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Encompass is an ERP consulting firm that offers expert services in business consulting, project management, and software implementation. Whether tasked with full-scale implementation, integration and renovation of existing systems, or meeting the challenges of corporate and operational growth, Encompass delivers a specialized approach to every client’s needs. As experts in identifying customer requirements and providing the right solutions, we equip businesses to match the pace of Industry. Our Services include: ERP Software, EDI Software, Strategic Direction; Pre-Sales Services; Solution Selection; Business Consultation; Implementation Support; Implementation Methodology; Rapid Development; ROI Enhancement; Helpdesk and Managed Services.

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The Complete Business Year-End Checklist

POSTED 11/26/2018  | By: Sean Balogh

November is usually the month where businesses big and small are mobilizing in their effort to tie up loose ends and prepare for the new year with a business year-end checklist. December is crunch time, and the more room to operate you leave your business before year-end, the better. Finish up this year and begin the next by getting a handle on more than just taxes for the fiscal year. Now is the best opportunity to take on your business plans for the coming year. Financials are just the beginning of a proper end of year agenda. Inventory counts, marketing strategies, expansion plans, and IT evaluations are essential topics to visit in your business year-end checklist

Financial Year-End Checklist

Admittedly, financials will likely be where you spend the bulk of your efforts come time to attend to your business year-end checklist. If you’ve been keeping meticulous records, you’ll likely be in a good spot and reporting won’t be as painful as it might be if the opposite were true. If you haven’t been keeping good records or any at all, this is likely your least favorite time of year. The best time to adopt good recordkeeping and accounting practices was last year; the second-best time right now. So, try to identify where you’ve been slacking and invest in getting those processes up to snuff.

Running Standard Reports

It’s important to understand where your business is financially in relation to previous years. You can access this information by reviewing past reports. Dig up those spreadsheets or reports in your accounting software. If you’re using an ERP solution like Epicor or NetSuite, you’re already in a good way, as these tools make financial reporting and analysis that much easier for a business. A typical financial report will consist of:

  • A Profit And Loss Statement - shows a company’s revenues and expenses during a given period of time.
  • A Balance Sheet - shows the assets, liabilities, and capital of a business at a particular point in time, detailing income and expense relative to the preceding period.
  • A Cash Flow Statement - shows how changes in balance sheet accounts and income affect cash and cash equivalents with drill-down into operating, investing, and financing activities.

Looking at your profits for the year is another easy way to gauge performance.

Cash Flow Analysis

Let’s break down your cash flow statement into the three components you’ll want to analyze as part of your business year-end checklist. Understanding how your money was spent throughout the year is essential for proper analysis, and the Cash Flow Statement helps you do just that. There are three components you’re going to want to look at:

  • Operating activities –  includes your business’ revenue and expenses
  • Investing activities –  includes any assets purchased or sold throughout the year
  • Financial activities –  includes any loans and repayments

Reconciliation Of Accounts Receivable

If you’re an active business, chances are you have invoices that remain unpaid or clients who owe you money for goods and services performed. Do your best to rein in these accounts and get those outstanding debts settled as part of your business year-end checklist. Don’t play catch-up. Get started next year with a clean slate and position your business for success.

Reconciling of accounts receivable (AR) requires a business match their total outstanding customer billings to the AR total stated in their general ledger. There are two information sources from which this data is derived, they are:

  • General ledger - the main accounting record of a company or organization.
  • Receivables Detail – the outstanding invoices a company has or the money clients owe the company.

These details should match, though inconsistencies may be apparent. There are a few reasons this may be the case, such as:

  • A general ledger journal entry was recorded but initially bypassed the subsidiary sales ledger.
  • A billing instance was posted to an incorrect account.
  • The general ledger balance and aged receivables report were run with misaligned dates.

Reconciliation is an important step in the financial year-end checklist because financial statements need to be issued without material inaccuracies. Any inconsistencies need to be identified and reconciled prior to a business’ third-party auditors examining those financial statements. Failure to do so could lead to a large-scale audit, a significant business disruption, and even charges of fraud from financial authorities.

Verify Vendor Information

During your business year-end checklist is the time to look at the vendors in your system. If you used any vendors this you, chances are you did, that you’ll have to collect W-9 forms for some of them. These are essentially a breadcrumb for the IRS to track your expenses and your vendors'. If you spent $600 or more on a vendor’s services, you’ll need to issue and complete a 1099 form. This form needs to be sent to the IRS by January 31.

Take the opportunity to verify the accuracy of the contact information, such as phone number, email address and contact names. If outdated or inaccurate information is present, correct or remove those entries. Have time to make a few calls? Now would be a good point to evaluate whether it is worth reconnecting, setting up meetings, and drafting new contracts.

Address Payroll And Benefits

Every business must ensure payroll and benefit requirements are met at the end of the fiscal year as part of their business year-end checklist. The undertaking is no small effort and some of its tasks will carry on into the new year.

Initially, a business will need to verify all employee data, such as legal names, SSN, and current address. This information should already be available to your accounting department when it comes time to issue W-2s. Failure to include all the correct data can lead to penalties.

A complete record of each employee’s payment throughout the year should be compiled, including paychecks, commissions, bonuses, and anything running peripheral to standard payroll activity. This includes any handwritten checks, be it cleared or voided. Double check each employee’s benefits and deductions for consistency.

Audit all time off including sick days, vacation, or otherwise approved out-of-office time. What was used and what remains? Does your business allow vacation roll-over or require employees “use it or lose it”. Notify employees of their remaining balances if one exists and how they can use it based on your company policy.

You’ll have to buy W-2 and W-3 forms as part of the financial end-of-year checklist. These forms can be purchased directly from the IRS or any authorized provider. The W-2 forms will need to be distributed to employees and both federal and state governments at the beginning of the new year. The W-3 forms will be sent to state and federal governments as a summary of all W-2 forms you have submitted.

New labor law posters for your locality will need to be posted in accordance with federal and state laws. This can also include the necessity for other legal documents to be posted, such as the Employee Polygraph Protection Act, the Fair Labor Standards Act (FLSA), the Occupational Safety and Health Act. You can find out exactly what your company needs to post by contacting the U.S. Department of Labor poster advisor. State and local laws may have additional requirements, too.

Check federal, state, and local tax rates, which are updated on an annual basis. These rates include:

  • Federal income tax
  • Federal unemployment tax (FUTA tax)
  • FICA taxes (Social Security and Medicare taxes)
  • State income tax
  • State unemployment tax (SUTA tax)
  • Local income tax

Each year your employees are to evaluate their withholding allowances for federal and state tax systems. For federal withholdings, the W-4 form is used. An additional withholding allowances form may be used in the case of state income tax withholdings.

Determine your next year’s a deposit schedule for federal income tax and FICA taxes should be determined before the new year begins. These taxes are paid on either a monthly or weekly basis. This schedule is based on a based on a lookback period, a designated time period that is used to measure how much you previously paid in taxes. This deposit schedule is fluid and can change with each new year, therefore it is important to determine prior to the beginning of the new year.

Your financial year-end checklist doesn’t finish when the year ends. There are several tasks that carry on into the new year. These include:

  • Updating payroll to reflect any new wage rates, withholding allowances, and other deductions.
  • Employee Form W-2 distribution (Must be filed by January 31).
  • Social Security Administration filings for all employees’ Form W-2. (Must be filed by January 31) Filing of Form W-3, the transmittal form. (Must be filed by January 31)
  • Filing FUTA taxes on Form 940. This includes your company’s Q4 FUTA taxes from the previous year. (Must be filed by January 31)
  • You must also file your federal income taxes and FICA taxes in the new year, Forms 941 & 944. (Must be filed by January 31)

Information Technology (IT) Year-End Checklist

An often-overlooked component of the small and mid-sized business year-end checklist, your hardware and software should be evaluated on a yearly basis. This not only ensures the integrity of your business systems, but also the security of your business and customer data. Here are a few things you can do to ensure you’ve taken the right steps towards ensuring your IT infrastructure is ready to carry your business into the new year.

Back Up Your Data

First and foremost, you should be backing up your data regularly. If you aren’t there is no better time to begin this essential practice than right now. Get into good data-keeping habits and back-up all your business’ critical information. Keep in mind, if you don’t you could be one outage away from ruin. All your files, including accounting, client files, creative collateral, and emails should be backed-up and secured. You should consider requiring your employees to do the same. Providing external hard drives for business use or access to a cloud-based system like DropBox or OneDrive will help ensure that important data is kept safe.

It’s not enough to keep your essential files updated, they need to be available if something should happen to your critical infrastructure. This will ensure you can continue to operate on good data while systems are being rebuilt. The best way to approach this is to keep a combination of digital copies of your critical files. Don’t settle for just one copy in a cloud-based file sharing site like Dropbox or leave your reports in the system that ran them. When it comes to backups, a ratio of 2:1 is ideal. That is, keep two digital copies of your files and store them in two separate places. Then, make an additional copy and store it on an external device, not connected to your business systems and preferably in an external place.

Evaluate For Hardware And Software Upgrades

When was the last time you upgrades these two critical components of your business? you might not need to stay current with every new released of the latest tech or software versions, but keeping in tandem with the latest of each will go a long way. Ensure that you are abreast of the latest in data and systems security by utilizing modern equipment and software. Waiting too long to upgrade, what is referred to as being version locked, can spell disaster for you down the road.

Evaluate Filing And Naming Systems

Evaluate your system for naming files. This may seem like a small detail but using a unified system of data storage and look-up conventions can keep important files from being lost in the library of information your business retains. Create a set logic for filenames according to each type of file you store in your systems. For instance, when filing receipts, you can designate a convention like “Name/Company-Date-InvoiceNumber”. This is an especially important undertaking if your business operates at multiple sites and shares servers that are accessed by multiple employees. Being as clear and consistent as possible will ensure nothing slips through the cracks and your internal auditing processes go off without a hitch.

General Business Year-End Checklist

There are plenty of undertakings that fall into the category of general business, each of which can be as critical to your success as financial year-end checklist components by which every business has to abide.

Complete A Physical Inventory

Not every business will need to complete a physical inventory as part of their business year-end checklist. However, retailers, manufacturing, warehousing, and logistics companies certainly all need to complete a full-scale physical inventory at least once a year. This will provide accurate visibility into current stock, it’s value, cycle rates, capital currently tied up in inventory, as well as a host of other important metrics. These counts will also need to match your year-end balance sheet. This is one year-end checklist item that doesn’t have to be a bore. You can get the whole company involved, from the back office to those who are on the warehouse floor every day. Play music, order lunch, and get everyone working together towards a common goal. The task will go much faster this way and will give your teams an opportunity to build relationships.

Examine Growth Trends And Plan For Hiring

As you enter a new year of operation, one thing you’ll want to take a close look at is growth. If you’re on an upward trend you will want to consider your staffing needs. Now is the time to determine if you’ll be hiring next year and for what positions. Be sure to budget appropriately and begin looking at your criteria for positions sooner, rather than later. Now is also a good time to evaluate and improve upon your processes for hiring, onboarding, training, and retaining employees. You want to capture the best candidates out there looking for new opportunities and keep the reliable talent you have in-house as you move into the new year.

Account For Accomplishments

Too often during the year-end checklist process, businesses get caught up in what’s gone wrong and where mistakes were made. It’s important not just for perspective, but for morale as well, to recognize and announce what you have accomplished over the last year. Your employees will appreciate knowing that their hard work has not gone unnoticed and the recognition they receive will invigorate them going into the new year.

Gather Feedback, Examine Goals, Set New Ones

There are many components of a business that can lend insight into how processes and efforts can be improved. Using your financial statements, customer feedback, and employee input, you can evaluate how well you did in achieving your previous year’s goals. Didn’t have any clear goals last year? Now is the time to give the company a clear direction and work towards clear results. Use what you learned last year to set new, achievable goals in the year to come. This isn’t just for the profitability of the company. Consider what goals should be set for employees and how the organization addresses their needs, too.

Evaluate Your Website

Your company website is essentially your online storefront. It’s a way for you to introduce your company to prospects and provide a gateway for established customers to learn what you’ve been up to. Does your website address those groups and provide the information they come looking for? Now is the time to make sure the answer to both those questions is a resounding yes.

Check your links. Not just frontpage links, every link. Broken links not only keep your website visitors from finding the information they are looking for, but they are also punished by search engines when it comes to listing your web pages in search results pages.

Testing your contact us form, calling your support phone number, and ensuring the email addresses on your webpage deliver to the appropriate inbox are all essential webpage testing you should complete before the year is over.

Reporting and search engine optimization may seem a bit advanced if your company doesn’t have a dedicated resource for these endeavors. However, with some basic knowledge, you can optimize your website and gain visibility into how effective your efforts are based on traffic and keyword reporting.

Sales And Marketing Plan

Chances are you came into this year with sales and marketing goals in mind. How well did you succeed in achieving them? Take a close look at your sales process and identify where you can make adjustments for better success in the new year with this business year-end checklist. Some key metrics to consider include:

  • Sales cycle time – from contact to close
  • Prequalifying processes for prospects
  • Upselling rates
  • Customer lifecycle and retention rates
  • Rates of lapsing or lapsed customers whom you haven’t heard from in a while

Marketing should support sales and the way you approach marketing will have a direct effect on your results in sales. Marketing is one component of a business that can easily get out of hand in terms of budget. Be sure that your efforts result in profitable sales, otherwise, your marketing is essentially cannibalizing your business.

Evaluating Business Processes

Every business is unique, but every business fails or succeeds in implementing sound business processes. This can include everything from the assembly of manufactured goods to invoicing. Take a look at your most highly accomplished competitor; how are they cutting waste and optimizing processes to maximize profitability? Identifying where you can make processes more efficient will deliver quantifiable results to employees, customers, and stakeholders in a big way. This business year-end checklist is just one of the many tools to help ensure your process improvement efforts are successful.


Now that you’ve looked at your accounting requirements, hiring needs, technological infrastructure, marketing efforts, and process improvement as part of your business year-end checklist, you’ll have to decide the number of resources each of the components of your business with receive in the new year. This doesn’t need to be a concrete figure, but you need some idea of where the money and talent are going to ensure success. After all, the business that fails to plan, plans to fail.

You can download the complete Encompass Solutions business year-end checklist in PDF format at https://encompass-inc.com/business-year-end-checklist/.

About Encompass Solutions

Encompass Solutions, Inc. is an ERP consulting firm, NetSuite Solution Provider and Epicor Gold Partner that offers professional services in business consulting, project management, and software implementation. Whether undertaking full-scale implementation, integration, and renovation of existing systems or addressing the emerging challenges in corporate and operational growth, Encompass provides a specialized approach to every client’s needs. As experts in identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.