Year-end bookkeeping checklist: what to fix before your CPA sees the file

Why this is worth an afternoon

Your CPA prepares the return from what is in your books. If the books are unfinished, they either fix them at their hourly rate or file from numbers that aren't right. Most of this list is about finishing the year, not about tax. The tax decisions stay with your CPA.

The checklist

1. Reconcile every account through December 31

Every checking, savings, credit card and loan account, reconciled to its December statement. Credit cards are the easiest to skip, and they are where personal charges and missing receipts hide. Loan balances should match the lender's year-end statement.

2. Empty the uncategorized accounts

QuickBooks Online creates Uncategorized Income, Uncategorized Expense and Uncategorized Asset to hold transactions that still need a category. Open each one and give every transaction its real category. If your file has a holding account like Ask My Accountant, turn what is in it into a short list for your CPA, with a note on what you know about each item.

3. Clear old balances in Undeposited Funds

Undeposited Funds, shown as Payments to deposit in some files, holds payments waiting to be grouped into a bank deposit. At year-end it should only hold payments you truly haven't deposited yet. Older items often mean a deposit was added from the bank feed instead of matched, so the same income is counted twice.

4. Review who owes you

Run the accounts receivable aging report. Chase what is collectible. For invoices you will never collect, ask your CPA how they want them handled rather than deleting them.

5. Review what you owe

If you enter bills, run the accounts payable aging report. Bills still open from months ago are often already paid and recorded twice: once as the bill, and again as an expense from the bank feed.

6. Get contractors ready for 1099s

Every contractor you paid should have a W-9 on file and be marked to track payments for 1099. For payments made in 2026, the 1099-NEC threshold is $2,000, and the forms are due by February 1, 2027. Payments made by credit card are generally reported by the card company instead. The 1099-NEC guide walks through it step by step.

7. Separate the owner's money from the business's

Personal charges on the business card, money you took out, money you put in: each should be recorded in an owner's equity account, not as a business expense or income. Your CPA will tell you whether that means draws, contributions or distributions for your type of entity.

8. Split loan payments

A loan payment is part principal, which lowers the loan balance, and part interest, which is an expense. If whole payments were recorded as expenses, the loan balance on your Balance Sheet will be wrong. The lender's year-end statement shows the split.

9. Flag big purchases

Equipment, computers, furniture and similar purchases often aren't simple expenses. Record them, attach the receipt, and put them on the list for your CPA, who decides how they are treated on the return.

10. Tie payroll to your payroll provider

If you run payroll through a provider, the year's wages and payroll taxes in QuickBooks should agree with the provider's year-end reports. A difference usually means a payroll was recorded twice or missed.

One more number worth a look: Opening Balance Equity on the Balance Sheet should usually be zero once the file is set up. If it isn't, something was entered without its other side, and it belongs on the list for your CPA.

Hand the file to your CPA the right way

Invite them as an accountant user

Instead of sharing your login or emailing exports, invite your CPA. Go to Settings, then Manage users, then the Accounting firms tab (it may say Accountants). Select Invite firm and enter their email address. Only a primary or company admin can send the invite, and accountant users don't count toward your plan's user limit.

Then set a closing date

Once your CPA has finished, lock the year so nothing changes by accident. Go to Settings, then Account and settings, then the Advanced tab, and select Edit in the Accounting section. Turn on Close the books, enter December 31 as the Closing date, and choose Allow changes after viewing a warning and entering password. Share the password only with whoever is allowed to change last year.

If the year needs more than an afternoon, that is catch-up bookkeeping or a QuickBooks cleanup, and it is better started in December than in March.

Common questions

When should I start year-end bookkeeping?

In December, with the November statements already reconciled, so January is only about the last month. The 1099-NEC deadline for 2026 payments is February 1, 2027, and collecting contractor details takes time.

What is Uncategorized Expense in QuickBooks Online?

An account QuickBooks Online creates to hold transactions that still need a category. It should be empty at year-end, because your CPA can't use an expense nobody can identify.

Should I give my CPA my QuickBooks login?

No. Invite them as an accountant user from Manage users instead. Only an admin can send the invite, and accountant users don't count toward your plan's user limit.

What does a closing date do in QuickBooks Online?

It protects transactions on or before that date. Depending on the setting you choose, anyone who tries to change them sees a warning, or has to enter a password first.

This guide is general information about bookkeeping, not tax or legal advice. Rules change, so check the details with your CPA before you act on them.