January Bookkeeping Checklist
Essential Tasks to Start the Year Right
As the new year begins, January is the perfect time for small business owners to review, organize, and plan their bookkeeping and accounting efforts. At Tend Bookkeeping, we understand how critical this month is for setting the tone for a successful year. Here is a comprehensive checklist of bookkeeping tasks to focus on in January:
1. Close Out the Previous Year
Before diving into the new year, ensure that your books for the prior year are fully reconciled and accurate. Key steps include:
Bank Reconciliations: Match your bank statements with your accounting records to ensure all transactions are accounted for.
Expense Categorization: Double-check that all expenses are categorized correctly to maximize tax deductions.
Review Accounts Receivable and Payable: Ensure that all outstanding invoices and bills are recorded and addressed.
Adjust Journal Entries: Post necessary year-end adjustments, such as depreciation or accruals, with the advice of an accountant or tax professional.
2. Prepare for Tax Season
Tax preparation is a top priority in January. Getting organized early will save you time and stress as deadlines approach:
Compile Year-End Reports: Generate profit and loss statements, balance sheets, and other essential financial reports for your tax preparer.
Organize Tax Documents: Gather W-2s, 1099s, and receipts for deductible expenses.
Verify Employee and Contractor Information: Double-check that all names, addresses, and tax identification numbers are correct.
3. Issue 1099s to Contractors
If you’ve paid independent contractors $600 or more during the year, you must provide them with Form 1099-NEC by January 31. Be sure to:
Review contractor payments.
Confirm addresses and EIN/SSN details.
Use bookkeeping software or a payroll service to streamline 1099 preparation.
4. Analyze Your Business Performance
Take time to review your company’s financial performance from the past year to inform your strategy for the coming year:
Key Metrics Review: Look at revenue growth, profit margins, and cash flow trends.
Budgeting: Compare last year’s actuals to your budget and set realistic goals for this year.
Identify Opportunities: Highlight areas for cost-cutting, revenue growth, or efficiency improvements.
5. Update Your Bookkeeping System
A new year is an excellent opportunity to implement improvements in your bookkeeping processes:
Review Software Subscriptions: Ensure you’re using the best accounting software for your business’s needs.
Automate Repetitive Tasks: Set up rules or tools to streamline workflows.
Back Up Data: Create a secure backup of last year’s financial data.
6. Plan for Quarterly Tax Payments
For businesses required to make quarterly estimated tax payments, the Q4 payment is due by January 15. Ensure you’ve calculated the correct amount and submitted it on time.
7. Communicate with Your Bookkeeper or Accountant
If you work with a bookkeeping or accounting professional, now is the time to collaborate closely:
Schedule a meeting to discuss the past year’s financials and upcoming goals.
Share any significant changes in your business, such as new revenue streams, staff additions, or planned investments.
Kickstart the Year with Confidence
By tackling these essential bookkeeping tasks in January, you’ll ensure your business starts the year on solid financial footing. At Tend Bookkeeping, we’re here to help you every step of the way, from year-end reconciliations to preparing for tax season and strategic planning.
If you’re ready to make 2025 your business’s best year yet, let’s talk. Contact us today to schedule a consultation and see how we can support your bookkeeping needs!
