Year-End Financial Checklist for $MM Agencies, Startups, & Scale-ups
The end of the year can feel overwhelming for businesses balancing growth with financial housekeeping. Here’s a checklist to simplify year-end tasks and start 2025 with clarity:
1. Tax Positioning
Meet with your tax advisor: Review your numbers to analyze potential liabilities, deductions, or credits and make any final adjustments before year-end.
Accelerate expenses (cash-basis): Prepay expenses like software subscriptions, rent, or contractor invoices to lower taxable income for 2024.
Delay income (cash-basis): Push expected payments into January, where possible, to manage taxable revenue for the current year.
Maximize retirement contributions: While some plans, like SEP IRAs, allow contributions to be made after year-end (up to your tax filing deadline, e.g., April 15, 2025), knowing your contribution amounts now can help you finalize your tax strategy and plan for cash flow.
Review tax credits: Check for R&D credits, energy-efficient deductions, or other relevant tax incentives that may apply.
One of our clients, an agency , was able to reduce their tax liability by accelerating certain expenses and cleaning up deferred revenue balances - simple adjustments that made a big difference heading into the new year.
2. Clean Up Your Financials
Reconcile all accounts: Double-check bank accounts, credit cards, loans, payroll, and intercompany balances for accuracy.
Write off bad debts: Identify uncollectible invoices and clear them from your receivables to tidy up your balance sheet.
Review fixed assets: Adjust for asset purchases, disposals, or depreciation to ensure your books are accurate.
Clear out stale liabilities: Identify and resolve any lingering payables or accrued expenses that no longer apply.
3. Performance and Budgeting
Review your 2024 actuals: Compare your budget to actual performance—look at revenue, margins, and expenses to identify trends and opportunities.
Build your 2025 budget: Use your insights from 2024 to create a clear, data-driven plan for next year’s growth. Factor in hiring, investments, and cost adjustments.
Update your forecasts: Revisit your financial model to stress-test scenarios (best case, worst case) and plan for cash flow needs.
4. Owner and Employee Considerations
Evaluate distributions and bonuses: Decide now how to allocate owner draws or employee bonuses while aligning with your tax strategy.
Review payroll compliance: Ensure all wages, benefits, and contractor payments are properly recorded for year-end reporting (W-2s, 1099s).
5. Systems and Processes
Clean up your software stack: Make sure all systems are integrated, accurate, and working together seamlessly.
Prepare for 1099 filings: Confirm vendor details are up-to-date and flag anyone needing a 1099 for payments made this year.
Check internal controls: Review workflows for approvals, expenses, and reporting to prevent errors or oversights next year.
For Accrual-Based Businesses:
Review revenue recognition policies: Ensure revenue is recognized in the correct periods (e.g., monthly for subscriptions, project milestones for long-term contracts). Aligning revenue with delivery keeps your financials accurate and investor-ready.
Audit deferred revenue balances: For prepayments covering 2025 services, ensure this income is deferred to 2025 on your balance sheet to keep reporting accurate.
Accrue year-end bonuses and expenses: If you plan to pay bonuses or incur significant expenses in early 2025, accrue them in December to align costs with the 2024 fiscal year.
Check prepaid expenses: Spread out large, upfront annual costs (like insurance or software) across the appropriate periods instead of recognizing them all at once.
Reminder: What is a Cash-Based vs. Accrual-Based Businesses?
Cash-based businesses recognize income when cash is received and expenses when cash is paid. Year-end planning often focuses on timing: delaying income and accelerating expenses to manage taxable income.
Accrual-based businesses recognize income and expenses when they are earned or incurred, regardless of cash flow. Year-end priorities focus on accuracy: ensuring revenue, expenses, and liabilities are properly recorded in the correct period.
Taking the time to wrap up these tasks means fewer surprises when January hits—and a clean foundation for smarter decision-making in 2025.
Every business is different, and the best year-end strategy depends on your unique goals and challenges. If you’re tackling these tasks and wondering where to start, I’d be happy to share how we’ve helped other $MM businesses streamline their year-end processes.
Wishing you a successful close to 2024 and a prosperous 2025! — Kirsten
At Verte Consulting, we help $MM businesses streamline back-office systems and turn data into smarter strategies. Whether it’s year-end planning or long-term growth, we make sure your financial systems work for you—not the other way around.
