Getting Your Business Ready for the New Year — Part 1: Year End Review and Reconciliation
As we approach the end of 2025 in Oregon, it's the perfect time to reflect and prepare for a stronger year ahead. To help with this, I'm excited to launch a three-part series on "Getting Your Business Ready for the New Year," tailored for Oregon entrepreneurs like you who are passionate about what you do.
During the coming weeks, we'll explore practical steps: starting with Year-End Review and Reconciliation, followed by Preparing for Tax Season, and wrapping up with Budgeting for Growth—each building on the last to uncover insights, drive improvement, and support confident decisions. Let's begin with the essentials: a thorough year-end review to ensure your books are accurate and ready for 2026.
Year-End Review and Reconciliation
As the calendar year closes, a thorough year-end review and account reconciliation is vital for Oregon small business owners. This process verifies accuracy, spots discrepancies, inefficiencies, or opportunities, and prevents costly errors while giving a clear view of your business's health. From my 32+ years in finance and operations, I've seen it lay the foundation for growth. Here's an actionable step-by-step guide:
Prepare a Schedule and Gather Materials: Dedicate time in December. Collect bank/credit card statements, receipts, invoices, and payroll records. Use cloud-based tools like QuickBooks Online or Xero to automate imports and minimize errors.
Reconcile All Accounts: Match internal records to external statements for banks, cards, loans, and merchant services. Resolve unmatched items (e.g., outstanding checks) promptly.
Categorize and Review Transactions: Ensure proper classification (e.g., cost of goods sold vs. operating expenses). Reclassify uncategorized items. This cleans books and reveals trends, such as rising costs for Cost of Goods sold.
Assess Accounts Receivable (AR) and Payable (AP): Check AR for collectability—follow up on overdue invoices and write off uncollectibles. Verify AP for duplicates. For inventory businesses, perform a physical count and adjust records.
Review Fixed Assets and Depreciation: List 2025 assets with cost, acquisition date, and business use percentage. Update schedules for accumulated depreciation. Basic tracking works in software, but complex IRS rules (e.g., MACRS, bonus depreciation at 100% for qualifying assets placed in service after January 19, 2025, or Section 179) often require a CPA's expertise to maximize deductions. This is key for Oregon's agriculture, manufacturing, or craft sectors.
Reconcile Payroll and Benefits: Confirm hours, wages, and withholdings against W-2s. Ensure compliance with Oregon paid leave and accurate recording of contributions (e.g., 401(k) or health plans).
Generate and Analyze Financial Statements: Prepare balance sheet, income statement, and cash flow statement. Review metrics like gross margins or liquidity ratios to identify patterns, such as seasonal dips in tourism or craft industries.
These steps build a solid foundation for smoother taxes and informed 2026 decisions. More importantly, they transform your books from a backlog of transactions into a treasure trove of insights—revealing inefficiencies to cut, opportunities to seize, and trends to leverage for sustainable growth and smoother operations. With accurate data as your guide, you'll make self-reliant choices with confidence, spending less time on numbers and more on doing what you love.
In Part 2 of the series, we’ll explore Preparing for Tax Season.
Need help bringing this to life? I'm Sanjay Reddy, founder of Willamette Way Bookkeeping & Consulting™. I partner with fellow Oregon small business owners, drawing on 32 years in finance, operations, and Lean process improvement to clean your books and streamline your systems.
Clean books → clear insights → less waste → confident growth.
I handle the numbers and systems. You focus on doing what you love—better.
Ready to find a better way together? Let’s talk during a free consultation.
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