Year-End Prep: What you can do before December

Thinking about how to tidy up your accounts before the year ends?

As the year winds down, it’s the perfect time for sole traders and small businesses to get their financial house in order. In this guide, I’ll walk you through practical tips for preparing your accounts for year-end, planning for taxes, and setting a strong budget for the year ahead. It doesn’t have to be complicated, just a few simple steps can help you finish the year with clarity and confidence.

So, what does this actually look like in practice? Let’s break it down.

Preparing Your Accounts for Year-End
This is all about making sure your records are tidy, complete, and ready to go. There are a few things you can do to ensure that this is the case.

1. Check your income and expenses
Have you recorded all your business expenses?
Go through your receipts, invoices, and bank statements to make sure nothing’s missing. It’s easy to forget small purchases or subscriptions, but they add up. Are you VAT registered, do you know how to account for such transactions?
And what about your income?
Have you captured everything you’ve earned this year and considered things such as cut off! Whether it’s from clients, sales, or other sources, income is income, it’ll need to be jotted down.

Why it matters: Having a full picture of your income and expenses helps you understand how your business is really doing and makes tax time much smoother.

2. Reconcile your bank accounts
What this means is matching your bank statements with your bookkeeping records. Do both balances match back? Look out for any transactions that haven’t been recorded or any errors.

Why it matters: It helps catch mistakes early and ensures your financial reports are accurate. Don’t be afraid to keep on top of your bank and finances as it’s one of the best ways to stay in control, prepare for tax season, and keep your business on track.

3. Organise your receipts and invoices
If you’ve got paperwork scattered across emails, drawers, or apps, now’s the time to bring it all together. Try scanning paper receipts and storing everything in one folder or accounting system. If you have an accountant, do you know how they are storing your paperwork? Is it easy enough for you to access?

Why it matters: Well-organised records save you time and stress when filing taxes or applying for loans. You should also know how long to keep your records—HMRC recommends keeping financial evidence for at least six years, including receipts, invoices, and bank statements. This ensures you're covered in case of audits or queries.

4. Follow up on unpaid invoices
Check if any clients still owe you money. Send gentle reminders or follow-ups to get those payments in before the year ends. Make sure your invoices clearly state payment terms, due dates, and accepted payment methods. If you’re using accounting software, consider enabling automatic reminders or tracking overdue invoices to stay on top of collections.

Why it matters: It improves your cash flow and gives you a clearer view of your actual earnings. Strong cash flow is essential—it allows your business to cover day-to-day expenses, invest in growth opportunities, and handle unexpected costs without stress. It also makes your business more attractive to lenders and investors.

5. Review any bills you still need to pay
Look through your accounts payable, are there any bills or subscriptions you’ve forgotten to settle? Paying them off now can help tidy up your records and give you a clearer picture of your financial obligations.

Why it matters: It helps you avoid late fees and gives you a clean slate going into the new year. Strong financial records also make it easier to access credit or financing, as lenders often look for well-managed accounts and timely payments. Staying ahead of your bills keeps your business in good standing and helps you plan more effectively for the months ahead.

Planning for Taxes
This is about making smart choices before the year ends to avoid surprises later and possibly save money.

1. Know what you’ve earned and spent
Take a moment to look at how much money came into your business and what went out. This gives you a rough idea of what your tax bill might look like.

Why it matters: It helps you prepare both practically and financially, so you’re not caught off guard. Understanding your numbers early means you can plan ahead, set aside funds, and avoid last-minute stress when tax season arrives.

2. Buy what your business needs now
If you’ve been thinking about buying equipment, software, or supplies, doing it before December could help reduce your tax bill.

Why it matters: These purchases may count as business expenses, which lower your taxable income.

3. Claim what you’re allowed to
Spend some time going through your expenses especially those things like travel, subscriptions, or home office costs. Make sure you’ve kept receipts and records for everything you plan to claim.

Why it matters: Claiming legitimate expenses means you pay tax only on your actual profit, not your total income. This is key to effective tax planning. Do you know what’s allowable and what’s not? If you’re unsure, speak to your accountant or advisor—missing out on eligible deductions could mean paying more tax than necessary.

4. Talk to your accountant
Even a short conversation can make a big difference. If you have an accountant, don’t hesitate to reach out—they might spot savings, highlight missed opportunities, or help you feel more confident about your numbers.

Why it matters: A bit of advice now can save you money and stress later. And if you don’t have someone to talk to, we’re happy to help. Whether it’s a quick chat or a deeper dive, we’re here to make things easier.

5. Get your paperwork ready
Start gathering receipts, invoices, and bank statements now. Don’t wait until January when things get busy. You never know what you’ll end up missing when you are under pressure.

Why it matters: Being organised means faster filing and fewer mistakes.

Budgeting for the Year Ahead
Once your current year is wrapped up, it’s a great time to look ahead and plan for the next. Take this opportunity to reflect on what worked well and what didn’t, and use those insights to shape your financial strategy moving forward. Budgeting isn’t just about numbers—it’s about setting intentions and creating a roadmap for your business.

1. Review this year’s numbers
Look at what you earned and spent. Questions you can ask yourself: Were there any surprises? Did you overspend in some areas or do better than expected?

Why it matters: Understanding what happened this year helps you make better decisions next year.

2. Set goals for next year
Think about what you want to achieve: Is it more income, less spending, or maybe saving for something big?

Why it matters: Clear goals give you direction and motivation.

3. Create a Simple Budget and Use Tools That Help

Plan out your expected income and expenses month by month. It doesn’t have to be complicated—just clear enough to guide your decisions. This is also an area where we can support you. With years of experience, we can provide budget trackers and templates tailored to your business. Whether you want to manage it yourself or prefer a hands-off approach, we’re here to help make budgeting stress-free.

There are plenty of apps and spreadsheets that make budgeting easier. Find one that suits your style—whether it’s something visual, automated, or collaborative. The easier it is to track your money, the more likely you’ll stick to your plan.

Why it matters: A well-structured budget helps you stay on track, avoid overspending, and make informed decisions. Using the right tools makes budgeting simpler and more effective, turning it from a chore into a powerful business habit.

Getting your accounts in order, planning ahead for taxes, and setting a budget doesn’t have to be overwhelming. A few simple steps now can save you time, stress, and even money later.

Need a hand? We’re here to help. Book a free, no-obligation consultation and let’s get you set up for success.