Small Business Wrap Up: End of Year Financial Checklist

The end of the year is a major milestone for small business owners. It is the time when you shift from daily operations to big-picture thinking, review your financial performance, organize your records, and prepare for the next tax season. At Forward Bank, we know that the year-end process can feel overwhelming. Our goal is to help make it simpler, clearer, and more manageable for Wisconsin and Minnesota businesses to move into the new year with confidence.

Use this end of year financial checklist to wrap up your small business financials with clarity and prepare for new opportunities in the new year.

1. Start With a Full Review of Your Records

A complete and accurate set of records is the foundation of your year-end financials. This first step supports everything that follows, including your year-end closing process, tax preparation, and financial forecasting for the coming year. Taking time now to organize your documents and clean up your books helps ensure that next year begins with clarity and confidence.

Start by gathering the materials you will need for your review. Having everything in one place reduces the chances of missing important entries or overlooking key transactions.

Gather the following items before you begin:

• Bank statements
• Credit card statements
• Payroll reports
• Merchant services summaries
• Accounting software exports
• Outstanding invoices and bills

Once your documents are assembled, review your books with a focus on accuracy. Many issues discovered at year end come from small errors that built up over time, so this step is essential in catching problems before they impact your tax filings.

As you review your records, look for:

• Duplicate entries
• Missing receipts
• Unreconciled transactions
• Miscategorized expenses
• Vendor statements that differ from your records
• Outstanding invoices or unpaid bills

After identifying and correcting any discrepancies, move into your bookkeeping reconciliation. This ensures that your internal records match your financial accounts, and it verifies that deposits, withdrawals, and transfers were logged correctly throughout the year.

Make sure you reconcile:

• Business checking
• Business savings
• Credit cards
• Merchant accounts
• Payroll accounts
• Loan accounts

Most businesses complete monthly reconciliations, but even if your schedule was busy this year, now is the right time to finalize your books. Completing this step helps you start the new year with accurate numbers and a stronger understanding of your business financials.

2. Review Your Core Financial Statements

Once your books are accurate, review your key financial statements. These documents provide a clear picture of your business health and help you evaluate the year’s performance.

The primary statements to review include:

• Profit and loss report
• Cash flow analysis
• Balance sheet review

What these financial statements can reveal:

• Whether revenue increased or decreased this year
• Which expenses grew faster than expected
• How well you managed cash flow during busy or slow seasons
• Whether your assets and liabilities changed significantly
• If your margins support long-term sustainability

Your profit and loss report helps you understand your business performance month by month. The balance sheet gives you a snapshot of your financial position, including assets, loans, and equity. Cash flow analysis shows how money moved through your business and highlights areas where you may want to improve liquidity.

This review is a powerful tool when planning for next year. It brings together the full story of your business and helps you make informed decisions.

3. Review Cash Flow and Set Aside Tax Funds

Cash flow plays a central role in the stability of any small business. Many owners consider it the most important financial indicator to monitor because it determines your ability to manage unexpected expenses, navigate seasonal fluctuations, and maintain healthy daily operations. Reviewing your cash flow at year end helps you understand how well your business handled financial demands throughout the year.

Begin by looking closely at how money moved in and out of your business over the past twelve months.

Evaluate your cash flow by reviewing:

• Months when cash flow tightened or became challenging
• Periods when revenue was strong and consistent
• Times when expenses spiked unexpectedly
• Customer or vendor payment patterns that affect timing

These insights help you anticipate and prepare for the financial landscape of the coming year.

Use what you learn to plan for:

• Seasonal slowdowns or off-peak periods
• Inventory or supply purchases
• Equipment maintenance or upgrades
• Emergency reserves or savings goals
• Upcoming tax payments

With your cash flow evaluation complete, shift your focus to preparing for tax season. Early preparation helps prevent surprises and gives you time to review your obligations thoroughly.

Confirm the status of your tax requirements, including:

• Estimated quarterly tax payments
• Payroll tax responsibilities
• Sales tax filings
• Local or industry-specific tax regulations
• Depreciation schedules
• Available tax deductions

A thoughtful tax strategy reduces stress and supports smoother filing when the deadline arrives. By setting aside funds now and understanding your obligations clearly, you set your business up for a confident start to the new year.

4. Evaluate Your Merchant Services and Payment Tools

Your cash management systems play a more significant role in your year-end checklist than many business owners realize. The tools you use to accept payments influence your bookkeeping process, customer experience, and the accuracy of your cash flow. Reviewing your merchant services setup now ensures your systems continue to support your financial needs as you head into the new year.

Start by evaluating the performance and cost of your current payment tools.

As you review your merchant services setup, consider:

• Whether your transaction fees are still competitive
• If you experienced delays in payment deposits
• How smoothly your point-of-sale systems are performing
• Whether online or remote payments are easy for customers
• How well your sales reports integrate with your accounting software
• Whether chargebacks or disputes increased this year

Once you understand how your current systems perform, explore ways to simplify or enhance your payment acceptance process. Small improvements can lead to more efficient recordkeeping, faster deposits, and smoother daily operations.

Look for opportunities to improve or streamline:

• Mobile and online payment tools
• Faster funding deposit options
• Integrated accounting features
• Fraud protection and updated security tools
• Equipment upgrades or replacements
• More cost-effective fee structures

Evaluating your payment tools at year end helps ensure that your systems are efficient, secure, and aligned with the changing needs of your customers and your business.

5. Confirm Payroll Accuracy Before Year-End

Payroll is one of the most sensitive areas of your business financials. Even small errors can create tax complications, lead to employee frustration, or result in penalties. A careful year-end payroll review helps you correct issues early and ensures your records are accurate before tax forms are prepared.

Begin by reviewing wage and benefit information for every employee and contractor.

During your year-end payroll review, check for:

• Correct employee and contractor information
• Accurate year-to-date wage totals
• Updated withholding elections
• Recorded benefit contributions
• Proper classification of contractor payments
• Accurate benefit deductions
• PTO payouts or year-end accruals

After verifying individual records, shift your attention to compliance. Payroll regulations often change from year to year, so it is important to confirm that your processes align with current requirements, especially if your business added staff, adjusted pay schedules, or updated benefits.

Review compliance areas such as:

• Federal and state tax withholding guidelines
• Wage and hour regulations
• Retirement plan contributions
• Healthcare reporting requirements
• Independent contractor rules and classifications

Completing a thorough payroll review at year end helps ensure smoother tax preparation and reduces the likelihood of costly corrections later. It also provides peace of mind knowing your payroll records are organized and accurate for the upcoming year.

6. Prepare for Tax Filing with Organized Documentation

Preparing for tax season begins with organized and complete documentation. Taking time now to gather the right records helps prevent delays, reduce stress, and allows your accountant to work more efficiently. It also gives you a chance to identify missing paperwork, incorrect entries, or potential issues before tax filing begins.

Start by collecting the documents that support your year-end financials. Having everything stored in one place makes the filing process smoother and gives you a full view of your business activity for the year.

Gather and organize essential documents such as:

• Receipts for deductible expenses
• Vendor and customer invoices
• Bank and credit card statements
• Payroll summaries and reports
• Inventory lists or valuation records
• Depreciation schedules
• Insurance documents
• Loan statements
• Mileage logs or travel records

With your documents assembled, look for opportunities to reduce your taxable income. Many deductions and credits are only available when properly documented, so reviewing these areas early can help you make informed decisions before the filing deadline.

Potential tax-saving opportunities to review include:

• Section 179 deductions for equipment purchases
• Updated depreciation schedules
• Home office deductions if applicable
• Charitable contributions
• Energy-related tax credits
• Vehicle and mileage-related deductions

Early preparation gives you more time to evaluate these options and determine which deductions or credits apply to your business. This proactive approach helps reduce your tax liability and supports a smoother, more confident filing process.

7. Review Your Budget and Create a Strategic Plan for Next Year

Your year-end financials provide valuable insight into how your business performed and where adjustments may be needed. Reviewing this information now helps you build a realistic budget for the coming year and develop a strategic plan that supports long-term success. Understanding where your business thrived, where expenses grew, and where opportunities emerged can guide smarter financial decisions moving forward.

Begin by using your year-end review to shape a budget that reflects your actual performance and future goals.

Build a realistic budget by reviewing:

• Projected revenue based on this year’s trends
• Expected operating expenses
• Areas where costs can be reduced
• Planned or necessary investments
• Estimated cash flow throughout the year
• Opportunities for growth or expansion

With a solid budget in place, shift your focus to creating a strategic plan. This plan helps you define clear priorities and ensures your financial decisions align with your broader business goals.

Your strategic plan may include goals such as:

• Upgrading equipment or technology
• Hiring additional staff
• Expanding product or service offerings
• Increasing marketing or outreach efforts
• Improving digital tools or software
• Building stronger cash reserves for stability

Strategic planning gives you direction for the coming year and turns your financial review into a roadmap for growth. For businesses across Wisconsin and Minnesota, this process is especially helpful in planning for seasonal trends, local economic shifts, and community-specific needs that shape operations throughout the year.

Move Into the New Year with Confidence

By completing your year-end financial review, you prepare your Wisconsin or Minnesota business for a strong start to the new year. At Forward Bank, we are proud to support local business owners who work hard to strengthen their communities. As you wrap up the year, we are here to help guide your financial decisions, support your planning, and partner with you as you move your business forward.

If you would like help reviewing your end of year financials or planning for 2026, connect with your local Forward Bank team. We are here to support every step of your journey.