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It’s about time to start your year-end QuickBooks prep.
As the year draws to a close, businesses everywhere are gearing up for one of the most critical times in financial management — preparing their books for year-end. Proper year-end QuickBooks prep ensures accuracy, compliance, and smoother tax filing come January. Whether you’re a small business owner or managing multiple entities, getting your QuickBooks files organized before year-end can save hours of stress later.
Here’s how to efficiently handle closing projects, fixed assets, depreciation, and inventory checks before the clock runs out on the fiscal year.
Review and Close Out Projects
Before wrapping up your books, take a close look at any ongoing or completed projects. Ensure all income and expenses are properly categorized, invoices are sent, and payments are received.
- Mark completed projects as closed in QuickBooks to prevent new expenses from being added by mistake.
- Reconcile project expenses to verify that all materials, labor, and subcontractor costs have been recorded.
- Generate profitability reports to evaluate how each project performed and identify areas for improvement in the new year.
This not only keeps your books clean but also provides valuable data for forecasting and budgeting.
Update and Verify Fixed Assets
Your fixed assets — such as vehicles, machinery, and office equipment — need to be accurately recorded and updated before year-end.
- Review your fixed asset list to ensure all acquisitions and disposals from the year are recorded.
- Match purchase receipts to entries to verify cost and date of acquisition.
- Confirm asset categories and useful lives to ensure proper depreciation calculation.
You can use the QuickBooks Fixed Asset Manager (FAM) to track and calculate depreciation automatically, ensuring your tax accountant receives accurate data when preparing your return.
Calculate and Record Depreciation
Depreciation can significantly impact your year-end financial statements and tax deductions.
- Run your depreciation schedule through the Fixed Asset Manager or your accountant’s software.
- Post depreciation journal entries in QuickBooks to adjust for wear and tear over the year.
- Double-check accumulated depreciation accounts to ensure they align with your financial reports.
Accurate depreciation entries keep your balance sheet and income statement consistent — and prevent issues during audits or tax filing.
Perform an Inventory Check
For businesses that sell physical goods, year-end inventory accuracy is essential for cost of goods sold (COGS) and profit calculations.
- Conduct a physical inventory count and compare it to your QuickBooks inventory records.
- Adjust inventory quantities and values to reflect actual stock on hand.
- Investigate discrepancies — missing items, overages, or damaged goods — before finalizing numbers.
- Update item costs if necessary to reflect changes in supplier pricing or freight costs.
An accurate inventory ensures your year-end reports truly represent your business’s financial position.
Reconcile All Accounts
Once you’ve completed the key steps above, finish your year-end QuickBooks prep by reconciling every account — from bank accounts to credit cards and loans.
- Reconcile bank statements to ensure all deposits and withdrawals match.
- Check accounts payable and receivable to confirm all invoices and bills are up to date.
- Review payroll liabilities and ensure all taxes and benefits are properly recorded.
A full reconciliation gives you a clear financial picture and helps spot errors before sending records to your accountant.
Backup Your QuickBooks File
Before sending anything to your CPA or making year-end adjustments, always create a backup of your QuickBooks company file. This ensures that you can revert to an earlier version if needed and protects your financial data from accidental loss.
A Little Preparation Will Save You a Lot of Headache
Proper year-end QuickBooks prep sets the stage for a stress-free tax season and a stronger start to the new year. By closing projects, verifying fixed assets, calculating depreciation, and performing a detailed inventory check, you’ll ensure that your books are accurate and ready for 2026.
Start early, stay organized, and don’t hesitate to collaborate with your accountant or bookkeeper — your future self (and your balance sheet) will thank you.
Trust the Professionals at the Harding Group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients.
Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning? We have the necessary expertise and years of proven results to help.
We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. Follow us on Facebook, Twitter, YouTube, and LinkedIn for more tax tips.