2025 Year-End Accounting: How to Close the Books with Confidence

December 29, 2025

By: Paul Ursich

Partner, Advisory

As December 2025 comes to a close, finance and accounting teams are focused on one of the most important responsibilities of the fiscal year: the year-end close. This process is essential for producing accurate financial statements, ensuring regulatory compliance, preparing for tax filings, and supporting strategic planning for the year ahead.

Yet for many organizations, year-end can feel overwhelming. The good news? Clear processes, strong month-end discipline, and a focused checklist can transform what is often a stressful season into a well-managed and predictable workflow.

Why Year-End Closing Matters

Year-end closing provides a clear, accurate picture of a company’s financial health. Properly completed, the process ensures that:

Revenue and expenses are accurately recognized
Assets and liabilities reflect their true value
Key financial statements provide reliable insights
The organization is prepared for tax filings and audits
Leadership has confidence in the numbers guiding 2026 decisions

Many of the challenges companies face at year-end stem from inconsistencies and unaddressed issues throughout the year. Maintaining disciplined month-end practices helps reduce surprises, strengthen internal controls, and improve the accuracy of year-end results.

Strengthen Your Monthly Closing Process

A disciplined monthly close sets the stage for a smoother year-end. Core practices include:

Standardizing your close checklist so each month follows the same required steps

Scheduling recurring deadlines for reconciliations, invoice submissions, and reviews

Ensuring clear communication with departments to gather required information on time

Leveraging automation tools to reduce manual entry and improve accuracy

Organizations that maintain these habits throughout the year experience a far more efficient December close.

The Streamlined 2025 Year-End Accounting Checklist

This focused checklist highlights the most essential tasks to complete before finalizing the books for 2025.

1. Reconcile Key Accounts

Bank and credit card accounts
Accounts receivable and payable
Loan balances
Major accruals and prepaids

These reconciliations ensure the financial statements rest on accurate, supportable balances.

2. Record Critical Adjusting Entries

Accrued expenses and earned-but-unbilled revenue
Depreciation and amortization
Bad debt write-offs
Inventory or fixed asset adjustments

These adjustments help align the year-end financials with true operational activity.

3. Finalize Core Financial Statements

Income statement
Balance sheet
Cash flow statement

Review each statement for unusual trends or variances that may require clarification or supporting detail.

4. Clean Up Payables, Receivables & Vendor Records

Collect missing vendor invoices
Follow up on overdue customer payments
Update vendor records, including W-9s
Verify outstanding credit memos or unapplied payments

This review supports accurate reporting and strengthens cash flow visibility entering 2026.

Understanding and Completing the 1099 Reporting Process

Form 1099 reporting is a critical component of year-end compliance, particularly for businesses that work with contractors, freelancers, and unincorporated service providers. The process includes:

Identifying all vendors requiring 1099s, such as individuals, LLCs taxed as sole proprietors, and partnerships that provided $600 or more in services

Confirming W-9 forms are on file to ensure accurate taxpayer identification numbers and reporting classifications

Reviewing vendor payments to ensure amounts are properly categorized as 1099-eligible (services, rents, legal fees)

Preparing and issuing Forms 1099-NEC or 1099-MISC as applicable

Submitting copies to the IRS by the regulatory deadline

Maintaining documentation supporting all amounts reported and vendor classifications

Completing this process accurately helps avoid IRS penalties and ensures vendors receive timely and correct reporting for their own filings.

Common Year-End Challenges and How to Avoid Them

Organizations typically encounter several recurring challenges during year-end. The most common include:

Missing documentation, such as receipts, invoices, or support for adjustments

Manual data entry errors resulting from high-volume work under tight deadlines

Inconsistent processes that cause steps to be overlooked or completed differently each month

Departmental delays when information must be gathered from outside the finance team

Unreconciled accounts that create last-minute adjustments and uncertainty

A clear checklist, strong internal communication, and the use of automation can significantly reduce these challenges.

Finish 2025 Strong and Start 2026 with Clarity

A well-executed year-end close ensures accurate financial reporting, positions the organization for a smoother audit and tax season, and provides leadership with reliable insights for 2026 planning.

By maintaining strong month-end habits, following a streamlined closing process, and completing essential compliance tasks such as 1099 reporting, businesses can close out 2025 with confidence and begin the new year on solid financial footing.

Ready to streamline your year-end close? Contact Wiss to learn how our outsourced and co-sourced accounting services and technology solutions can help your finance team close faster and with greater accuracy.