Start your year-end cleanup in early November. That gives you time to reconcile every bank and credit card account, clear out Undeposited Funds, settle old payables and receivables, check payroll and 1099 details, and hand your CPA clean records before the holidays.
Waiting until December gets you the same work with less room to fix anything. Your bank is slower to answer questions, your customers are out of office, and your CPA's calendar fills up. A missing receipt in early November is a ten-minute search. In the last week of December, it's a guess.
This article previews next week's podcast episode, "Year-End Cleanup Starts before December," which publishes Monday. Think of it as the checklist you can print and start on today. The episode covers the full walkthrough.
Key takeaways
- Reconciling every bank and credit card account through October gives you a clean base before the year's final transactions pile up.
- Undeposited Funds, old open invoices, and unpaid bills distort your financial statements until you clear or correct them.
- Payroll and 1099 problems are the hardest to fix after year-end, so check names, tax IDs, and payment totals now.
- A CPA who receives clean, reconciled books early can plan with you instead of just filing for you.
Why early November beats the December rush
Picture a Tuesday afternoon, December 22. You open QuickBooks to finish the year and find a checking reconciliation that stopped in July. Three customer payments sit in Undeposited Funds, but the bank shows one combined deposit. A contractor you paid in March has no W-9 on file, and he's on a road trip until January.
None of those problems is hard on its own. Together, with a few days left and everyone else also wrapping up, they turn into a scramble. Each one is also a place where an estimate gets filed instead of a fact.
November gives you slack. Vendors answer email, your bank can send missing statements, and you still have time to ask a customer whether that invoice from spring was ever going to be paid. You also get a preview of your tax picture while there's still time to act on it. Your CPA can tell you what's worth doing before December 31, and not just what you should have done.
Starting early also keeps cleanup small. Two or three hours a week across November is easier on you than a full weekend in the last days of the year.
The year-end cleanup checklist at a glance
Here's the whole job on one screen. The steps below go through each row in detail.
| Task | What you're checking | Where to look in QuickBooks Online | Why do it early |
|---|---|---|---|
| Reconcile bank and credit cards | Every account ties to its statement, month by month | Reconcile page; Reconciliation Discrepancy report | Old errors hide inside months you've already closed in your head |
| Clear Undeposited Funds | Payments received that never matched a bank deposit | Undeposited Funds account; Bank Deposit screen | Income and cash look wrong until it's zero or explained |
| Clean up payables and receivables | Old bills, unpaid invoices, duplicate entries | A/P and A/R Aging Summary reports | Stale balances inflate what you owe and what you're owed |
| Review payroll and 1099s | Employee and contractor details, payment totals, tax IDs | Payroll reports; Contractors list | Missing W-9s and wrong totals take weeks to resolve |
| Close gaps for your CPA | Uncategorized items, open questions, support documents | Uncategorized accounts; Audit Log; Trial Balance | Your CPA works from facts instead of assumptions |
The November cleanup, step by step
Reconcile every bank and credit card account
Reconciliation comes first because everything else depends on it. If a bank account doesn't match its statement, you can't trust the income, expenses, or cash balance that flow from it.
Work through each account (checking, savings, every credit card, any loan or PayPal-style clearing account) and reconcile through the October statement. Start with the oldest month that's unreconciled. If you hit a discrepancy, run the Reconciliation Discrepancy report in QuickBooks Online. It shows which transactions were changed or deleted after a past reconciliation, which is the usual culprit.
Check the Banking page too. Anything still in the "For review" tab is a transaction QuickBooks has seen but you haven't categorized or matched. Clear it now. Duplicates created when a bank feed and a manual entry both recorded the same payment are common here.
Clear out Undeposited Funds
Undeposited Funds is a holding account. When you record a customer payment without choosing a bank account, QuickBooks parks it there until you group it into a deposit. Over a year, things get stuck: payments you deposited but never matched, or deposits you entered twice.
Open the account and look at the balance. By year-end it should be zero, or hold only payments that really haven't reached the bank. For everything else, match each payment to the actual bank deposit using the Bank Deposit screen. If your bank shows one lump deposit for three customers, group those three payments together so the deposit amount matches.
Leftover balances that aren't real money need an adjusting entry, and that's where a second pair of eyes helps.
Settle old payables and receivables
Run the A/R Aging Summary and the A/P Aging Summary and look at everything in the oldest columns. Those columns are where cleanup lives.
On the receivables side, ask what happened to each old invoice. Did the customer pay and the payment got applied to the wrong invoice? Is it a duplicate? Is it a genuine bad debt you should write off? Each answer leads to a different fix. A write-off lowers your income, so it's a conversation to have with your CPA first.
On the payables side, you'll often find bills you already paid by check or card that were never matched to a payment, so QuickBooks still shows you owing them. Link the payment to the bill and the balance disappears. If a vendor really is owed, make a note to pay it or dispute it before year-end.
Review payroll and 1099 details
Payroll errors are expensive to correct after the year closes, because the numbers feed forms that go to the IRS and your employees. Pull your payroll summary and check that each employee's name, address, and Social Security number are right. Confirm that payroll tax liabilities you've recorded match what you actually paid.
For contractors, open your Contractors list in QuickBooks Online and confirm each one has a current W-9 on file, a correct legal name, and a tax ID. Then check payment totals against what you expect. A contractor paid by credit card typically doesn't go on a 1099-NEC, because the card processor reports those payments, but a payment by check or bank transfer does. Payments coded to the wrong expense account can leave someone off your 1099 list.
Do this in November and you have weeks, not days, to chase down a missing W-9 before the January filing deadline.
Close the gaps for your CPA and taxes
Last, prepare what your CPA will ask for. Start with the Uncategorized Expense, Uncategorized Income, and Ask My Accountant accounts. They should be empty, or you should be able to explain what's in them. Reclassify what you can and write a short note on what you can't.
Then run the Trial Balance and skim it. Look for accounts with odd balances: a negative asset, an Opening Balance Equity entry that never got resolved, or a loan balance that doesn't match your lender's statement.
Finally, gather what supports the year: loan statements, asset purchase receipts, and any large one-time transactions. Send your CPA a short summary with the questions you have. You'll get answers while there's still time to act on them.
A simple schedule and when to bring in help
You don't need a block of free days. A realistic November looks like this:
- Week one: Reconcile all bank and credit card accounts through October.
- Week two: Clear Undeposited Funds and the "For review" queue.
- Week three: Work through aging reports for payables and receivables.
- Week four: Review payroll, collect missing W-9s, and tidy uncategorized accounts.
Then in early December you reconcile November, send your CPA the package, and spend the rest of the month on the business instead of the books.
If you open the file and find a year of reconciliations to catch up on, that's the case for outside help. We coordinate directly with your CPA so you aren't the go-between, and we work in QuickBooks every day.
Monday's podcast episode walks through this checklist screen by screen. Listen with QuickBooks open and you can fix things as you hear them.
Frequently asked questions
When should I start year-end bookkeeping cleanup?
Start in early November. That leaves enough time to reconcile through October, chase missing documents, and send your CPA a finished package before December gets busy. If you're already behind, start now, and work from the oldest unreconciled month forward.
What should Undeposited Funds be at year-end?
It should be zero, or equal only to customer payments that truly haven't reached your bank yet. A balance that lingers usually means payments were deposited but never matched, or deposits were recorded twice. Match each payment to its bank deposit to clear it.
How do I know which contractors need a 1099?
Generally, contractors you paid by check, cash, or bank transfer for services during the year, and who aren't paid through a card processor, may need one, subject to the IRS reporting threshold. Confirm each has a W-9 on file, then review payment totals in QuickBooks. Your CPA can confirm edge cases.
Can I fix old reconciliation errors in QuickBooks Online?
Yes. Run the Reconciliation Discrepancy report to see which transactions were edited or deleted after a past reconciliation, then restore or correct them. If the history is tangled, a bookkeeper can rebuild it month by month so the balances finally tie to your statements.
What does my CPA need from me at year-end?
Your CPA needs reconciled bank and credit card accounts, clean aging reports, payroll and 1099 records, and a Trial Balance with no unexplained balances. Add a short list of open questions and any documents for large or unusual transactions. The cleaner the books, the less time your CPA spends on cleanup.
What to do next
Open QuickBooks this week, pick your oldest unreconciled account, and reconcile it through October. Everything else on the list gets easier once that one ties out.
Skip it, and December arrives with the same problems plus a deadline: estimates in place of facts, a CPA working from guesses, and 1099 and payroll errors you find too late to fix cleanly. Books cleaned in November leave your December free for the work you love.
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