Business Year-End Planning Checklist: 5 Essential Steps
SHARE
What is year-end business planning?
Year-end planning is more than just closing your books. It's your opportunity to learn from the previous year and set your business on the right track to achieve your goals for the upcoming year. Think of it as a strategic checkpoint where you assess what worked, what didn't, and where you want to go next.
When should you start year-end planning?
Now. The sooner you begin, the more time you'll have to make smart, strategic decisions before December 31st rolls around.
The 5-Step Year-End Planning Checklist
Step 1: Review Your Financial Reports
Your year-end financial reports give you a big-picture view of how your business functioned financially over the past year. You'll want to look at things like your company's balance sheet, profit and loss statements, and detailed cash flow reports.
In addition to your statements, you'll also want to reconcile all your accounts to ensure everything is balanced and nothing is outstanding.
What to review:
Balance sheet analysis
Profit and loss statements
Detailed cash flow reports
Account reconciliations
This tells you where your money came from, where it went, and what your business is worth right now.
Step 2: Evaluate This Year's Performance
Once you have a big-picture understanding of your business's performance from the previous year, you'll want to compare that information to the goals you set at the beginning of the year.
Key questions to answer:
Did you meet your annual goals?
What drove your successes?
What caused shortcomings?
What patterns emerged in your financial data?
This information will help you identify your strengths and weaknesses, which will be helpful in the next step.
Get feedback from your team: Your employees understand the operational drivers behind financial results. Collect their insights on what worked, what didn't, and what should change for the upcoming year.
Step 3: Set Goals for the New Year
Once you've taken the time to evaluate this past year, it's time to outline goals for the upcoming year. You'll want to use the information you've learned by reflecting on this past year to create realistic goals for what you want to achieve in the new year.
Best practices:
Base goals on actual performance data
Define specific success metrics for each goal
Align goals with available resources
Consider team feedback in goal setting
As with any plan, for each goal, make sure to outline how you'll measure success.
Step 4: Optimize Your Tax Planning Strategy
We all pay taxes. However, that doesn't mean we have to be caught off guard by them, and it doesn't mean they cannot be optimized.
With a constantly changing tax code, it is vital to review your tax planning strategy regularly so that you and your business can take advantage of any new tax advantages and plan for any expiring ones.
Key tax planning actions:
Review current year tax position
Identify available deductions and credits
Plan for timing of income and expenses
Evaluate entity structure efficiency
Prepare for upcoming tax law changes
Smart tax planning helps minimize your tax burden legally while avoiding year-end surprises.
Step 5: Create Your Budget for the New Year
The last step in your business's year-end planning should be creating a budget for the upcoming year. By doing this last, you'll be able to use the information from previous steps to make informed decisions about your new budget.
Things to consider:
Current financial realities from your year-end review
Insights from performance evaluation
New goals and priorities
Updated tax planning
This data-driven approach produces more accurate, effective budgets than starting from scratch.
How year-end planning benefits your business
Strategic year-end planning helps businesses:
Close the current year with financial clarity
Enter the new year with clear direction
Optimize tax positions proactively
Allocate resources more effectively
Build on successes and address weaknesses
Get Expert Help with Year-End Planning
With careful year-end reflection and planning, your business can finish the current year strong and get ready to start the new one on the right track.
Have questions about getting started? We're ready to help. Contact us to meet with our team of business advisory and business tax planning experts.