Double-check your records before sharing them with your accountant for year-end prep.
For owner-operators heading into tax season, it’s time to start reviewing the past year’s finances, finalizing your records, and preparing to file with your accountant. But first, you’ll want to make sure your books are complete and well set up for a smooth year’s end.
Here are six steps to help you get the books ready for your accountant. We’ll walk through useful settings to enable in your bookkeeping system, balance sheet items to check on, categories to clean up, and more. By the end of it, you’ll be in solid shape for a check-in with your CPA.
Task List Summary
Reconnect accounts (10 mins). Check that transactions have been syncing to your ledger.
Categorize income and expenses (1+ hour). Finish tagging your transactions.
Check balance sheet transactions (30 mins). Make sure loans, asset purchases, and owner contributions or draws are accurately recorded on the balance sheet.
Reconcile accounts (1+ hour). Look for mismatches between your account balances and statements.
Set up category mapping for taxes (10 mins). Enable settings that help you generate reports for 1099s and Schedule F, C, or E.
Share the books with your accountant (10 mins). Give your CPA access to the books or export reports they’ll need.
Step 1: Reconnect Accounts
Your tax filing relies on accurate and complete financial records, so the first step is making sure all of your accounts (and by extension, your transactions) are captured in your books.
If you’re using a bookkeeping tool like Ambrook, that means checking that your bank accounts and credit cards are connected to the platform. They also need to be actively syncing transactions into the ledger.
It takes just a few minutes to check on bank connections and syncs, and reconnect accounts if needed. Here’s how you would do it in Ambrook:
Go to Settings, then find Connections.
Look through the accounts you have connected. Are any of your business bank accounts or credit cards missing?
If you’re missing an account, click New at the top and find your bank to connect it.
Look through your connected accounts again, this time checking their last sync dates. Are they recent?
If an account’s last sync date is old and you’ve made transactions since then that you don’t see in your ledger, follow our support team’s guide on reconnecting the account.
No matter what bookkeeping system you use, take a moment to check that:
You have records from all of your accounts: bank accounts, credit cards, loan accounts, lines of credit.
You have records of transactions from the full year, up until now (or through December 31, if you’re doing this after year’s end).
Once you’ve confirmed that none of your accounts are missing, let’s move on to categorizing the transactions.
Step 2: Categorize Income and Expenses
Categorizing your transactions helps your accountant understand what kinds of income and expenses you had, so they can help you file correctly.
Many owner-operators tag transactions throughout the year, but it can be easy to miss some here and there, even when you go through your ledger regularly. This is a good time to catch-up, before things get busier in the thick of tax season.
Open your ledger and scan for transactions you haven’t yet assigned to a category. In Ambrook, the software can help you find them automatically:
In Ledger, find the button at the top called Review.
When you click Review, you’ll get a list and a tally of all your uncategorized transactions.
Work through the list, adding category tags for each one.
When you’re done, you’ll see a message letting you know you have no more transactions to review.
Click the same Review button again to return to the general ledger.
If there are too many transactions to categorize in one go, try breaking them into manageable sections; maybe you tackle a few each day from your phone, or catch up on a group of transactions every week. Your bookkeeping system might also have features that can help you tag a large number of transactions faster:
Bulk tagging: In Ambrook, you can apply the same category to multiple transactions in one go.
Automations: If you have recurring transactions that should always get tagged to the same category, set up an automation for the system to do it for you.
AI suggestions: Ambrook learns from your tagging behavior to suggest categories for some of your transactions. Instead of tagging manually, you review and accept the suggestions.
After you’ve tagged a batch of transactions, you can always return to Review in Ambrook to finish what’s left. Remember to write down any questions about how to categorize a particular transaction for your accountant.
Reminder: Tag any personal transactions you see in the ledger to a “Personal Income” or “Personal Expenses” category, so they’re separated from business transactions.
Step 3: Check Balance Sheet Transactions
Your ledger transactions are now categorized. But you’ll want to double-check that balance sheet transactions haven’t been tagged as standard income and expenses.
Balance sheet transactions can include:
Loan payments and draws
Asset purchases (e.g., equipment, land, buildings)
Asset sales
Owner’s contributions
These are treated differently than transactions like fuel, seed, or materials. In a tool like Ambrook, you’ll record them as liability, asset, or equity adjustments. Here’s how that works:
From Accounts, click into a relevant account (equipment you have under Assets, for example, or an equity account).
In the window that pops up, find the button called View Transactions. This brings you to a filtered view of your ledger.
Go through the transaction(s) in this view. Do you see any balance sheet transactions tagged to income or expense categories?
Follow our support team’s guides to tag them as liability, asset, or equity adjustments instead.
As you’re going through your balance sheet transactions, reach out to your accountant or financial advisor with questions about your specific situation.
Step 4: Reconcile Accounts
With your accounts syncing and transactions properly categorized, let’s make sure your books match what’s in your statements. Reconciliation is another chance to check that your records for the year are complete and correct before bringing them to your accountant.
For all of your bank accounts, credit cards, and loan accounts, you’ll compare the monthly statements you’ve gotten from the bank against your ledger. And when there are differences between the two, you’ll make adjustments to your books.
If you’re using Ambrook, the system can help you with reconciliations. Here are the steps:
Start by downloading the monthly statements from your bank for this year.
Back in Ambrook, check that your starting balances and dates are right. Go to Accounts, select the one you want to check, and scroll down to Details.
Go to Ledger now and find the Reconcile button at the top. Click it, and you’ll see a list of accounts to reconcile.
For each account, click its Reconcile button. Enter the bank statement period and ending balance; you can optionally upload the statement itself.
Click Continue and you’ll be brought to the reconciliation screen for that account and the statement period you entered. Notice the numbers at the top. Is Difference equal to $0?
If there’s a non-zero difference, follow our support team’s reconciliation guide on making adjustments to your transactions and resolving the differences.
Set aside some time to make sure all of your accounts are reconciled for the whole year. You could go through one account each week for the next few weeks, or break up the reconciliations in another more manageable way.
When you’re done, you’ve confirmed that your records align with your banks, credit cards, or lending institutions. This ensures that your books are accurate and current, which could potentially minimize your tax liability and help save you on accountant fees.
Now, we’ll check on income and expense tracking for taxes.
Step 5: Set Up Category Mapping for Taxes
There may be settings in your bookkeeping system that can make it easier to track relevant income and expenses for certain tax forms you need to file. For example, certain Ambrook categories map directly to boxes on Schedule F, Schedule C, Schedule E, or 1099s.
In a few minutes, here’s how to check that your categories are appropriately mapped to tax boxes in Ambrook:
Go to Settings and find Categories.
On the right side of the screen, you’ll see which Schedule F, C, E, or 1099 boxes a category is mapped (if any). Scan all your categories and check whether they’re mapped to the boxes you’d expect.
If you need to edit a category that’s unmapped, click the pencil icon on the right side of its line.
Scroll to Classifications, where you’ll see options to select the exact box(es) from Schedule F, C, E, of 1099 that you’d like to map to.
Click Save at the top.
To track expenses for 1099s, note that you’ll also have to enable 1099 tracking for each contact that you plan to issue the form to. Learn more about how this works in our support team’s guide.
Reminder: Talk to your accountant early on about the forms you’ll have to file and how you should be mapping categories to tax boxes.
From here, you’ll be able to directly export Schedule F, C, and E breakdowns and a 1099 payments report. Ambrook does not file the forms for you, but the exports can help you and your accountant prepare: Go to Settings and find Export, then scroll to the Tax Prep section to download what you need.
Step 6: Share the Books with Your Accountant
Your books are complete and you have tax prep reports in hand. Now, you can share the work with your CPA, review it together, and start preparing your taxes.
Gather the items your accountant needs to get a good sense of your records and financial standing. That could include exports of your:
General ledger
Profit and loss statement
Balance sheet
Trial balance
1099 payments
Schedule F, Schedule C, or Schedule E breakdowns
In Ambrook, you can find all of these reports in the Export page. But you can also invite your accountant directly to your organization, so they can dig into the books and statements without having to go back and forth with attachments:
In Settings, find Team.
Click Add Members to invite your accountant.
Under Role, it will say Staff by default. Click on that field to see other role options and select Accountant.
Your accountant will get access to view your ledger, reports, and other data, but won’t be able to edit your categories. Learn more about the access they get to your organization.
Lastly, put together a list of the questions you had as you went through the steps to clean up your records. Schedule a check-in with your CPA to talk about them, walk through your books, and see what’s left to get ready for tax season.
Looking for an accountant to help with taxes this year?
Resources to Dive Deeper
To go a step beyond bookkeeping tasks, view our checklist on the year-end accounting close for producers.
For owner-operators in agriculture, get an idea of the questions to ask your CPA at the end of the year.
Read how George Mitchell, an Oklahoma rancher, planned for a complicated tax season with the tax team’s support.
FAQs
What should I do before handing my books to my accountant?
Make sure your accounts are connected and up to date: your transactions have all been recorded in the ledger, they’re categorized, and every account is reconciled. Check that balance sheet transactions (loan payments, asset purchases or sales, and owner’s contributions or draws) are properly recorded as liability, asset, or equity adjustments instead of typical income or expenses.
How long does year-end bookkeeping take?
Every operator’s situation and every task is different. Some take just a few minutes, like reconnecting your bank accounts to your bookkeeping tool or mapping categories to tax forms. If you’ve regularly categorized transactions throughout the year, it may only take a few hours to finish tagging transactions. If you have larger gaps in categorizations or reconciliations, plan extra time at the end of the year to work on them and try spreading the work over several weeks.
How should loan payments or asset purchases get recorded in my books?
Balance sheet transactions like loan payments, asset purchases or sales, and owner’s contributions or draws aren’t standard income or expenses. Instead in Ambrook, categorize them as liability, asset, or equity adjustments.
This resource is provided for general informational purposes only. It does not constitute professional tax, legal, financial or accounting advice. Consult a qualified professional about your specific situation.
