Year-end preparation is not an event. It is a process. The organizations that arrive at the new year with clean books, a clear plan, and a head start are the ones that ran the process deliberately rather than reacting to it in the final weeks. This post walks through the five-step system that applies to both June 30 and December 31 fiscal year-end organizations, with a parallel track for businesses and nonprofits at each step.
For June 30 organizations, the ideal start window of 90 days out is behind you. That is not a reason to skip the system. Running all five steps in compressed form over the next two weeks still produces materially better outcomes than an unstructured close.
The System: Two Tracks, Five Steps
Every step in this system runs on two parallel tracks: one for calendar-year small businesses working toward December 31, and one for nonprofits on a June 30 fiscal year close. The underlying logic of each step is identical. The specific actions differ by organization type and timing.
Before you can close the year accurately, you need a complete picture of what is outstanding. Open items left unresolved at year-end become either misstatements in the financial statements or first-week-of-the-new-year problems that consume time and credibility.
Small Business Track
- Accounts receivable: collect what you can; write off or reserve what is genuinely uncollectable before year-end
- Accounts payable: pay or accrue all outstanding bills through year-end
- Fixed assets: update the asset register for any purchases or disposals during the year
- Open contracts or retainers: confirm revenue recognition is current and accurate
Nonprofit Track
- Accounts receivable: confirm all pledges and grant receivables are recorded accurately; assess collectability
- Grants: ensure all reimbursable expenses are documented and reimbursement requests submitted before June 30
- Accounts payable: pay or accrue all outstanding vendor and contractor bills
- Fixed assets: update the asset register for the fiscal year
Reconciliation is the discipline that separates a year-end close from a year-end guess. Every balance sheet account should be independently verifiable against an external source. Auditors test reconciliations first because unreconciled accounts signal broader control weaknesses.
- All bank and investment accounts reconciled through year-end, with statements obtained and matched to the general ledger
- Payroll reconciled to payroll reports, tax filings, and W-2 amounts
- Loan balances confirmed against lender statements; interest expense reconciled to amortization schedule
- Prepaid expenses and deferred revenue schedules updated through year-end
- For nonprofits: net asset balances reconciled, with donor restriction documentation current and complete
An unreconciled account at year-end is not simply a bookkeeping gap. It is a question mark on the accuracy of every financial statement that flows from it.
For calendar-year businesses, Step 3 runs from October through December. For fiscal-year businesses with a June 30 close, it runs now. The goal is the same: reduce current-year tax liability through legal, documented actions taken before year-end.
Accelerate Deductions
- Pay deductible expenses before year-end where cash flow allows
- Place qualifying equipment in service before year-end to capture Section 179 or bonus depreciation
- Maximize contributions to SEP-IRA or Solo 401(k) before deadline
Manage Income Timing
- For cash basis taxpayers: consider deferring December invoices to January if it reduces tax liability meaningfully
- Model both scenarios before deciding: deferral that triggers an underpayment penalty is not a net benefit
- Verify quarterly estimated tax payments are on track before year-end
For nonprofits, Step 4 runs on a parallel track to Steps 1 through 3. The financial close and the development calendar are inseparable at year-end: you need accurate donor records to send legally compliant acknowledgment letters, and you need current fiscal-year giving data to identify your highest-priority cultivation targets for the months ahead.
- Identify all donors who gave in the prior fiscal year but have not yet given this year. These are the highest-priority cultivation targets for summer and fall outreach.
- Send written acknowledgment letters for all gifts of $250 or more received during the fiscal year. These are required by IRS rules; donors cannot claim a deduction without them.
- Complete and submit all grant reports due at fiscal year-end. Late grant reports damage funder relationships and can affect future funding eligibility.
- Update donor records with year-to-date giving totals before closing the fiscal year in your CRM.
- Review your planned giving pipeline: which long-term donors have not yet had a legacy giving conversation? Summer is the right season to initiate it.
The final step of the year-end system is the first step of the new year. Organizations that build the new-year plan while the current-year data is fresh arrive at July 1 or January 1 with direction, not just relief.
Small Business Track
- Draft the new-year budget based on current-year actuals, not prior-year projections
- Review staffing and compensation plans; identify any roles needed in the first half of the new year
- Map capital or equipment investments planned for the coming year and their cash flow impact
- Set the first quarterly estimated tax payment deadline in the new year based on the revised tax projection
Nonprofit Track
- Present the new-year budget to the finance committee and full board for approval before July 1
- Confirm the audit engagement letter is signed and the audit timeline is set
- Identify grant deadlines in the first quarter of the new fiscal year and assign staff responsibility
- Plan the fall fundraising campaign calendar, including any match campaign lead gift conversations that need to begin now
The Two-Track Summary
| Step | Small Business (Dec 31) | Nonprofit (Jun 30) | Urgency for Jun 30 |
|---|---|---|---|
| 1. Open items | AR/AP, fixed assets, contracts | Grants, pledges, AP, fixed assets | Complete by June 27 |
| 2. Reconcile | Bank, payroll, loans, prepaids | Bank, investments, payroll, net assets | Complete by June 30 |
| 3. Tax planning | Deductions, income timing, retirement | Not applicable (tax-exempt) | Complete by June 28 for fiscal-year businesses |
| 4. Giving coordination | Not applicable | Acknowledgments, grant reports, donor records | Begin now; complete by July 15 |
| 5. New year planning | Budget, staffing, capital plan | Board budget approval, audit engagement, fall campaign | Board meeting by July 15 |
The Most Commonly Skipped Step
Step 5 is the one most organizations skip or compress. After the effort of the close, planning the new year feels like it can wait until the first week of July. It cannot. The decisions made in the final two weeks of a fiscal year, while current-year data is fresh and leadership attention is focused on financial performance, produce better new-year plans than the decisions made three weeks later when operational momentum has returned and the numbers are less immediate.
Virginia nonprofits subject to the Virginia Charitable Solicitation Law must file annual renewal reports with the VDACS. For June 30 fiscal-year organizations, the renewal is typically due within a set number of months of fiscal year-end. A clean, timely year-end close is a direct prerequisite for a timely renewal filing. Confirm your specific deadline with your accountant now, before the fiscal year closes.
Organizations that close their books monthly arrive at year-end with Steps 1 and 2 largely complete. For those that have not been closing monthly, our bookkeeping team can execute a catch-up close in time for June 30. Capacity in this window is limited. Contact us today to discuss what a catch-up engagement looks like.
Why the 90-Day Rule Exists
The 90-day start window is not arbitrary. It reflects how long the five steps actually take when run without urgency, and how long it takes to correct the problems they surface. An AR aging review at 90 days can surface collection problems while there is still time to collect. The same review at 10 days surfaces the same problems with no time to act.
For December 31 businesses reading this post in June, the 90-day window for your year-end opens in October. The right time to schedule your year-end planning meeting with your accountant is now, so the calendar is confirmed before fall gets busy.
Our CFO Advisory engagements include year-end close project management for both businesses and nonprofits: building the close checklist, tracking completion of each step, coordinating with auditors, and presenting the year-end results and new-year plan to the board. Talk to us about what fractional CFO support looks like for your organization.
Action Steps: Your Compressed Sprint for June 30
Pull your AR aging report, AP list, grant expenditure schedules, and asset register. Flag every item that requires action before June 30. Assign each one to a specific person with a specific deadline. An unassigned item is an item that will not get done.
Obtain June bank and investment statements as soon as they are available. Reconcile every account through June 30. Update the prepaid and deferred revenue schedules. Confirm payroll tax deposits match payroll records. Do not close the period until every reconciliation is complete.
Depreciation, prepaid amortization, accrued expenses, accrued revenue, deferred revenue adjustments, and any other adjusting journal entries must be posted before the period closes. Run a preliminary trial balance and review for any accounts with balances that do not make sense.
For nonprofits: send acknowledgment letters, submit grant reports, update donor records, and confirm the board meeting for budget approval and audit engagement review is scheduled. These do not all have to happen by June 30, but the window for each narrows quickly after July 1.
Do not let operational momentum displace this step. Schedule a half-day planning session in the first week of July. Use current-year actuals as the starting point for the new budget. Identify the three to five financial decisions that will most affect the new year, and make them deliberately.
Run the System. Start the New Year Strong.
EveryCentCounts provides bookkeeping, accounting, and CFO Advisory services that make year-end close a deliberate process rather than a reactive scramble. We work with Virginia small businesses and nonprofits year-round.
Book a Free ConsultationReferences
- AICPA. 2025. “Not-for-Profit Entities: Audit and Accounting Guide.” aicpa-cima.com.
- IRS. 2026. “Publication 526: Charitable Contributions.” irs.gov/publications/p526.
- IRS. 2026. “Publication 946: How to Depreciate Property.” irs.gov/publications/p946.
- FASB. 2016. “Accounting Standards Update 2016-14: Presentation of Financial Statements of Not-for-Profit Entities.” fasb.org.
- Virginia Department of Agriculture and Consumer Services. 2026. “Charitable Solicitation Registration.” vdacs.virginia.gov.
- SBA. 2026. “Manage Your Finances and Accounting.” sba.gov.
- National Council of Nonprofits. 2025. “Financial Management for Nonprofits.” councilofnonprofits.org.