November 17, 2025

You know that knot in your stomach that starts forming around this time of year? The one that whispers, "Tax season is coming, and your books are a mess"? Take a deep breath. You're not alone in feeling this way, and more importantly, you're not stuck.

November is actually the perfect time to tackle your year-end bookkeeping prep. Think of it like getting your house ready for guests, you wouldn't wait until they're knocking on your door to start cleaning, right? The same logic applies to your books and tax season.

The beauty of starting now is that you can work at a manageable pace instead of pulling all-nighters in March. Let's walk through seven straightforward tasks that will transform your bookkeeping from chaotic to tax-ready. By the time December rolls around, you'll be sipping your coffee with confidence instead of scrambling through receipts.

1. Reconcile All Your Accounts (Yes, All of Them)

If your books were a puzzle, reconciling your accounts would be like making sure all the edge pieces are in place first. This foundational step compares what your bank says you have with what your bookkeeping records show.

Start with your primary business checking account, then move through savings, credit cards, and any other business accounts. Don't skip the credit cards: they're often where small discrepancies hide and grow into bigger headaches later.

Here's the thing: every month you skip reconciling makes this task exponentially harder. But even if you're months behind, tackling this now beats facing it during tax season when your accountant is breathing down your neck.

Look for any transactions that appear in your bank statement but not in your books, or vice versa. These could be bank fees you forgot to record, deposits that haven't cleared, or checks that are still outstanding. Each discrepancy is like a loose thread: pull it now before it unravels your entire financial picture.

2. Categorize Every Single Expense

Think of expense categorization as organizing your financial closet. Right now, everything might be thrown into a giant pile labeled "stuff," but come tax time, you need to know exactly where your "office supplies" are versus your "business meals."

Go through each transaction and make sure it has a clear, specific category. But here's the crucial part: also ensure every expense shows who you paid and why. That $47.83 charge at the office supply store? Note what you actually bought. That payment to "Johnson Services"? Add a memo explaining what service they provided.

This level of detail isn't busy work: it's your insurance policy. If the IRS ever questions a deduction, you want to be able to point to clear records, not play detective with mysterious charges from eight months ago.

Pay special attention to mixed-purpose expenses. That dinner with a client where you also ate? Make sure it's properly categorized as a business meal, not lumped in with personal dining. These details matter more than you might think.

3. Complete Your Annual Inventory Count

If your business holds inventory, this task is like taking a snapshot of your financial health. You need to know exactly what you have on hand as of December 31st, because this number directly affects your cost of goods sold and, ultimately, your taxable income.

Don't just estimate or rely on your computer system: physically count everything. Your accounting software might say you have 100 widgets, but if you actually have 95, that discrepancy affects your bottom line.

Set aside dedicated time for this task when you won't be interrupted. Count everything once, then do a second count of high-value items to double-check your accuracy. Document not just quantities, but also note any damaged or obsolete inventory that might need to be written off.

This process often reveals surprising insights about your business. You might discover slow-moving products that are tying up cash, or realize you're running lower on popular items than you thought. These insights become valuable for planning your next year's purchasing and marketing strategies.

4. Back Up Your Files and Lock Down Your Data

Imagine if your computer crashed tomorrow and took all your financial records with it. Terrifying, right? This is why backing up your data isn't just smart: it's essential for your business survival.

Create complete backups of all your bookkeeping files, accounting software data, and supporting documents. Don't just rely on cloud storage: have multiple backup methods. Save copies to an external drive, upload to secure cloud storage, and consider keeping physical copies of your most critical documents in a fireproof safe.

Once your backup is complete, set a closing date in your accounting software for December 31st and protect it with a password. This prevents any accidental changes to your year-end numbers after you've finalized everything. Think of it as putting a protective shield around your completed work.

This step gives you incredible peace of mind. You'll know that no matter what happens, your financial records are safe and your year-end numbers can't be accidentally altered.

5. Get a Head Start on 1099 Preparation

If you paid any independent contractors, freelancers, or service providers $600 or more during the year, you're required to issue them 1099 forms by January 31st. Starting this process in November means you won't be frantically gathering information during the holidays.

Create a list of everyone who might need a 1099, then gather their taxpayer identification numbers (either Social Security Numbers or Employer Identification Numbers) and addresses. You should have collected this information on Form W-9 when you first started working with them, but if you didn't, request it now.

Don't forget about other types of 1099s either. Did you pay rent to an individual landlord? That might require a 1099-MISC. Made payments to attorneys for legal services? Another 1099-MISC situation.

Getting this organized now means you can issue forms promptly in January, keeping your contractors happy and keeping you compliant with IRS requirements. Plus, you'll avoid the annual scramble that leaves many business owners stressed and behind schedule.

6. Compare This Year to Last Year's Tax Return

Pull out last year's tax return and lay it next to your current year's financial reports. This comparison is like having a conversation between your past and present financial self: and it often reveals important insights.

Look for significant changes in income or expenses. Did your revenue jump dramatically? Great, but make sure you've set aside enough for the additional taxes. Did certain expense categories shrink or grow unexpectedly? This might reveal trends in your business or highlight areas where you need better tracking.

Pay particular attention to any adjusting entries your accountant made last year. These are changes made during tax preparation that adjusted your books to match what was actually filed. Understanding these adjustments helps you anticipate similar needs this year and ensures consistency in your reporting.

This comparison also helps you spot potential red flags early. If something looks dramatically different from last year, you have time to investigate and correct it now, rather than rushing to explain discrepancies during tax preparation.

7. Implement Strategic Year-End Tax Planning

November is your last chance to make moves that can significantly impact your tax bill. Think of this as the final quarter of a football game: you still have time to score, but you need to act quickly and strategically.

If you have investments in your business that have lost value, consider selling them to offset any capital gains (this is called tax-loss harvesting). The losses can reduce your taxable income, but you need to complete these transactions before December 31st.

Review your charitable giving for the year. If you typically make donations, consider accelerating some of next year's planned giving into this year to increase your deductions. Just make sure any donations are completed by December 31st to count for this tax year.

Look at your retirement contributions too. If you haven't maxed out your business retirement plan contributions, you might want to make additional contributions before year-end. These contributions can reduce your taxable income while building your future financial security.

Finally, review your estimated quarterly tax payments. If you've been underpaying, you might want to make an additional payment in December to avoid penalties.

Your Path Forward

By tackling these seven tasks in November, you're not just preparing for tax season: you're taking control of your business's financial health. Each completed task is like laying another brick in a solid foundation that will support your business growth.

Remember, you don't have to handle all of this alone. If any of these tasks feel overwhelming or if you discover issues that need professional attention, that's exactly what bookkeeping professionals are here for. We've guided countless business owners through this process, turning tax season stress into confidence and clarity.

The goal isn't perfection: it's progress. Every step you take now makes your tax preparation smoother and your financial picture clearer. And when April rolls around, you'll be thanking your November self for the gift of preparation and peace of mind.

Need support getting your books tax-ready? Reach out to us and let's work together to make this tax season your smoothest one yet.