Review checklist book
Review Checklist

A comprehensive checklist to organize your year-end tasks and wrap up your close. Better, smoother and faster!

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A comprehensive guide for accountants and bookkeepers.

Year-End Accounting Checklist For 2023

Year-End Accounting Checklist For 2023

Year-End Accounting Checklist For 2022

Every year, accounting professionals drench themselves entirely in the books to prepare year-end accounts, financial statements, and reports. As per an estimate, it takes around 25 days for an average accounting team to complete a year close. It may also coincide with the month-end close process and quarterly reporting, meaning more workload and tired accountants.

An excellent way to reduce this stress and boost productivity during this time is to draft and follow a set workflow. To provide you with a start, we shall first explain to you what a year-end close is and the essential checklist that can ease the process for you.

What is year-end close?

Also called books closure, annual closing the procedure to review, reconcile and verify the financial transactions and facets of the business ledgers from the last financial year add up. It includes assessing the business expenses, revenue, profits, assets, liabilities, investments, and more.

Keeping your accounting records up to date all year long is essential for any business so you can see exactly where your business stands and be able to make thoughtful decisions based on clean numbers.

During year-end, there are a few extra accounting tasks to finish so that your books are ready for the tax professional when tax time comes around. Plus, anything that wasn’t performed monthly or more often should now be completed at year-end.

What makes year-end accounting so difficult?

Preparing the year-end accounting is decked with challenges. Accountants are at the mercy of many people to reduce their workload. Some common challenges the accounting team faces that make financial closing tough are:

  • Manual processes: are extremely time-consuming and increase the likelihood of human error, potentially compromising the integrity of financial data.
  • Manual error: Managing the bulk of paperwork in one go is challenging, even for professional bookkeepers. When humans process thousands of documents, errors are bound to happen. Sadly, even one incorrect entry or lost document can cause expensive consequences.
  • Lack of communication: Accountants go after employees for missing receipts and explanations on particular transactions. It may lead to poor and confusing email transactions decked with redundant information, complicating a simple task.

Here is a year-end accounting checklist for you to review :

As 2022 comes to an end, it is essential for business owners to close out the books in preparation for filing taxes and forecasting the health of the organization. Xenett has created an Accounting Year-End Checklist to help you through this overwhelming process. Whether your company uses an Accounting Specialist, outsources accounting, or does most of the bookkeeping in-house, this Accounting End of Year Checklist for Businesses can help.

Keeps your books organized

Assess your books to make sure all information is accurate. The procedure will be simple if you’ve kept organized and reviewed books throughout the year. Check all the numbers to know they make sense. With Xenett, keep your books organized and accurate throughout the year.

Reconcile bank accounts and credit cards

Reconciling bank accounts and credit cards is an important part of the year-end procedures. You can compare your bank account statement with accounting records to verify the spending. It should match the balance recorded in the log books. If you find any discrepancies, you must check again and make the necessary adjustments to settle the records.

Review your financial statements

Once your bookkeeping is complete, it's a good idea to look through your income statement and balance sheet - make sure everything appears correct. Take your time and go through it line by line. Look for dollar amounts that don't seem to match. Catching these mistakes now can save you time and trouble later.

Remember to look for things like:

  • Negative account balances
  • Balances that differ (seem too high or too low)
  • Substantial differences in last year's account balances
  • Misclassifications
  • Duplicate transactions
  • Missing entries
  • Unusual transaction

Other Adjustments and General Cleanup

Other adjustments you need to make to clean up your transactions can include things like

  • Transactions that got booked without a class.
  • Entries made to an account when a subaccount should have been used.
  • You could also have accounts, customers, vendors, or other entities created incorrectly that now need to be merged or deleted after the transactions are restated.
  • Confirm all the expenses are recorded in their respective categories and not at the parent level.
  • Review new accounts created in the closing period.

Your data will be more meaningful and consistent when you take the time to clean it up a little.

Year-end accruals

Accruals are adjustments for revenue that have been earned but not posted to the general ledger accounts and expenses that have been incurred but are not posted to the general ledger accounts. Year-end accruals are adjusting entries to ensure revenue and costs are recorded in the correct fiscal year.

Record year-end accruals, if you are not already recording monthly, e.g., depreciation, payroll, services received not yet billed for, payments made for services not yet received, and deferred revenue.

Loan Reconciliation

If your company has any loans, the loan balance on your balance sheet should match the loan balance on the bank or lender statement. When payments are made, they include both principal and interest, which need to go into separate accounts.  Often, this needs to be recorded correctly and can be corrected at year-end.

Interest Income and Expense

It’s a good idea to reconcile the balances in your interest income and expense accounts with the interest you received and paid from your financial institution reports.

Evaluate accounts payable and accounts receivable

Assess accounts receivable and accounts payable to ensure you have settled your debts and collections. For accounts receivable, ask for the missing bills and contact your customers if there are any unpaid payments. Look out for late bills for accounts payable and contact vendors for uncashed checks.

If any unpaid invoices in your Accounts Receivable account are old and might not be collectible, they can be written off or sent to a collection agency.

Sales Tax Liability

If you collect sales tax when you sell your products or services and some of it is unpaid to the state or local agency, you should have an amount recorded in your sales tax liability account. It should be adjusted to the exact amount due. Your payment schedule will determine the amount.  It could be a year’s, a quarter’s, a month’s, or some other amount.

Assess the paperwork for lender and vendor

Check the information on your 1099 forms to make sure they are updated. Speak to your lenders and vendors with questions to gain accurate data. Check the forms against online payment and billing systems to ensure they reconcile. It will further help you optimize your payment processes in the coming year.

Your company may need to generate and send 1099s to any contractor you paid over $600 for the year that was not paid through credit cards or a payment vendor like PayPal.

Fixed Assets

Your balance sheet should reflect your company's long-term assets, such as vehicles, buildings, land, machinery, furniture, equipment, and computers... Each of these items should be listed on your fixed assets schedule, and the balance should reflect the correct value of these items.


Certain fixed assets can be depreciated, meaning a portion of the cost is expensed yearly. A company should have a current depreciation schedule that should be updated each year or more often.

An adjusting entry should reflect depreciation for the current year or period if it’s recorded more often.

A schedule should also be kept of differences between book and tax records so that it’s easier to complete the corporate tax return.

Wages Reconciliation

Payroll-related expense accounts should be reconciled with the sum of the payroll reported on the IRS Form 941s in all four quarters. These accounts include wages and payroll taxes paid by the employer.

Officers’ Salaries

Your tax professional may need the breakout in wages between officers’ salaries and all other wages if your business is incorporated. Your accountant can create a separate account and make a journal entry to break it out, or you can track it outside your accounting system.


Hopefully, your payroll system automatically generates W-2s for your employees and the W-3 submittal, but it’s a good idea to check them to ensure they are accurate. You may also have state and local reporting requirements at year-end.

The totals on the W-3 should reconcile to the corresponding payroll expense accounts.


Year-end is a good time to see if you have copies of W-4s in hand from your employees.

Calculate inventory

Inventory checks are a significant part of business administration, helping you physically assess and monitor stock. Doing an inventory check at the end of the year lets you check if the value of the remaining goods reconciles with your balance sheet. If you find any discrepancies, there may be reasons like theft, loss, waste, or manual error.

If some of your inventory is no longer salable, it may need to be written off or sold for scrap. Your books should be adjusted for these changes at year-end or as soon as the items are determined unsalable.

Documentation for Invoices, Bills, and Receipts

If you are ever audited, you’ll need proof of what you spent on your business. Year-end is a good time to ensure your paperwork is in order and either filed safely or scanned in and saved in the cloud.

Other Account Balances

If you have other accounts not listed above on your balance sheet, they should be reviewed or reconciled. These accounts are less common: goodwill and other intangible assets, deposits, prepayments, escrow, etc.

It will depend on the account's nature and how the amount can be validated.

Cash vs. Accrual Adjustments

Many small businesses use the accrual method of accounting to keep track of unpaid invoices and bills but use the cash basis to pay taxes. In this case, reversing entries need to be made, so the books are suitable for tax but then are reversed on January 1 back to accrual.

Other Accruals

There may be other accrual entries not mentioned here that apply to your situation and that need to be made by your accountant.

Close or Lock the Books

Now that everything is tied with a bow, no more entries should be recorded that have a date of last year, or your balances will change and no longer reconcile with all the hard work you’ve done so far. Some accounting systems allow you to close the books by preventing new entries; this is called locking or closing, so use this feature if you have it.

Use the head start on accounting for the coming year

Budget for Next Year

How close did you come this year to meeting your budget? An analysis of the year can be made at this time, along with creating a new budget for next year based on what you learned and your upcoming goals.

Tax Projections and Plan

It’s a good idea to set up a tax projection or planning meeting with your tax professional well ahead of December 31 in case there are any moves you can make to save on taxes. This should include determining if you have deposited enough of your tax liability so that you won’t owe a significant amount come tax time.

You can also get a schedule of tax payments that need to be made in the coming year for the following year’s taxes.

Year-End Close and Review Tools to Streamline the Process

Using Xenett, finance teams work faster and better and save time year-round, making better financial decisions.

It integrates with Xero and QuickBooks Online, giving the finance team more control and real-time visibility over clients’ financials within a centralized platform.

Simply put, preparing for the year-end accounting becomes more straightforward, organized, and proactive using the checklist. It enhances your accounting practice and helps you streamline financial processes at the end of the year.

Xenett provides the ability to automate and accelerate the financial close and reporting process. Hundreds of accountants are already benefiting from these tools.

Can a Fast Financial Close be Done Without Automation?

New technologies can help streamline the financial close, but good technology layered over a poor process will hamper the results. If a practice does not have a good set of rules or a well-thought-out financial close process, those same problems will appear in the automated processes.

Key steps to take toward process improvement include :

A key first step in improving monthly and quarterly close is to perform periodic review.

  • Eliminating manual checks
  • Organized and structured centralized close system
  • Keep track of all communications, comments, and queries in a centralized system.


As the year comes to a close, it is essential to tie up loose ends and all accounting differences so that you can prepare for the next 12 months and deliver success.

Xenett is your ideal solution to avoid all discrepancies and make your year-end accounting simple and hassle-free.

It will also help practices centralize their close process with automated workflows, real-time dashboards, data aggregation, close task management and assignments, and spreadsheet integrations.

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