End of fiscal year checklist: How to close your books after June 30
Follow this end of fiscal year checklist to close your books after June 30, step by step.
Written by Kari Brummond—Content Writer, Accountant, IRS Enrolled Agent. Read Kari's full bio
Published Monday 21 September 2026
Table of contents
Key takeaways
- An end-of-fiscal-year checklist keeps your close on track by walking you through reconciling accounts, reviewing invoices, and running your key reports so the year is accurate and tax-ready.
- A simple 10-step close-the-books checklist gets the job done, even if you're not an accountant.
- Chasing unpaid invoices matters for your cash flow: US small businesses were paid an average of nine days late in the March 2026 quarter.
- Accounting software that automates reconciliation and reporting turns a stressful year-end bookkeeping checklist into a routine task.
What is a fiscal year-end close?
A fiscal year-end close is the process of finalizing your business's financial records for the year so they're accurate, complete, and ready for tax filing. It's the point where you confirm every transaction is recorded, every account is balanced, and your reports reflect the true state of your business. It usually happens the first few weeks after the end of your fiscal year.
A fiscal year is any 12 consecutive months you use for accounting and tax purposes. According to the IRS guidance on tax years, a 12-month fiscal year ends on the last day of any month except December. There are also 52-53 week fiscal years – they vary between 52 and 53 weeks, always end on the same day of the week, and don't line up with the last date of the month. A calendar year, by contrast, always runs January 1 to December 31.
For example, a business could use a fiscal year that runs from July 1 to June 30th every year. If that's you, your fiscal year-end close happens in July. The most common end dates for non-calendar fiscal years tend to be:
- June 30th: especially for educational institutions and nonprofits
- September 30th: used by the federal government and many large corporations
- March 31st: popular for businesses that want a year-end that aligns with the first quarter of calendar year businesses
- January 1st: common with retailers who want holiday sales and returns on the same year
The close itself is the same process, regardless of which end date you use. You confirm your records are complete, balance your accounts, and produce reports you can rely on for tax and planning. The steps below give you a clear order to follow so nothing slips through.
Typically, only corporations, trusts, and nonprofits can use a non-calendar fiscal year, but the IRS makes exceptions for some partnerships and S-corps.
Why closing your books matters
Closing your books soon after your fiscal year's end date gives you a clear, accurate picture of how your business performed over the year. That accuracy flows straight into smoother tax preparation and better decisions for the months ahead.
A clean close also protects your cash flow. When you review what customers still owe you as part of the close, you catch late payments early. That's worth doing. According to Xero Small Business Insights, US small businesses were paid on average nine days late in the March 2026 quarter, up from 8.4 days in the December 2025 quarter. Slow payment ties up cash you could put toward wages, stock, or growth, so a year-end review of who owes you is time well spent.
Finishing the close promptly also lets you start the new fiscal year with a clean slate. You carry forward accurate balances, set fresh budgets, and spend less time untangling old records later.
End of fiscal year checklist: 10 steps to close your books
You can close your books after June 30th, September 30th, or whichever end date you use by working through these 10 steps in order. Each one builds on the last, so your final reports come out accurate and tax-ready.
1. Gather your financial records
Start by pulling together everything you'll need in one place. Collect your bank statements, credit card statements, invoices, receipts, payroll records, and loan documents for the full fiscal year.
Having these ready before you begin saves you from stopping mid-close to hunt down a missing document. It also makes the rest of this year-end closing checklist move much faster.
2. Reconcile your bank and credit card accounts
Reconciling means matching every transaction in your books against your bank and credit card statements. Go line by line and confirm each deposit, payment, and fee appears in both places.
If you find a transaction in your bank statement that isn't in your books, add it. If something's recorded twice, remove the duplicate. Reconciled accounts are the foundation of an accurate close, so don't skip this one.
3. Assess accounts receivable and chase unpaid invoices
Accounts receivable is the money your customers still owe you. Review your open invoices, confirm which ones are paid, and decide what to do with the unpaid ones – whether that's updating your allowance for doubtful accounts or writing off bad debts.. Make sure customer payments and deposits have been credited correctly and make adjustments as needed.
You may also want to chase late payments to bolster your cash flow going into the new year, but handle the accounting carefully. The cash is revenue for the current year if you use cash accounting, but if you're on an accrual basis, it was counted during the fiscal year you're closing out now.
4. Review accounts payable
Accounts payable is what you owe to suppliers and vendors. Go through your unpaid bills, confirm each one is recorded, and note which expenses fall into this fiscal year even if you'll pay them next month, under the accrual method.
Recording these correctly keeps your expenses in the right period. That gives you an honest view of what the year actually cost you to run.
5. Record adjusting entries
Adjusting entries capture amounts that don't show up in your day-to-day transactions. Think depreciation, prepaid expenses, accrued wages, and any income you've earned but haven't yet been paid for.
These entries make sure your books reflect the full picture, not just the cash that moved. If you're unsure which adjustments apply to your business, a quick chat with your accountant can clear it up.
6. Review inventory and fixed assets
If you hold stock, count your inventory and compare it against what your books say you have. Adjust for anything damaged, sold, or written off so your closing figure is accurate.
Then review your fixed assets, such as equipment, vehicles, and furniture. Confirm each item is still in use, record any you've sold or disposed of, and apply depreciation for the year.
Keeping your asset list current matters beyond the close. It feeds your tax figures, tells you what's due for replacement, and keeps your balance sheet honest about what the business really owns.
7. Run your key financial reports
With your accounts reconciled and adjusted, you can run the reports that summarize your year. Three reports do most of the work for a fiscal year-end close.
Run your profit and loss statement to see income against expenses, your balance sheet to see what you own and owe, and your cash flow statement to see how money moved through the business. Together they show you exactly where you finished the year.
8. Confirm payroll and prepare tax forms
Check that all payroll for the fiscal year is recorded, including wages, bonuses, tax withholdings, and employer taxes. Confirm the totals match what you've reported to the IRS. Even though you're in a fiscal year, you'll still use the calendar year for W-2s, 1099s, and payroll tax forms, so make sure your numbers are spot on, but don't worry about these forms yet.
9. Back up your records
Once your books are closed, save a secure copy of everything. Back up your reports, reconciled statements, and supporting documents so you can find them if you're ever asked to.
The IRS recordkeeping guidance recommends keeping most business records for at least three years and employment tax records for at least four years. Cloud storage makes this simple, since your records stay safe and searchable without a filing cabinet.
10. Review the year and plan for the next one
With the numbers finalized, step back and look at how the year went. Compare your results against last year, spot the trends, and note what drove your profit or squeezed your margins.
Use what you learn to set a budget and goals for the new fiscal year. This last step turns your close-the-books checklist from an admin task into a planning tool you'll actually use.
A short review now saves guesswork later. When you know which months were strongest and where costs crept up, you can plan staffing, stock, and spending for the year ahead with real numbers behind you.
Common year-end closing mistakes to avoid
A few slip-ups tend to turn an otherwise smooth close into a stressful one. Watch out for these common mistakes as you work through your close.
- Leaving reconciliation to the last minute: Rushing months of transactions in one sitting leads to errors and missed items.
- Forgetting adjusting entries: Skipping depreciation or accrued expenses leaves your reports inaccurate and your tax figures off.
- Mixing personal and business spending: Blended transactions muddy your books and make the close far harder to complete.
- Ignoring unpaid invoices: Overlooking what customers owe you and keeping bad debts on the books hides cash flow problems and overstates your asset position.
- Skipping your backups: Closing without saving secure copies puts your records at risk right when you need them most.
How accounting software makes closing the books easier
Accounting software takes the manual grind out of a year-end close and helps you finish faster with fewer errors. Instead of matching transactions by hand, the software does the heavy lifting and shows you the numbers in real time.
Automated bank reconciliation matches your transactions against your bank feed as the numbers come in, so accounts stay current all year rather than piling up at the end of the year. That alone removes one of the most time-consuming parts of closing your books.
Real-time accounting reports let you run your profit and loss, balance sheet, and cash flow statement in a few clicks. With less manual admin and cleaner data, you close the year with confidence and get back to running your business.
Simplify your fiscal year-end close with Xero
Xero brings your bank feeds, invoices, and reports together in one place, which can help make closing your books after your year-end date a more routine task. Reconciliation can run automatically, your key reports are ready when you are, and your data stays backed up in secure cloud storage.
You can try it and get 90% off for six months to see how much simpler your next fiscal year-end close can be.
FAQs on closing your fiscal year
Here are quick answers to the questions small business owners ask most when they're closing out the fiscal year.
What are the steps to complete a fiscal year-end closing checklist?
Gather your records, reconcile your accounts, review receivables and payables, record adjusting entries, check inventory and assets, run your reports, confirm payroll, back up your data, and review the year. Working through them in order keeps the close accurate.
How do you prepare for the end of your fiscal year?
Keep your records organized and your accounts reconciled throughout the year so there's less to catch up on at year-end close. Collecting statements, invoices, and payroll records ahead of time makes the process much faster.
What should your fiscal year end be?
Your fiscal year can end on the last day of any month except December, and many businesses pick a month that follows their slow season. Choose the one that best matches how your business earns and spends across the year.
How long does it take to close the books?
A simple close can take a day or two if your accounts are reconciled throughout the year, while a more complex business may need a week or more. Staying on top of reconciliation is the single biggest factor in how quickly you finish.