Year-End Bookkeeping Checklist (2025 Books, Close by January 31)

Year-end close is the difference between a smooth tax season and a chaotic March. The goal is simple: by January 31, every 2025 transaction is categorised, every bank account is reconciled, and the books are locked.

Here's the order it actually has to happen in.

1. Download every 2025 bank statement as PDF — checking, savings, credit card, loan, payment processor. Don't trust live exports; pull the official monthly PDFs the bank archived.
2. Convert each PDF to CSV using the in-browser bank statement to CSV converter. Save one CSV per account per year.
3. Pull 1099-K and year-end summaries from Stripe, PayPal, Square, Etsy, Shopify, Amazon, Upwork — anyone who paid you $600+ should issue a 1099-NEC; processors over the $5,000 IRS threshold issue 1099-K.
4. Collect W-9s from any contractor you paid $600+. You'll need their name, address, and TIN to file 1099-NECs by January 31.

For each bank account:

1. Import the cleaned CSV into QuickBooks (CSV → QBO), Xero (PDF → Xero), or Wave.
2. Match every transaction to a customer, vendor, or category.
3. Reconcile the ending balance to the bank's December 31 statement balance — to the penny.
4. Resolve uncleared items — outstanding cheques, deposits in transit, bank errors.

If the balance doesn't match: the AI Categoriser often catches the rogue transaction faster than scrolling line-by-line.

• Depreciation — annual depreciation for vehicles, equipment, furniture. Your accountant calculates; you book.
• Inventory adjustment — physical count vs book count.
• Accrue unpaid bills — December utilities, December credit card charges that post in January.
• Owner draws / contributions — separate from business income/expense.
• Loan interest split — interest is an expense; principal is a balance-sheet payment.

• W-2s to every employee, copies to SSA.
• 1099-NECs to every contractor paid $600+, copies to the IRS.
• 1099-MISCs for rent, royalties, prizes, attorney fees.
• Sales tax for Q4 / December — varies by state.

• Run a Profit & Loss for the full year. Sanity-check it line by line.
• Run a Balance Sheet as of December 31, 2025. Verify it balances.
• Run a Trial Balance — your CPA will ask for it.
• Close the books — in QuickBooks: Edit → Preferences → Accounting → Set Closing Date. In Xero: Settings → Advanced → Financial Settings → Lock Date.
• Export everything to your CPA — P&L, Balance Sheet, Trial Balance, General Ledger detail, and the original bank CSVs.

1. Venmo/Zelle business payments — they show up on personal bank statements. Filter and reclassify.
2. PayPal balance — the cash sitting in PayPal on Dec 31 is an asset; book it.
3. Prepaid subscriptions — annual SaaS renewals paid in November should be partially deferred to 2026.
4. Gift cards issued — unredeemed gift cards are a liability, not revenue.
5. Refunds vs returns — a refunded sale reduces revenue; a returned product affects COGS.

A solo freelancer with 3 accounts: half a day, end-to-end, using the bank statement to CSV converter + merger + categoriser pipeline.

A small business with 10 accounts and payroll: 2-3 days the first time, half a day every year after once the categorisation rules are set.

• 2026 tax season checklist
• Import bank statements into QuickBooks
• QuickBooks vs Xero for reconciliation
• Bookkeeping glossary