November is when small problems in the books are cheapest to find. By March, they cost a lot more.
For most of my career, late October meant the same thing. Somebody at the bank would start asking whether we were ready for year end, everyone would say yes, and then we'd spend November finding out who was right.
Banks handle year end well because they treat it as a season rather than a date. The work starts weeks before December 31, and most of it is dull. Reconciling. Confirming balances. Clearing out things that should have been cleared out in June. By the time the date arrives, the close is mostly paperwork.
Small companies tend to do it the other way around. The owner is busy with the holiday rush, the bookkeeper is trying to get invoices out, and the accountant shows up in February asking for things nobody has looked at since spring. A question that would have taken five minutes in November takes an afternoon in March, and some can't be answered at all because the person who knew has moved on or forgotten.
This one is a composite, drawn from several owners I've worked with. A man I'll call Kwame owned a specialty food distributor with about twenty employees, and every year he closed the books in a hurry in January. One year his accountant asked about a difference of a little over nine thousand dollars between the bank statement and the books for October. Nobody remembered anything about it. His bookkeeper, a woman I'll call Joanne, spent three days tracking it down. It turned out to be a customer refund entered twice and a deposit that had bounced without anyone noticing. Neither one was fraud. Both would have taken twenty minutes to sort out in October, while the people involved still remembered what happened.
The close is easier
when you start before it.
Here's the list I'd work through between now and mid December. You won't finish it in a week, and you don't need to. Take two or three items each Monday.
Reconcile every account, every month. Bank accounts, credit cards, loans, merchant accounts, and payment apps like PayPal or Stripe if you use them. If any month this year was never reconciled, go back and do it now. Then have someone other than the bookkeeper look over the finished reconciliations and initial them.
Clear out the old items. Look for checks written months ago that were never cashed, deposits that were recorded but never showed up at the bank, and anything sitting in a suspense or "ask my accountant" account. Each one has a story. Find it while someone still remembers. Uncashed checks may also fall under your state's unclaimed property rules, so ask your accountant about those.
Walk through receivables. Go down the list of who owes you money. Call on the old balances. Decide with your accountant what is realistically uncollectible. A customer balance from eighteen months ago isn't really an asset just because it's on the report.
Walk through payables. Confirm every open bill is real and still owed. Look for duplicates, especially the same amount from the same vendor a few days apart, which is how most double payments happen.
Clean up the vendor list. Deactivate anyone you haven't paid in eighteen months. Make sure you have a current W-9 for every contractor who will need a 1099, and get the missing ones now rather than in the last week of January. I wrote more about the vendor file in Who can add a vendor?
Check payroll before the W-2s go out. Confirm addresses, confirm every name on the register belongs to someone who works for you, and confirm the year-to-date totals in your books match what the payroll provider reports.
Count what you own. If you carry inventory, count it and look hard at any gap between the count and the books. Look at the fixed asset list too. Equipment that was sold, scrapped or carried out the door years ago has a way of staying on the books.
Review who has access. Before the year turns over, run the review I described in Who still has a key? Former employees and old contractors shouldn't start a new year with a working login.
Talk to your accountant in November. Ask what they'll need from you and by when. Bring up anything you're unsure of while there's still time to act on it. Your accountant can do a great deal more for you before December 31 than after it.
Write down what you did. Note who did each step and when. Keep the reconciliations and reports together in one folder. Next October, you'll start from a list instead of a blank page, and if anyone ever asks how you know the numbers are right, you'll have something to show them.
One last suggestion. Put the first Monday of November on your calendar now, with item one next to it. Most of what goes wrong at year end comes from starting late.
If your accountant called tomorrow and asked about an odd number from October, who in your company would know the answer?
Want to know how your controls hold up? Start a conversation.