As we approach the final stretch of the year, business owners across Texas are preparing for Q4 with a mix of anticipation and urgency. The transition from September into October, the beginning of Q4, marks a critical time to assess your financial records, streamline your bookkeeping, and ensure your business is positioned for a strong finish to this year.
No matter if you’ve been running your business for over ten years or navigating your first fiscal year, the importance of clean, accurate books cannot be overstated.
As CPAs, bookkeepers, and accountants, we see firsthand how proactive financial management in the Fall can prevent costly mistakes and missed opportunities come tax season.
The fourth quarter is not just about wrapping up the year, but we see it as time for setting the stage for success, now and leading into 2026.
Many business owners wait until December or even January to begin cleanup, but by then, it’s often too late to make strategic adjustments. Instead, use this window to get ahead. The following checklist is designed to guide you through the essential steps to prepare your bookkeeping for Q4 and beyond.
Step 1:
Start by reconciling your bank and credit card accounts. This may seem basic, but it’s the foundation of accurate financial reporting. Ensure that every transaction is accounted for and that your balances match your statements. Discrepancies should be investigated and resolved now, not later. If you use accounting software like QuickBooks or Xero, take advantage of automated reconciliation tools, but don’t rely on them blindly. Manual review is still essential.
Step 2:
Review your accounts receivable. Are there outstanding invoices that haven’t been paid? Follow up with clients and customers now to improve your cash flow before year-end. Consider offering early payment incentives or setting up payment plans for larger balances. On the flip side, examine your accounts payable. Are there bills you’ve overlooked or expenses that need to be recorded? Keeping both sides of your ledger current helps you understand your true financial position.
Step 3:
Payroll is another area that deserves attention. Verify that all employee records are up to date, including addresses, tax withholding, and benefit deductions. If you’ve issued bonuses, commissions, or reimbursements, make sure they’re properly documented. This is also a good time to review contractor payments and confirm that you have W-9 forms on file for each vendor or contract employees as this will reduce any hassle for preparing these 1099 filings in January.
Step 4:
Inventory management can be a hidden source of financial distortion. If you carry physical products, conduct a thorough inventory count and compare it to your records. Adjust for shrinkage, damage, or miscounts. Accurate inventory valuation affects your cost of goods sold and ultimately your taxable income. If you use a point-of-sale system or inventory software, ensure it integrates properly with your accounting platform.
Step 5:
Review your fixed assets and depreciation schedules. Have you purchased new equipment or vehicles this year? Make sure those assets are recorded and categorized correctly. Depreciation can be a valuable tax deduction, but only if your records are complete. If you’ve disposed of assets, document the sale or removal and adjust your books accordingly.
Step 6:
Don’t overlook your chart of accounts. Over time, businesses tend to accumulate redundant or misclassified accounts. Clean up your chart by merging duplicates, renaming vague entries, and ensuring consistency across categories. This will make your financial reports more meaningful and easier to interpret.
Step 7:
Speaking of reports, now is the time to run your profit and loss statement and balance sheet. Compare year-to-date performance with prior years and your budget projections. Are you on track to meet your goals? If not, identify areas for improvement. Perhaps expenses have crept up in certain categories, you had a major unexpected purchase for the business, or revenue is lagging in a key segment. Use this insight to make informed decisions for Q4.
Step 8:
Tax planning should also be on your radar. Meet with your CPA to estimate your tax liability and explore strategies to minimize it. This might include accelerating expenses, deferring income, or making retirement contributions. If you’re structured as an S-Corp or partnership, consider whether distributions or owner draws are appropriate before year-end. For sole proprietors, review your Schedule C and ensure all business-related expenses are captured.
Step 9:
If you receive any government assistance this year, such as grants, loans, or tax credits, make sure those funds are properly recorded and reported. Misclassification can lead to compliance issues or missed deductions. Documentation is key, especially for programs with specific reporting requirements.
Step 10:
Finally, consider your goals for the coming year. When your financial records are accurate and up to date, you can make better decisions about the future of your company that will help you secure better financing and can grow the business with peace-of-mind. Use this time to reflect on what worked in 2025, what big wins you can celebrate, and perhaps what did not work or prove success, and where do to take this business. Is it time to think about an exit and improving the value or are you looking to expand into new markets or audiences.
At Hemingway and Buchanan CPAs, we understand the unique challenges facing business owners. From oil and gas to high tech startups, retail shops, restaurants, to ranch operations, we’ve seen it all, and we care deeply about helping our clients meet their goals, improve cash flow, and meet tax obligations. Our team combines deep expertise in tax, bookkeeping, and financial strategy with a genuine commitment to your success.
As the calendar inches toward year-end, let us help you turn your financial records into a roadmap for the future. Whether you feel it is time to finally delegate your bookkeeping to an expert or need a trusted tax advisor, Hemingway and Buchanan CPAs are here for you. We believe in the power of clean and accurate books, and we’re proud to be your trusted resource. Let’s finish the year strong together. Visit HNBCPA.com to learn more about our services and to schedule a discussion.