8 Top Year-End Accounting Checklist Items (+ Free Templates)

Do you and your team get overwhelmed every time year-end rolls around? 

This problem is all too common for many accounting firms and teams. However, at Jetpack Workflow, we’ve seen how good workflows and processes can positively impact a firm’s productivity. 

We’ve found that a good checklist can help standardize the year-end tasks you repeat across all clients, helping ensure you complete every essential step without worrying about anything falling through the cracks. 

The following list includes 8 key tasks we think every firm should include in their year-end closing process. You’ll also find a free checklist template you can download and customize for your company. 

1. Review and Adjust Financial Statements

At the annual close, you need to thoroughly review the financial statements prepared by your bookkeeping team against the client’s general ledger accounts. 

This review includes the balance sheet, income statement, and cash flow statement. Only review these statements after adding all journal entries for the year into the ledger.  

The accuracy and completeness of financial statements are essential to business clients, both from a compliance standpoint and to give company leaders a transparent view of their financial performance for the year. 

Accounting teams should diligently review these statements to identify and correct any discrepancies before finalizing them. Pay special attention to typical year-end journal entry adjustments, such as depreciation, prepaid expenses, and unearned revenues. 

What to put on your checklist for this task:

• Compare financial statements with the general ledger.
• Adjust entries for depreciation, accruals, and deferrals as necessary.

2. Tax Planning and Preparation

Even though the tax deadline for the current calendar year isn’t until the following April, you can complete plenty of planning and preparation tasks before the end of the year. 

Naturally, no client wants to pay more in taxes than is absolutely necessary. So, proactive planning and strategizing throughout the year can help minimize your clients’ tax liability. That might include reminding clients to contribute to their retirement accounts, spend the money in their FSA accounts, and defer revenue until the next year, where possible.

Tax return preparation won’t begin until the new year. But, you can start to remind clients of the forms you need them to send you — including any W-2s, 1099s, or other tax forms — as soon as they receive them. 

Then, once tax season is in full swing, you can complete a more detailed review of client financial data to identify potential tax deductions and credits they might qualify for.

What to put on your checklist for this task:

• Review financial data to identify potential deductions and credits.
• Estimate tax obligations and recommend pre-year-end actions, such as additional expenses or contributions.

3. Ensure Compliance with Regulatory Standards

Another important year-end task is verifying that all financial reporting complies with common accounting standards, such as Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). 

Not every client is required to meet GAAP and IFRS guidelines; only publicly traded companies in the United States must adhere to GAAP. However, it’s still a widely accepted framework for reporting financial information, even for private companies. 

For example, you should verify that your clients’ financial statements are prepared according to the GAAP matching principle, where expenses are reported in the same period as the revenues they helped generate. 

If you detect any errors or discrepancies, make the necessary adjustments to ensure full compliance. 

What to put on your checklist for this task:

• Cross-check financial statements against regulatory guidelines.
• Make necessary adjustments to ensure full compliance.

4. Year-End Tax Reporting

The deadline for sending W-2s and 1099s to employees and contractors isn’t until January 31. However, your future self will thank you if you complete them as soon as possible in the new year. 

Gather client payroll records for the year to get started. Reconcile payroll data against your clients’ quarterly tax filings to ensure all data is accurate and complete. Adjust the general ledger as needed to close out the payroll account. 

Once you’ve verified the accuracy of client payroll records, you can prepare and distribute W-2s to all employees. That includes a summary of all earnings and withholdings. You must also submit a copy of each W-2 to the IRS and relevant state agencies.  

If your client paid contractors, you need to review all payments for the year to determine if you need to send them a 1099, and if so, what type. 

For instance, the current guidelines state that contractors paid $600 or more from a business during a given year should receive a 1099-NEC. Send the appropriate 1099 form to all eligible contractors and a copy to the IRS.  

What to put on your checklist for this task:

• Collect necessary information from clients’ payroll and vendor records.
• Prepare and file the appropriate forms with the IRS and other relevant agencies.

5. Budgeting and Forecasting for Next Year

A crucial step in the year-end accounting process is to help clients prepare a budget and generate financial forecasts for the upcoming year. 

Review clients’ current year budget and compare it against the actual performance to measure variances. Diving deeper into the cause of any variances can help you create realistic budgets and more accurate forecasts for the following year. 

Pair these insights with an assessment of historical trends to make accurate projections for cash flows, revenues, and expenses. These projections can help guide a client’s financial planning and decision-making.  

Maybe you expect the client to have higher revenue in the new year because they scheduled a price increase for their services. In this case, your accurate projections could help them feel confident about making a large purchase or investment, such as buying new equipment or increasing hiring activity. 

What to put on your checklist for this task:

• Analyze past financial performance to identify trends.
• Develop projections for revenue, expenses, and cash flow.

6. Finalize and Distribute Financial Reports

After you review the prepared financial statements for accuracy and double-check their compliance with relevant accounting standards, you can finalize the reports and distribute them to the appropriate stakeholders. 

The specific stakeholders who need to receive finalized financial statements can vary from client to client. Businesses commonly send year-end financial statements to their investors, the board of directors, and management teams. 

As required, send financial statements, tax filings, and audit reports to external stakeholders like the business’s creditors, regulatory agencies, and auditors. 

What to put on your checklist for this task:

• Compile and review finalized financial statements, tax filings, and audit reports.
• Send reports to shareholders, lenders, or regulatory bodies as required.

7. Close Out the Fiscal Year

Closing the books at the end of the year requires accounting professionals to review and reconcile financial transactions for accuracy and completeness. All new transactions recorded after the close get reported in the following period. 

If any final adjusting entries are needed to balance out accounts, this is when they should be done. That could include adjusting accounts receivable to reflect revenue you earned but have not yet been paid for. 

You also need to close out temporary accounts like revenue, expenses, and dividends at the end of the fiscal year. 

Finalizing the books can be one of the more tedious accounting processes. However, it helps ensure your reporting is accurate and reflects the business’s current financial position properly. 

What to put on your checklist for this task:

• Confirm all transactions have been recorded.
• Perform final reconciliations and close out temporary accounts.

8. Client Review and Sign-Off

You should also include a year-end review with clients as part of your end-of-year accounting checklist. This way, you can go over the completed tasks and reports, get the client’s approval, and sign off on financial statements and tax filings. 

Aside from the necessary administrative tasks, this review is also when you can discuss their overall financial health and address any questions or concerns they might have. 

This meeting lets you show clients where else you can add value, organically promoting any additional services you offer. 

For instance, if a business owner wasn’t pleased with their profitability for the year, you can recommend your budgeting and forecasting service (assuming they don’t already use it). These advisory services can help them create more realistic budgets and spending strategies to address their unique financial challenges. 

What to put on your checklist for this task:

• Present the final financial reports and recommendations.
• Obtain client approval and sign off on the financial statements and tax filings.

Free Templates: Weekly, Monthly, and Yearly Accounting Checklists

Rather than creating your year-end checklist from scratch, Jetpack Workflow has 32 free templates for bookkeeping and accounting firms, which you can download and use immediately. 

These templates can help you organize your general accounting workflows and the essential tasks you need to complete weekly, monthly, and yearly. 
 

Best Methods for Tracking Your Firm’s Checklists

You can use a few methods to keep track of your checklists and ensure you’re completing the necessary tasks. 
 

1. On Paper

The most basic way to create and track progress on checklists is to make them by hand with a pen and paper. While the simplest option, it’s not always the most convenient or efficient. 

Pros

• Free to create
• Easy to transport

Cons

• Making edits can be time-consuming
• Easy to misplace
• Difficult to share with the team

2. Google Doc or Spreadsheet

Another option for the digital age is to type out your checklist in a Google Doc or spreadsheet. While this can be more compatible with your existing workflows and easier to update, there are still some features that aren’t ideal for accounting firms. 

Pros

• Free to create
• Easy to share with your team

Cons

• No reminders 
• No accounting-specific features
• No premade templates

3. Jetpack Workflow

An ideal way for accountants to keep track of checklists and progress on client work is to use a workflow management system specifically designed for accounting firms. Jetpack Workflow is a leading solution that helps firms organize and scale client work and hit every deadline. 

Jetpack Workflow makes it easy for firms to track progress across all team members and automate deadlines for recurring tasks. It’s much more convenient than a paper checklist and has more industry-specific features and templates than Google Docs or spreadsheets, helping firms streamline their processes. 
 

 
Pros

• Dedicated accounting software
• Multiple pre-built templates
• Automated task reminders
• Easy to use with your team
• Detailed reporting
• Responsive customer service
• Unlimited integrations for easy adoption into your tech stack

Cons

• Very reasonably priced, though not free

Ready to find out how Jetpack Workflow can help your firm better manage its client work, track team assignments, and never miss a deadline? Learn more here.