your small business year-end checklist illustration

Your Small Business Year-End Checklist

The end of the year will be here before you know it. Now is the perfect time to wrap up projects and get everything ready for the new year. Use this year-end checklist to complete necessary tasks and prepare for next year.

Payroll & Employees

Remind Employees to Review Their W-4

Your employees can update their W-4 whenever they want, but the end of the year is a great time for them to review it. Remind them to verify that the information is correct and the amount they want withheld is accurate. Don’t forget about your state’s W-4, either!

Verify Employee Names and Social Security Numbers

The Social Security Administration offers an easy way for you to verify your employees’ social security numbers online. Doublecheck that your employees’ names and social security numbers match now so you don’t run into problems when you’re filing their Forms W-2.

Gather Information for Forms W-2

You’ll have a lot going on in January and want to make sure that nothing is overlooked. Start gathering everything you need to file Forms W-2 now so you’re not rushed later. As a reminder, Forms W-2 are due by January 31.

Every form will need your Employer Identification Number (EIN), company name, address, ZIP code, and your company’s state Taxpayer Identification Number (TIN).

For each employee, you’ll need:

  • your employee’s name;
  • social security number;
  • total wages, tips, and other compensation paid;
  • amount of Federal income tax withheld;
  • social security wages and tips and the amount withheld;
  • Medicare wages and tips and the amount withheld;
  • allocated tips paid;
  • taxable benefits;
  • state wages and tips;
  • amount of state income tax withheld;
  • local wages and tips paid; and
  • local taxes withheld.

Hold Year-End Performance Reviews

The end of the year is a great time to hold performance reviews with each of your employees. You can talk about your employees’ accomplishments during the past year and set goals for the upcoming year.

Hand Out Employee Bonuses

If you’re going to hand out employee bonuses (either performance-based or holiday bonuses), the end of the year is a great time to do it! You’ll receive a tax deduction for the bonuses, and your employees’ morale will be boosted.

Request Contractors’ Taxpayer Identification Numbers

If you’ve hired any independent contractors during the year, make sure you have their TINs. If you don’t have someone’s TIN, request it using Form W-9. Making sure you have the correct TIN will allow the IRS to match the 1099 you file with the 1099 your contractor files with their tax return. It will also prevent you from having to start backup withholding.

Finances & Taxes

Get Your Books in Order

Before the end of the year, make sure that all income and expenses are accounted for. If you need help, hire a bookkeeper or accountant.

Examine Your Financial Documents and Analyze Ratios

After you’ve gotten your books in order, examine your financial documents and analyze your financial ratios to see where your business stands.

Your balance sheet is a summary of how your business is doing at a particular point in time and shows your assets, liabilities, and equity. An income statement allows you to quickly see whether your business is profitable at a particular point in time and will show your revenue, expenses, and the resulting profit or loss. Your cash flow statement will show you where your money has gone by showing you cash flow from operating activities, investing activities, and financial activities.

After your financial documents are in order, you can start examining your financial ratios, like your current ratio, total debt ratio, and profit margin.

Talk with Your Tax Advisor

Set up a time now to speak with your tax advisor. They’ll help you determine steps to take before the end of the year, like buying supplies or making a charitable contribution. They’ll also be able to help you navigate through any tax changes that have happened during the past year.

Buy Supplies for Next Year

If you’re running low on office supplies, stock up now. You won’t have to run out to buy more as soon as the new year starts, and you’ll be able to deduct the supplies from this year’s income.

Make a Charitable Contribution

The end of the year is also a great time to make a charitable contribution. Sure, you might make the contribution because you really want to give back to your community, but it can benefit your company, too. You’ll receive goodwill from the community, and you’ll be able to write the contribution off on your taxes.

Set Financial Goals for Next Year

Now that you know where your business stands this year, you can start planning where you want to go next year. Because you know how well your company did this past year, you’ll know if the goals you’re setting are realistic.


Review Contracts

The end of the year is a great time to review relationships with your vendors. Review your contracts to see if you’re getting the best rates possible. If you’re not, and the vendor isn’t willing to negotiate, don’t be afraid to change vendors. If you’re still happy with the relationship, thank your vendor for working with you.

Thank Your Best Customers

Take a look at your customers and determine who your best, most profitable customers are. You might be surprised! It might not be the customer who you see the most. Send your best customers a special thank you note.

Review Your Marketing Plan

Take out your marketing plan and see what’s working and what’s not working. If you don’t think something is helping your business or has the potential to help it next year, cut it.

Review Your Website

Review your website and make sure all the information is up-to-date. If your website needs any updates or improvements, make them now.

Review Your Insurance Policies

It’s way too easy to set up your insurance policies and then just forget about them. Review them each year to make sure you’re still adequately covered and getting the best deal possible.

Set Goals & Prepare for Next Year

As this year’s ending, start setting goals for next year and build an action plan. You can even start following your action plan now to get a jump start.

Year-End Checklist for Your Small Business