December Year-End Accounting & Payroll Checklist

As the year comes to a close, December becomes one of the busiest months for business owners, bookkeepers, and payroll teams. A smooth year-end close doesn’t have to be complicated—having a simple checklist makes it much easier to stay organized and avoid surprises in January.

Below is a quick and easy December year-end checklist to help you finalize your accounting and payroll before December 31.

1. Reconcile Financial Accounts

Make sure all accounts match your records:

• Bank accounts

• Credit cards

• Loans

• Payment processors (Stripe, PayPal, etc.)

• Petty cash

Fix any mismatches now to avoid delays in January.

2. Make Sure All Revenue Is Recorded

• Send out all December invoices

• Review late or unpaid invoices

• Check customer deposits and deferred revenue

This ensures your income is reported correctly for the year.

3. Finalize Expenses and Bills

• Enter all vendor bills

• Record December expenses (even if the bill hasn’t arrived)

• Update prepaid expenses

• Make sure employee reimbursements are complete

4. Handle Year-End Inventory (If Needed)

• Perform a physical inventory count

• Update your system to match

• Record shrinkage or damaged items

5. Review Fixed Assets

• Record any equipment purchased or sold

• Update depreciation and post year-end entries

6. Wrap Up Payroll

• Confirm employee info (names, addresses, SSNs)

• Enter bonuses, commissions, or PTO payouts

• Add all taxable fringe benefits

• Reconcile payroll taxes and benefit contributions

7. Prepare for Year-End Forms

Get ready for January filings:

• W-2s for employees

• 1099s for contractors

• Quarterly and annual payroll filings (941, 940, state forms)

8. Check Compliance Tasks

• Renew licenses and permits

• Prepare for workers’ comp audits

• Review sales tax filings

• Confirm ACA reporting requirements (if applicable)

9. Plan for Next Year

• Update budgets and forecasts

• Review vendor contracts

• Prepare for new payroll tax or minimum wage changes

10. Clean Up Your Systems

• Remove inactive vendors/employees

• Organize digital and paper files

• Update your chart of accounts

  
  

December can feel overwhelming, but following a simple, organized checklist helps you close out the year smoothly and confidently. By reconciling your accounts, finishing payroll tasks, preparing required forms, and planning ahead, you’re setting your business up for a clean start in January.