Welcome to Q4 2021! Somehow the year seems almost over already. This year, like last year, we experienced much turmoil, many challenges and more changes in business than we care to count. And with the year-end quickly approaching, you should choose a time in your calendar to review your company’s operations and develop your year-end financial plan for 2022.

Rayanne Buchianico

Author – Rayanne Buchianico

This is a great opportunity to prepare your company for the year-end process. Taking some simple steps now can help you avoid a lot of work later. To get you started, here are a few tips.

Financial Documents

Before commencing any planning efforts, you need to start with accurate information. Take some time to update your key financial documents and review them to analyze your company’s earnings for the year. Begin by reconciling all bank and credit card accounts.

Once these accounts have been reconciled, review the balance sheet for any inaccurate accounts such as loan balances, prepaid accounts, deferred revenue, etc. You should look at your accounts receivable and accounts payable regularly; but if you haven’t yet done so, now is a good time to start. Contact any customers with old balances to see if you can collect them before the year closes. And your accounts payable list should only show amounts that you actually owe.

Next, review your fixed asset list or depreciation schedule from last year’s tax return. Check each asset. Is it still being used in your company? Has it been replaced or taken out of service? Many states and jurisdictions in the U.S. have a Tangible Property Tax on business assets. It’s essential to update your fixed asset list each year to avoid paying unnecessary tangible taxes on obsolete assets.

Review your Income Statement (P&L) for appropriate margins at your various service levels. Are you reaching your desired margins? Have all customer costs been invoiced to your customers? Have there been any significant changes in your operating expenses or product margins that will affect next year’s budget?

Review your Statement of Cash Flows. Be sure you understand where your cash is coming from, but even more importantly, where it is going.

Compliance Documents

One area that is often overlooked until the very last minute involves year-end compliance documents – including W-2 forms for employees, and 1099-NEC forms for subcontractors. Take a few steps now to be ready for your year-end compliance filings.


For both current and former employees, be sure you have updated address information. Many payroll services mail W-2s directly to employees’ homes. You want to be sure their addresses are current in this system.

Certain items are required to be reported on employees’ W-2 forms which are not included on their paychecks. If you require assistance identifying these, be sure to contact your payroll service or accounting professional. Here is a short list of examples:

Year-End Bonuses

  • Year-end and holiday bonuses are considered wages. Be sure to report any bonuses to your payroll department or service to include on your employees’ W-2s.

Personal use of company car

  • If an employee, even an officer, drives a company car, they should report their personal use miles each year. This personal portion of the company car translates into taxable wages.

S-Corp Health Insurance

  • A person owning more than 2% of stock in an S-corporation should have the company pay their health insurance in full.
  • Those premiums convert to taxable wages as shown in Box 1 of their W-2. These premiums should not be treated as pre-tax deductions as with other employees.

Employer-portion of health insurance

  • Code DD in Box 12 of the W-2 is used to report the employer’s portion of paid health insurance premiums for employees.

Life Insurance

  • Company life insurance policies with a death benefit in excess of $50,000 should report any premiums paid in Box 12, Code C on the W-2.


  • For any vendor to whom you paid money for business services, you should obtain and keep certain information, such as:

Tax identification number

Workers’ compensation

  • Update the workers comp exemption or insurance certificate each year to avoid being charged for their work by your own workers comp insurance policy.

Sales tax

  • Provide your vendors with an updated resale certificate or exemption. These forms must be updated each year.


It is a good practice to maintain this information for every vendor – regardless of the need to send them a Form 1099-NEC. Determining who will receive a Form 1099 occurs in January, and often, it is too late to obtain this data. My rule of thumb is to collect vendors’ information prior to releasing a payment to them.


There is no question that the global economy is fighting post-pandemic inflation on all goods and services. Take a few minutes to review your customer contracts and ensure they are still as profitable as you need to sustain your business. January 1 is a fine time to increase your rates if built-in rate increases are not included in your Master Service Agreement. As your costs of running your business increase, so should your customers’. You have time to prepare your customers for a January 1 price increase if you do it now.

Other customer items you should review and update each year include:

  • Sales tax exemptions and resale certificates
  • Company contacts, emails, phone numbers
  • Installed assets
  • Product licenses
  • Subscription renewals

Internal/Operational Items

The last set of tasks to add to your year-end checklist include internal documents that need to be updated regularly.

  • Obtain your new sales tax resale certificate
  • Update your state and local business licenses
  • Pay membership dues for industry organizations
  • Review your insurance policies for adequate coverage
  • Review employee benefit plans
  • Provide updated information for retirement plans to employees
  • Check employees for benefit eligibility


Taking a few steps now will save you considerable time and frustration later. So be sure to keep this list as an annual reminder to maintain your documentation and ensure a smooth year-end process.

Have a fabulous holiday season and a prosperous and healthy New Year!

Rayanne Buchianico provides MSP accounting and PSA Consulting services to IT Professionals and is the owner of ABC Solutions, LLC. Rayanne is a member of the ModernMSP community and a frequent contributor to the ModernMSP blog in addition to her own podcast, PSA Impact.