Year-End Bookkeeping Checklist for Seattle Small Businesses

As the year winds down, many Seattle small business owners find themselves juggling more than just holiday sales, client deadlines, and payroll processing. Year-end bookkeeping tasks—such as organizing receipts, reconciling accounts, tracking deductions, and preparing tax documents—often get pushed to the last minute, creating unnecessary stress and financial confusion. But it doesn’t have to be that way. By following a clear, strategic year-end bookkeeping process, you can enter the new year with confidence, clarity, and a stronger financial foundation.

At Seattle Bookkeeping Service, we understand the specific challenges local business owners face—from B&O tax compliance to managing remote expenses and preparing tax-ready reports. Whether you run a boutique store in Ballard, a tech consultancy in South Lake Union, or a home-based creative business, this guide will help you finish your financial year strong.

Why Year-End Bookkeeping Matters

Year-end bookkeeping is more than just paperwork—it’s a strategic opportunity to evaluate your financial health, optimize your tax position, and set meaningful goals for the coming year.

Clean, accurate year-end bookkeeping helps you:

• Avoid tax mistakes that result in IRS penalties or overpayment
  
  

• Prepare seamlessly for CPA collaboration
  
  

• Gain insight into profitability, efficiency, and business growth
  
  

• Make better budgeting and expansion decisions for next year
  
  

By completing structured financial tasks now, you’ll save time, reduce stress, and position your business for smarter decision-making in the coming year.

1. Reconcile Accounts

The foundation of accurate bookkeeping is reconciliation. This means verifying that your internal accounting records match your external financial statements from banks, credit card providers, merchant accounts (PayPal, Stripe, Square), and accounting software.

Why it matters:

• Helps detect missing, duplicate, or incorrect entries
  
  

• Ensures accurate profit calculations
  
  

• Improves financial transparency
  
  

Steps to reconcile effectively:

• Match transactions between bank and software records
  
  

• Note discrepancies and resolve them before closing the year
  
  

• Review all merchant accounts that process payments
  
  

• Confirm that all transfers, refunds, and chargebacks are recorded
  
  

2. Organize Expenses and Maximize Tax Deductions

Many Seattle business owners unintentionally overpay taxes because they overlook valuable deductions. Proper categorization of expenses can significantly decrease your taxable income.

Common deductible expenses include:

• Home office and remote work expenses
  
  

• Software and digital tools (QuickBooks, Zoom, Adobe, Canva)
  
  

• Marketing and advertising, including website hosting
  
  

• Business travel, vehicle mileage, and client meetings
  
  

• Local business licenses and annual Washington State fees
  
  

• Professional services (legal, bookkeeping, consulting)
  
  

With professional bookkeeping support, you're far less likely to miss deductions that legally reduce your tax bill.

3. Prepare 1099s for Freelancers and Contractors

If you hired contractors, freelancers, virtual assistants, or service providers, you may be required to issue Form 1099-NEC. The IRS requires this form for all non-employee workers paid $600 or more during the year.

Failing to file 1099s on time can result in IRS penalties and compliance issues.

To prepare your 1099s properly, ensure you have:

• W-9 forms from all applicable contractors
  
  

• Correct payment totals for each contractor
  
  

• Accurate name, address, and EIN or SSN information
  
  

• A filing method (mail, electronic filing, or through your bookkeeper)
  
  

At Seattle Bookkeeping Service, we simplify 1099 tracking, processing, and filing—so you never miss deadlines.

4. Review Sales, Excise, and B&O Tax Compliance

Washington State businesses face unique tax obligations, including Business & Occupation (B&O) tax, which applies even if your business didn’t make a profit. This is often misunderstood by business owners moving from traditional income-based states.

Take time to review:

• Classification of your business type (retailing, wholesaling, services)
  
  

• Quarterly filing requirements (monthly, quarterly, or annual)
  
  

• Nexus and multi-state selling rules
  
  

• Sales tax collected through platforms like Shopify or Square
  
  

Having clean books helps you avoid overpayment and ensures accurate filing for B&O and local Seattle business taxes.

5. Review Profit & Loss (P&L) and Cash Flow Statements

Your P&L report gives you insight into your business’s true financial performance over the year. This is not just about tax filing—it’s essential for business planning and profitability analysis.

Use your P&L to answer:

• Which products or services were most profitable?
  
  

• Did expenses grow unexpectedly?
  
  

• Are there subscriptions you no longer use?
  
  

• What is your average monthly cash flow?
  
  

• Should you adjust pricing or renegotiate vendor agreements?
  
  

Understanding your cash flow better also helps prepare for seasonal slowdowns, hiring, and expansion.

6. Plan Ahead for the New Year

With your books clean and financial reports up to date, now is the perfect time to plan for the coming year.

Planning tasks may include:

• Setting your annual budget and cash flow targets
  
  

• Reviewing staffing needs and forecasting payroll expenses
  
  

• Reassessing your pricing, service packages, or vendor contracts
  
  

• Scheduling monthly or quarterly bookkeeping check-ins
  
  

• Identifying when you might need CFO-level financial strategy
  
  

December and January are ideal months to meet with your bookkeeper to plan for tax optimization, financial growth, and budgeting strategy.

Make This Your Most Organized Financial Year Yet

Year-end bookkeeping doesn’t have to feel overwhelming. With the right systems—and the right professionals supporting you—your financial processes can become smoother, more accurate, and more strategic.

At Seattle Bookkeeping Service, we help small businesses move from financial confusion to clarity. Whether you need year-end cleanup, 1099 preparation, B&O tax support, or full monthly bookkeeping, our local experts make the process stress-free and tailored to your business.

Start next year with clarity, not spreadsheets and stress.