As the Christmas holidays approach, many businesses slow down operations, staff take leave, and the bustle of year-end may seem distant. But that makes it the perfect time to close your books — ensuring your accounts are accurate, reconciled, and formally locked before the holidays hit. A proper closing puts you in control: no last-minute scrambles, fewer errors, and a clear financial foundation going into the new year.
This guide walks you through practical steps to close your accounts now — whether you’re a small business, freelance professional, or growing enterprise — so you head into the holidays with a clean slate.
1. Understand What “Closing the Books” Means
“Closing the books” refers to wrapping up all accounting for a given period (month, quarter or year), posting final entries, reconciling accounts, and locking the books so past transactions can’t be altered accidentally. Lendio+2Wolters Kluwer+2
Once closed, your revenue and expense accounts are zeroed out (or carried forward), and net profit/loss is transferred (for example, into a retained earnings or equity account), giving a clean starting point for the next period. FreshBooks+1
Closing books regularly (monthly or quarterly) — not just at year-end — reduces mistakes, improves clarity, and makes final year-end closing far easier. Zintego+2adaptcfo.com+2
2. Gather All Financial Records & Ensure Completeness
Before closing: collect and organize all financial records — bank statements, credit card statements, loan and liability statements, customer invoices, vendor bills, payroll reports, and any outstanding receipts or contracts. GrowthForce+2flowfi.com+2
Make sure all transactions — revenue, expenses, payments, outstanding invoices — have been entered in your accounting system. Missing entries lead to inaccurate reports and distort your true financial picture. flowfi.com+2DSB Rock Island+2
If using software, ensure data is up-to-date and categorized correctly. If using manual bookkeeping, double-check ledgers and journals for completeness.
3. Reconcile Accounts and Adjust for Accruals or Depreciation
Reconciliation means matching your internal records against external statements (bank accounts, cards, loans) to catch discrepancies, timing issues, or missing entries. Escalon+2flowfi.com+2
If your business uses accrual accounting, record any necessary adjusting entries before closure: accrued expenses or revenues, prepaid costs, depreciation, amortization, inventory adjustments — so financial reports reflect the true economic status. DSB Rock Island+2UNA TAX & ACCOUNTING SERVICES+2
This step helps prevent misstated profits, surprises during audit or tax filing, and gives a more accurate starting point for the next accounting period. LGA+2House of Companies | Hocebranch.ai+2
4. Set a Firm Closing Date & Lock the Books (Especially Before Holidays)
Decide on a closing date — for example, December 20 or December 24 — before holiday operations begin. This gives time to finish reconciliations, adjustments, and reviews, without the rush.
If you use accounting software (e.g. QuickBooks Online), use its “close books” or “lock period” function. This prevents accidental changes to past transactions once the period is closed. QuickBooks+1
Locking the books provides stability: no accidental edits, clean reports, and a clear cutoff between this year’s activity and next year’s — ideal for business planning, audits, or tax preparation after holidays. Lendio+2Zintego+2
5. Generate Final Reports and Backup Data
After closing, generate key financial statements: a Profit & Loss (income statement), Balance Sheet, and Cash Flow Statement. These will reflect your business’s financial position at the cutoff date. GrowthForce+2FreshBooks+2
Save or export these reports (PDF, Excel, printout) and archive them safely. Also back up raw data — ledgers, journals, receipts, reconciliations — digitally or physically. This ensures you have documentation for audits, tax filing, or comparisons in future periods. Sage+2flowfi.com+2
6. Review Tax Planning, Accruals and Holiday-Related Expenses Before Closing
Use the closing opportunity to handle any tax-relevant adjustments: accrued expenses, prepaid costs, depreciation, or year-end bonuses. Ensure tax-deductible expenses are properly recorded. DSB Rock Island+2UNA TAX & ACCOUNTING SERVICES+2
If your business is subject to payroll, vendor withholding, or other compliance obligations — make sure all relevant documents are completed before you lock the books. LGA+1
Taking care of this before the holidays means fewer surprises when you return — and a clean financial slate for the new year.
7. Communicate and Coordinate with Your Team Before Holidays
Closing the books often involves more than just accounting: operations, sales, HR, and management may need to finalize outstanding invoices, staff reimbursements, inventory counts, or expense claims.
Set clear internal deadlines (e.g. final day to submit expenses, invoices, or reimbursements) — ideally a few days before the closing date — so everything is captured.
If you have staff going on leave for the holiday, ensure responsibilities are clear or reassigned. This avoids delays or missing data when team members are unavailable.
Conclusion
Closing your books before the Christmas holiday isn’t just about bookkeeping — it’s about setting your business up for a smoother, more organized start to the new year. By gathering documents early, reconciling accounts, recording adjustments, locking your books, and backing up reports, you avoid end-of-year chaos, reduce errors, and ensure accurate financial insight.
This year-end ritual clears the path for fresh planning, budgeting, and growth — all while you enjoy holiday downtime with peace of mind.
References
- GrowthForce — Closing the Books: Key Steps in Year-End Accounting for SMEs GrowthForce
- FreshBooks — Closing Books: Basics & 8-Step Guide FreshBooks
- UNA Tax & Accounting Services — How to Close Your Books Properly Before Year-End UNA TAX & ACCOUNTING SERVICES+1
- Sage / Year-end Close Checklist — Why backups and audit preparation matter before closing your books Sage+1
