don't want money sitting in no man's land or hanging out in Stripe. We want it in our bank account by the end of the year.

As an accountant, I absolutely adore a clean balance sheet at the end of the year, and your future self will thank you as well. Now, if you're wondering what you should do at the beginning of next year, well make sure to subscribe to the channel because I'm gonna be doing a video soon about what you should be doing as soon as the new year hits.

And if you wanna get a jumpstart on organizing your finances now, then check out this video next where I walk you through how to get it organized fast. And if you're looking for affordable resources to help you get organized and or save on taxes, make sure to check out JamieTrull.com/shop. Happy New Year and we'll see you next time.

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