Year-End Bookkeeping Checklist: What to Review Before Moving Forward
It is a new year. Happy 2025. I am so glad that you are here. And honestly, I am thankful for a new year. I don’t know about you, but I had some great things happen in 2024, but I love a fresh start. Setting goals and all of those things in a new year. But I have something to tell you, we cannot quite finish 2024 until we’ve done these things that we’re going to talk about. We are going to go over a bookkeeping checklist for you of what to review in before moving into 2025.
Number 1 on your bookkeeping checklist: Mileage Tracking
I want you to have the most tax deductions possible that are legal and accurate. So the very first thing that I want you to go back and review is your mileage. Now I’ve heard from so many business owners that this is such a tedious task. Is it really necessary? The truth is, no. But it can actually save you so much money on your taxes because while this is not something that you’ve paid cash for, so you won’t see it in your bookkeeping or on your profit and loss report.
It is a tax deduction that will reduce your tax bill. And that is why it is worthwhile to track your mileage. If you are a QuickBooks users start going through your 2024 mileage. One thing to note for 2025 is that you can use the QuickBooks app to start and stop a trip and it makes it very easy to use right in the app. Then it uploads it straight into your QuickBooks. There’s also a tab or you can manually add some trips.
So if you went to an event, if you met a client in person, or if you went to a retreat, all of those types of things allow mileage deductions. That can actually add up to quite a bit of money and save you that money on your taxes. Don’t miss out on that.
Number 2 on your checklist: Receipts
The next thing that you want to review is your receipts. Receipts are key to backing up the expenses that you are claiming on your taxes in case you ever get audited. So this step really is important.
If you’re one of those people that has an envelope or a junk drawer full of receipts, go through those, make sure that you have all of that even entered into your bookkeeping. This means that you’ve added up all of those expenses, because sometimes it’s easy to forget some of those things. Go through those receipts and just make sure that you haven’t missed anything.
A great system is to take a picture of those receipts instead of keeping all of that paper and just put it in a folder in your Google drive or put it in a folder on your desktop. Just save it somewhere that’s easy for you to access in case you were ever audited.
Trust me, this will save you so much headache. If and when the time comes that you need to provide proof for your business expenses.
Number 3 on your checklist: Out-of-pocket expenses
The next thing you want to review for year end is your out of pocket expenses. Go back through and think about if there’s anything that you paid with a personal bank account or with a personal credit card. Maybe go through your Venmo and your PayPal, your personal ones, and just see if there’s any business related transactions on any of those accounts.
Sometimes you’ll find hidden expenses that you forgot about that you paid for out of pocket and that would still count as a business deduction for your taxes. Only count if it was a legitimate business expense. That can help you make sure that you’re not missing anything because you really want to capture all of those things so that your tax bill is lower.
You can log these expenses or income. If it was income that you received in a personal account you can’t log this in your bookkeeping software. That is the best practice so that you can see it all in one report.
There are some questions I like to have my clients think through: Do you want to reimburse yourself from the business to your personal account since you did pay out of your personal account? Do you want to reimburse yourself from the business? That is totally acceptable and allowed if that’s what you choose to do. Sometimes people just choose to leave it as is.
When you leave it as is, you can just call it an owner investment into the business. If that is an expense that you paid for out of pocket, from your personal account and you don’t expect to be reimbursed back from the business.
Number 4 on your checklist: Categories and Reconciliation
The next thing that is important to review is your categories. In the accounting world one thing that is really important to us is consistency. You want to review your categories to make sure that your expenses are categorized consistently over the year. For example, if you have a Google Suite charge. If some of the months you categorize it as dues and subscription and some of the months you categorize it as office supplies and software it just looks ugly on the report. Is it really going to matter for tax purposes? No, but it does help to see a clean and clear picture of your expenses if you consistently pick ether one of those categories.
This is where I see a lot of business owners get hung up on how to categorize things and what to categorize them as. This is a great time to go back through yours and just clean them up.
If you don’t have the same types of charges going to multiple different accounts, just pick one and stick with it until you learn that there may be a better one and then use that one consistently as well. This is also how you can catch some errors, because if you run a report that shows you how you’ve categorized all of these expenses over the year, then you can see if you maybe forgot to pay a bill. Or maybe it looks to high and you realize something else is in there. This is what we mean when we say clean books and accounting. Everything consistently going to the same place.
Another thing is to do your reconciliations. This is the best way to catch any errors or duplicates in your bookkeeping or any mistakes that have been made. This is a really critical step that will help you catch so many errors. Make sure you’ve done those reconciliations because then you can be confident that your cash amount is correct in your QuickBooks, which is huge.
Number 5 on your checklist: Taxes and Deadlines.
This next step is a reflection of some things that have happened in 2024. Go back through your taxes and see what the deadlines are. There are some final taxes that you need to wrap up for 2024. Like if you pay payroll, you need to issue your W2’s and 1099’s. All of those types of reports. But also go through and go ahead and set reminders for yourself of when your other tax payments are due for 2025 so that you make sure you pay it on time. That way you don’t have to pay any of the crazy penalties and fees for being late.
Number 6 on your bookkeeping checklist: Financial Review
Our final step is to just do a full financial review. This helps you reflect on the past year and then plan for the new year. Look at your profit and loss statement. Ask yourself – Did I make a net income or did I have a net loss this year? Maybe identify some areas where you overspent or maybe some areas where you need to readjust some funds because there’s areas that you under spent.
So for example, I’m thinking of marketing or advertising. Are there other places where you’re spending too much money that you really need to pour into those? Or is it time to replace some of your systems or do you need some equipment? Any of those types of things. Go ahead and start reviewing how 2024 was and then make decisions on 2025.
Based on that. Another great thing to set a goal for is your sales for the new year based on some of this data. If any of this planning is a struggle for you, I have a really exciting thing coming soon. So stay tuned because it’s really going to help you set those goals and then know how to meet and reach those goals.
Let’s recap! We talked about reviewing your mileage, your receipts, your out of pocket expenses, your reconciliations, your taxes, and doing a financial review. I really to encourage you to take action. Go ahead and block 20 minutes of time this week or in this month to go back and review. Straighten some things up and just make progress where you need to in your bookkeeping so that you can have that feeling of starting fresh instead of that feeling of dread that you’re so behind. I want you to be confident and prepared for all business finance things this year!
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