As the final week of 2025 arrives, business owners enter one of the most important financial moments of the entire year. This last stretch of December determines how smoothly tax season will go, how accurate your financial statements will be, and how confidently you step into 2026. It is the time to finalize your records, complete your reconciliations, gather necessary documents, and tie up the loose ends that can create stress if left until January.

Closing the books is not just an administrative task. It is an essential part of protecting your business, improving your financial clarity, and starting the new year with structure and confidence. A thorough year end close ensures that your numbers are clean, your documentation is ready, and your tax team has everything they need to help you maximize deductions and avoid unnecessary penalties.

This guide walks you through a complete financial checklist for the final week of 2025. By following these steps, you will position your business for a smooth transition into 2026 and a more efficient tax season.

Begin with Core Filing Tasks for Year End Compliance

The last week of the year is the ideal time to address filing tasks and administrative requirements. These tasks ensure that your business remains compliant and that nothing is overlooked as you move into the new year.

1. Confirm Your Estimated Tax Payments

Ensure your fourth estimated tax payment is on track. Review:

• Your year to date income

• Profit margins

• Adjustments based on unexpected changes in revenue

• Updated projections from your tax professional

Accurate estimated payments help you avoid penalties and create a cleaner starting point for January.

2. Review Payroll Information Before Year End

Payroll preparation is an essential year end task. Check:

• Year to date wages

• Payroll taxes paid

• Employee address and identification information

• 1099 contractor payment totals

• Any year end bonuses or adjustments

Ensuring accuracy this week helps avoid errors in January when filing deadlines are tight.

3. Prepare Vendor and Contractor Records

You will need accurate information to file 1099s in January. Begin organizing:

• Vendor names

• Addresses

• Tax identification numbers

• Total amounts paid this year

Collecting this information now saves time later and prevents filing delays.

Collect and Organize All Necessary Documents

Document collection is one of the most important parts of closing the books. A strong document system improves accuracy, reduces stress, and allows for faster tax preparation.

1. Gather Income Documentation

Collect and organize all income records for the year, including:

• Bank deposit records

• Payment processor statements

• Sales reports

• Rental income

• Any other revenue sources

These documents should match the income recorded in your accounting software.

2. Organize Expense Documentation

Expenses require careful documentation to support deductions. Gather:

• Receipts

• Invoices

• Credit card statements

• Vendor bills

• Mileage logs

• Travel documentation

Label or categorize each document to make tax preparation more efficient.

3. Organize Payroll and Contractor Documentation

Prepare:

• Payroll journals

• Contractor payment summaries

• Benefit and insurance documentation

• Retirement contribution records

Payroll errors can create compliance issues. Proper documentation protects your business from costly mistakes.

4. Collect Asset and Depreciation Records

If you purchased equipment, technology, or property in 2025, gather:

• Purchase receipts

• Financing agreements

• Dates placed in service

• Asset descriptions

These documents help your tax professional determine depreciation and Section 179 eligibility.

Complete Final Reconciliations to Ensure Accuracy

Reconciliations are one of the most important steps in your year end close. They ensure that your financial statements accurately reflect your business activity.

1. Reconcile All Bank Accounts

Make sure:

• Every bank account activity matches your accounting records

• Outstanding transactions are reviewed

• Missing entries are corrected

Clean bank reconciliations make tax season significantly easier.

2. Reconcile Credit Card Accounts

Review:

• Charges that need categorization

• Duplicate entries

• Recurring expenses that may need updating

• Any fraudulent or unexpected charges

Accurate credit card reconciliations help maintain expense transparency.

3. Reconcile Payment Processor Accounts

For businesses using platforms such as Stripe, PayPal, or Square:

• Match income and fees

• Confirm deposits match bank statements

• Record platform fees correctly

This is one of the most commonly overlooked areas in small business bookkeeping.

4. Review Accounts Receivable

Review open invoices and identify:

• Any unpaid invoices you can collect

• Invoices that require follow up

• Invoices that may need to be written off

• Customers who consistently pay late

Cleaning up receivables improves cash flow and provides more accurate financial statements.

5. Review Accounts Payable

Ensure your vendor payments are in order by reviewing:

• Unpaid bills

• Recurring expenses

• Outstanding balances

• Vendor credits

You can also decide which bills to pay before year end to support cash flow planning and tax strategy.

Prepare for Tax Season with Organized Records

The final week of the year is the ideal time to prepare for tax season. By getting ahead now, you reduce stress and ensure accuracy.

1. Review Your Profit and Loss Statement

Your P and L shows your revenue, expenses, and profitability. Review:

• Revenue trends

• Expense categories

• Unexpected fluctuations

• Expenses that may need reclassification

This helps you identify tax opportunities and correct mistakes before filing.

2. Review Your Balance Sheet

Your balance sheet reflects your financial position. Review:

• Assets

• Liabilities

• Equity

• Business debt

• Loan balances

• Cash reserves

Understanding your position now helps you plan for 2026 and prepare for quarterly reviews.

3. Schedule Your Tax Preparation Appointment

Your tax professional will need:

• Year end financial statements

• Payroll information

• Expense documentation

• Asset records

• Any tax notices received in 2025

The earlier you schedule, the smoother your filing process will be.

4. Review Potential Tax Deductions and Credits

Before year end, consider:

• Charitable contributions

• Equipment purchases

• Retirement contributions

• Home office deductions

• Mileage

• Business improvements

Discuss your options with your tax professional to maximize savings.

Set Up January for a Strong Financial Start

Closing the books is not only about finishing 2025. It also sets the tone for 2026. A strong January launch leads to better decisions, more consistent habits, and greater financial clarity throughout the year.

1. Create a January Financial Checklist

Your January responsibilities may include:

• Reviewing cash flow projections

• Setting monthly revenue goals

• Updating subscription and vendor contracts

• Refreshing payroll schedules

• Confirming recurring expenses

• Finalizing Q1 priorities

A clear checklist prevents you from feeling behind when the new year begins.

2. Establish Your Q1 Goals and Strategy

Your Q1 strategy might include:

• Launching a new offering

• Improving invoicing and collections

• Upgrading your financial systems

• Hiring or onboarding team members

• Evaluating marketing campaigns

Clear Q1 planning keeps your financial vision aligned with your daily actions.

3. Strengthen Your Financial Systems for the New Year

Consider whether you need to:

• Upgrade accounting software

• Implement automated invoicing

• Improve workflows

• Adopt new financial dashboards

• Change bookkeeping processes

Better systems support better financial decisions.

4. Schedule Quarterly Reviews for 2026

Quarterly reviews help you:

• Stay accountable

• Adjust strategies

• Improve tax planning

• Maintain visibility over cash flow

• Strengthen profitability

Scheduling these reviews now helps you remain consistent all year long.

Finish 2025 Strong and Step Into 2026 With Confidence

The final week of the year is your opportunity to close your books with clarity, strengthen your financial foundation, and prepare for a smoother tax season. By completing your filing tasks, gathering your documents, reconciling your accounts, and setting up your January strategy, you give yourself the confidence and structure needed to make 2026 a more successful year.

If you want support completing your year end close or preparing for tax season, our team is here to help.

Schedule your year end financial review with Bernstein Tax Group and enter 2026 with clarity, accuracy, and a powerful sense of momentum.