Small Business Year-End Checklist

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What does the end of the fiscal year bring to your mind? Taxes! That's why for businesses, year-end is the perfect time to do your business planning for the following year. You're already dealing with the books, so why not do some analysis and make some decisions to ensure that your business prospers over the coming year? This year-end checklist for small businesses will help you get your income taxes in order and jump-start your business planning for the year.

1. Get Your Financial Books in Order

The difficulty of getting your books in order will depend on how organized you've been throughout the year. But whether you're one of those solo entrepreneurs with a glovebox full of receipts or an owner with a bookkeeper on payroll, you have to get this step done before you can do anything else. So get the help you need and get on with it. Hire a bookkeeper or an accountant if necessary.

2. Determine Your Position

The next step on your small business year-end checklist is to figure out where your business is now. There are three areas you need to examine:


Examine your financial documents and analyze ratios. First, you need to prepare (or have someone prepare for you) the standard three business financial documents that will be the basis of your decisions.

The balance sheet is a summary of how your business's financial position at any point in time. It shows all your assets, liabilities, and equity.

The income statement (aka the profit and loss statement) itemizes your revenue expenses for a period of time and lets you see at a glance whether your business is profitable.

The cash flow statement reconciles your opening cash with your closing cash for a particular period, showing you where the money has gone. To prepare a simple cash flow statement for a particular time (such as the year just past), list and summarize your business's cash flow inflows and outflows for each of these three areas:

  • Cash flow from operating activities, such as revenues and expenses
  • Cash flow from investing activities, such as assets purchased and assets sold
  • Cash flow from financial activities, such as new loans taken, loan repayments made, and partner or shareholder investments or distributions

This will show you the net increase or decrease in your business's cash over that period and highlight at a glance where the money went.


Once you've examined your balance sheet, income statement, and cash flow statement, dig a little deeper by checking your business's current ratio, total debt ratio, and profit margin. This will give you a more focused picture of your financial health.


Evaluate your goals from last year. Now that you know where your business is, it's time to take a look at how it got here. Pull out your business plan and any other planning documents, such as last year's action plan, and review last year's goals.

Did your business accomplish what you set out to do? Why or why not? Make some notes about how you did this year. These will be handy when you do your business planning for the current year (step two below).


Evaluate your current tax strategies. There are tax strategies that companies in the U.S. and Canada can take to reduce the amount of income tax they pay, from income splitting to maximizing your business's depreciation claims.

Which of these tax strategies have you used, and how well did they work for you? Investigate different tax strategies that you haven't tried, such as changing your business structure to a corporation. Talk to a professional such as an accountant or tax lawyer to get advice about which tax strategies would be best for your personal and business circumstances.

2. Plan for the Coming Year

Now that you’ve laid the groundwork, you're ready to do some business planning. That means that you are going to:

  • Set next year's goals.
  • Prepare an action plan or plans.
  • Start implementing your action plans.

Before you set any goals, make sure you are setting ones that are going to help you accomplish what you want to accomplish. Your targets for the year should line up with your broader, long-term business objectives.

3. Prepare Your Tax Documents

You can turn over the required documents to an accountant or prepare your income tax yourself. There are key records your tax accountant will need to prepare your income tax. Using a cloud-based accounting software will streamline this process by allowing your accountant to directly access your business records online. If you're not aware of what the tax requirements are for small businesses in the U.S. or Canada, your accountant can help you sort it out.

That's It! You’re Done!

You know the cliché: Businesses that fail to plan, plan to fail. We all know how important business planning is, but it's easy to put off amid the press of daily events. This year-end checklist should inspire you to get to work—and make your planning a little easier. You might even feel energized for the next fiscal year.

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