Year-end checklist for small service businesses

Year end tends to arrive as a scramble: receipts in a shoebox, a few invoices nobody sent, and an accountant asking questions you cannot answer quickly. It does not need to. Work through this list in the last few weeks of your financial year and most of the scramble disappears.

A note before you start: the tax and filing rules differ from country to country, and your accountant knows which apply to you. This checklist covers the operational side, the part only you can do.

Invoices and money owed to you

• Invoice every piece of finished work, including the small jobs that slipped through.
• List every unpaid invoice, oldest first, and chase each one on your usual schedule.
• Decide, with your accountant, what to do about any debt that will not be paid.
• Check that every payment received is recorded against the right invoice.
• Note your slowest payers, and change their terms for next year.

Expenses and receipts

• Make sure every expense has its receipt attached, and every receipt is recorded.
• Check each expense is in the right category, and tagged to the job it was for.
• Reconcile what you have recorded against your bank and card statements.
• Look for subscriptions and regular costs you no longer use, and cancel them.

Jobs

• Close every finished job, with its final invoice sent.
• For jobs running across the year end, note what has been billed and what is still to bill.
• Compare what each job was quoted with what it actually cost, and note the jobs that ran over.
• Identify your most and least profitable kinds of work. Our article on job costing explains how.

Customers and pipeline

• Tidy your contact list: merge duplicates, fill in missing details.
• Review your open leads and quotes, and close the ones that are not coming back.
• Thank your best customers, and ask the happiest ones for a review or a referral.
• Look at where your won work came from, and plan next year's marketing around it.

Prices and rates

• Review your costs for the year, and check your hourly rate still covers them. The hourly rate calculator helps.
• Check the margins on your most common jobs with the profit margin calculator.
• Decide on any price increase, and tell existing customers ahead of time.
• Update your saved rates and items so next year's quotes use them.

Team and access

• Remove access for anyone who has left, from every system.
• Check that every current team member has the right role, and no more access than they need.
• Make sure owners and admins use two-factor sign-in.

Software and data

• Export a full copy of the year's data and store it somewhere safe.
• Check your backups, and that you know how to restore from them.
• Review what you pay for software, per person, against what you use. The software cost calculator adds it up.

Look back before you look forward

Before planning next year, spend half an hour on what this year taught you. Three questions are enough:

1. What made money? The kinds of job, the clients and the sources of work with the best margins.
2. What cost money? The jobs that ran over, the clients who paid late, the tools nobody used.
3. What took time? The admin that ate your evenings, and whether it could be automated.

Write the answers down. They are the raw material for every decision in the next section.

Next year

• Work out your break-even point for next year with the break-even calculator.
• Set a simple target: revenue, number of jobs, or average job value.
• Choose one process to improve, such as faster invoicing, fewer no-shows or better follow-up, and make it the focus of the first quarter.

When to start

Start about six weeks before your year end, not the week after it. That gives you time to invoice finished work, chase what is owed while it can still land in this year, and gather receipts before memories fade. Put three sessions in the calendar: one for invoices and receipts, one for jobs and customers, and one for prices and planning.

Before you meet your accountant

Your accountant can do far more with an hour of your time if you arrive prepared. Bring, or send ahead:

• your list of unpaid invoices and any debts you think will not be paid;
• confirmation that every receipt is recorded and categorized;
• a note of any large purchases, such as equipment or a vehicle;
• any changes in the business: new staff, a new location, a new line of work;
• your questions about next year, such as whether to change how you pay yourself.

If your invoicing and expenses already sync with your accounting software, much of this is simply there for them to see.

What to keep, and for how long

Every country sets its own rules on how long business records must be kept, and they are often several years. Ask your accountant what applies to you, then make sure your invoices, receipts, bank statements and payroll records are stored somewhere safe, backed up, and easy to find if anyone asks.

Make next year's close easier

The easiest year end is the one where the records were kept as the year went on. In grewray, invoices, payments and expenses are recorded against the jobs they belong to as the work happens, receipts are captured on your phone, everything syncs with QuickBooks Online, Xero or Zoho Books, and you can export all of it, free, whenever you like. See invoicing and expenses.