January belongs to whoever finished December clean. This is the checklist to run in the last weeks of the year — or the first week of January — so tax season is a handoff instead of a scramble.
The 12 steps
1. Reconcile every bank and credit card account through December 31. 2. Clear Uncategorized Income and Expenses to zero. 3. Empty Undeposited Funds — every received payment matched to a real deposit. 4. Verify loan balances against year-end statements, with payments split into principal and interest. 5. Record owner draws and contributions correctly — not as salary, not as expenses. 6. Collect W-9s and confirm totals for every contractor paid $600 or more.
7. Write off invoices that will never be collected. 8. Count and adjust inventory if you carry any. 9. Check for personal expenses that wandered onto business cards, and reclass them. 10. Confirm payroll totals tie to your payroll provider's annual reports. 11. Run the year-end P&L and Balance Sheet and scan for negatives and spikes that make no sense. 12. Lock the year with a closing date password so January edits cannot silently rewrite it.
If the year is too messy to close
When months of the year were never really done, the checklist above turns into a catch-up project first. That is a solved problem: our one-time cleanup is $500 flat however far back it goes, finished within 2 days — guaranteed in writing — and ends with exactly the CPA-ready package this checklist produces. Ongoing monthly service afterward is optional, $199/month, no contract either way.