It's October. Tax season is still a few months away, and you're probably thinking you have plenty of time to worry about it later.
And technically, you do.
But here's something worth thinking about. Would you feel comfortable handing your bookkeeping records to your tax accountant today?
If your answer is "Absolutely!" that's wonderful. You're already ahead of the game.
But if you're thinking, "Well, I have a few months of transactions to catch up on," or "I'm not entirely sure my QuickBooks numbers are correct," you're definitely not the only business owner in that situation.
When you're running a business, bookkeeping can easily slip down the priority list. There are customers to take care of, employees to manage, invoices to send, and a hundred other things competing for your attention.
The problem is that those little bookkeeping tasks don't disappear. They quietly pile up.
And January has a funny way of arriving much faster than we expect.
So, before tax season gets here, let's walk through a few things worth checking in your books. Nothing overly complicated, just practical advice to help you avoid unpleasant surprises when it's time to send everything to your accountant.
First, Let's Talk About What "Tax Ready Books" Actually Means
One misconception we often come across is that if all your transactions are in QuickBooks, your bookkeeping must be complete.
Unfortunately, that's not quite how it works.
QuickBooks is a great tool, but it doesn't automatically know the story behind every transaction.
For example, suppose you transferred $10,000 from your business savings account into your business checking account.
If that transfer was accidentally categorized as sales income, your Profit & Loss report could show $10,000 more revenue than your business actually earned.
Or perhaps you've been making monthly payments on a business loan, and every payment has been categorized as an expense.
Your books might look fine at first glance, but your loan balance and expenses could both be incorrect.
That's why preparing your books for tax season is about more than making sure every transaction has a category.
It's about making sure your financial records accurately reflect what happened in your business.
And that's what we're going to focus on.
1. Start With Your Bank and Credit Card Accounts
If we were sitting together looking at your books, this is probably where we'd start.
Pull up a list of every bank account and credit card you've used for your business during 2026.
Not just your main checking account. Think about savings accounts, business credit cards, loans, and payment processors like PayPal or Stripe.
Now ask yourself: Is all that activity actually reflected in your bookkeeping?
It's surprisingly easy to forget about an account you rarely use.
Maybe you opened a business credit card in March, used it for a few purchases, and never connected it to QuickBooks. Or perhaps you paid several business expenses from your personal account.
Those transactions still need to be reviewed and recorded appropriately.
A little advice: Don't assume that because your bank is connected to QuickBooks, everything is automatically recorded correctly.
Bank feeds are helpful, but transactions can still be missing, duplicated, incorrectly matched, or sitting in the review queue.
Start by making sure nothing has been overlooked.
2. Reconcile Your Accounts, Even If You Don't Enjoy Doing It
Reconciliations probably aren't anyone's favorite part of running a business.
But they're one of the most important.
Think of reconciliation as checking your bookkeeping against reality.
Your bank statement tells you what actually happened in your bank account. Your bookkeeping tells you what you've recorded.
Those two should agree after accounting for legitimate outstanding transactions.
Let's say your bank statement shows $15,200 at the end of September, but your QuickBooks records don't match.
Maybe a transaction was entered twice. Maybe a deposit is missing. Or maybe a transfer was recorded incorrectly.
Reconciliation helps you find those differences.
Here's where business owners sometimes get into trouble. They see a difference and create an adjustment just to make the reconciliation work.
Please don't do that without understanding what's causing the difference.
An unexplained adjustment might make the screen look better today while creating a bigger problem later.
Our recommendation: Reconcile every bank and credit card account monthly. If you're several months behind, work through the months in order instead of jumping straight to December.
It takes some patience, but it's worth it.
3. Take a Look at Those Uncategorized Transactions
You know those transactions sitting in QuickBooks waiting for someone to review them?
Yes, those.
It's tempting to ignore them, especially when there are dozens or even hundreds.
But they can affect your financial reports.
Imagine seeing a $3,000 withdrawal from your business checking account.
Was it a payment to a vendor? A transfer? A loan payment? Money you withdrew for personal use?
Those are very different transactions, even though they all involve $3,000 leaving your bank account.
Categorizing them incorrectly can affect your income, expenses, assets, liabilities, or equity.
And if you have 200 or 300 transactions waiting for review, guessing your way through them isn't a good solution.
We've written more about this in our article 437 Uncategorized Transactions? Here's Where to Start.
A little advice: If you're unsure what a transaction represents, investigate it before categorizing it. Sometimes checking an invoice, receipt, or bank description is all it takes.
4. Make Sure Personal Expenses Haven't Sneaked Into Your Business Books
This happens more often than you might think.
You're buying office supplies, grabbing a few things for home, and accidentally using your business credit card for everything.
Or maybe you paid a business expense with your personal card because it was the one you had available.
Neither situation is unusual, especially for small business owners.
But your bookkeeping needs to distinguish between personal and business activity.
For example, if you're a sole proprietor and use your business checking account to pay a personal expense, that payment may need to be recorded as an owner draw rather than a business expense.
For corporations and partnerships, the accounting can be different.
The important thing is to identify these transactions rather than treating every payment as a deductible business expense.
Our recommendation: Review unusual expenses and any accounts where personal transactions may have been mixed with business activity.
Your tax professional can help determine the appropriate tax treatment.
5. Don't Forget About Business Loans
Here's a mistake that's easy to make.
You have a business loan, and every month $1,200 comes out of your checking account.
It feels like an expense, right?
But let's say $950 of that payment goes toward reducing the loan balance and $250 represents interest.
The full $1,200 generally shouldn't be recorded as an interest expense.
The principal portion reduces what your business owes, while the interest is recorded separately.
If you've been categorizing the entire payment as an expense all year, your Profit & Loss and Balance Sheet may both need attention.
A little advice: Keep your loan statements handy and review how payments have been recorded. If the balances don't make sense, it's better to investigate them before year end.
6. Review Who Owes You Money and Whom You Still Owe
If your business sends customer invoices, take a few minutes to look at your Accounts Receivable report.
Do you recognize the outstanding balances?
Perhaps a customer paid an invoice in July, but QuickBooks still shows it as unpaid because the payment wasn't applied correctly.
Or maybe an old invoice was entered twice.
The same goes for Accounts Payable.
Check for unpaid vendor bills, duplicate bills, and credits that haven't been applied.
These issues can be easy to overlook when you're busy.
But they're worth addressing because they affect the accuracy of your records.
Our recommendation: Don't simply delete old balances because they look wrong. Find out why they're there and correct them appropriately.
And remember, the tax treatment of unpaid invoices and bills depends partly on whether your business uses cash or accrual accounting.
7. Review Payroll and Contractor Payments
If you have employees, this is another area that deserves attention before year end.
Your bookkeeping should reflect payroll expenses, employer payroll taxes, benefits, and related liabilities correctly.
Compare your bookkeeping with the reports from your payroll provider.
If something doesn't match, investigate it.
And if you pay independent contractors, make sure their payment records are organized and that you've collected the information needed for any applicable reporting.
Depending on the circumstances, certain payments may require Form 1099 NEC or other information reporting.
Your tax professional or payroll provider should confirm which requirements apply.
A little advice: Don't wait until January to start looking for missing contractor information. It's much easier to request it while you're still regularly working with the vendor.
8. Think About Any Large Purchases You Made This Year
Did you buy a new computer? Equipment? Furniture? A business vehicle?
These purchases deserve a closer look.
Let's say you bought $6,000 worth of equipment and categorized the entire amount as office supplies.
Depending on the purchase and your accounting policies, it may need to be recorded as a fixed asset.
Your tax accountant will determine the appropriate tax treatment, including any available depreciation or expensing elections.
From a bookkeeping perspective, the important thing is to identify the purchase and keep the supporting information organized.
Our recommendation: Make a list of significant equipment and asset purchases during 2026. Include the purchase date, amount, description, and available receipts or invoices.
Your accountant will appreciate having that information ready.
9. Now Look at Your Financial Reports
Once you've reviewed your transactions and reconciled your accounts, it's time to look at the bigger picture.
Start with your Profit & Loss statement.
Does the revenue look reasonable?
Are there expenses that seem unusually high or low?
Did you have a particularly profitable month, or does one month look strange compared with the others?
Then review your Balance Sheet.
Do the bank balances make sense? What about your credit cards and loans?
One thing we always encourage business owners to remember is that a nicely formatted financial report doesn't necessarily mean the numbers are correct.
QuickBooks can generate a Profit & Loss statement in seconds. But it can only report what's been recorded.
If the transactions behind the report are incorrect, the report will be incorrect too.
A little advice: Don't just print your financial statements and send them off. Spend some time looking at the numbers and asking whether they reflect what you know about your business.
You know your business better than anyone. If something looks unusual, it's worth asking why.
10. Get Your Documents Organized for Your Tax Accountant
Once your books are in good shape, the final step is gathering the records your tax professional needs.
Depending on your business, that might include:
- A full year Profit & Loss statement.
- A December 31 Balance Sheet.
- General Ledger or detailed transaction reports.
- Bank and credit card statements.
- Loan and interest statements.
- Payroll reports.
- Contractor payment records.
- Fixed asset purchase information.
- Inventory records, if applicable.
- Other supporting documents your accountant requests.
Not every business needs the same information, so ask your tax professional what they prefer.
And whenever you're sharing financial documents, use a secure method rather than sending sensitive information through an unprotected channel.
What If You're Already Months Behind?
Now, maybe you've read through this checklist and realized that your books need more attention than you expected.
Perhaps you haven't reconciled anything since February.
Maybe you have hundreds of uncategorized transactions.
Or maybe you've been meaning to set up QuickBooks properly for months but just haven't found the time.
Here's what we'd tell you if you were sitting across from us:
Don't try to fix an entire year's worth of bookkeeping in one weekend.
Start by figuring out what's missing.
Gather your statements. Identify the accounts that need attention. Make a list of what hasn't been reconciled or recorded.
Then work through it systematically.
And if the backlog is too large or you're unsure how to correct the problems, consider getting professional help.
At CityScape, our Cleanup & Catch Up services are designed for exactly these situations.
We review your existing books, identify what needs to be corrected, and help bring your financial records up to date.
The goal isn't just to make your books look clean for tax season. It's to make sure the numbers are reliable.
One More Thing: Don't Wait Until Next Tax Season to Think About Your Books
There's something we'd really encourage you to consider.
If preparing for taxes always turns into a stressful project, maybe the problem isn't tax season itself.
Maybe it's that bookkeeping keeps getting pushed aside throughout the year.
And that's understandable. You're running a business, not spending your days thinking about account reconciliations.
But imagine how different next January could feel if your transactions were reviewed every month, your accounts were reconciled, and your financial reports were already current.
Instead of wondering whether your books are ready, you'd know.
That's the real value of consistent bookkeeping.
It isn't only about taxes. It's about understanding where your business stands throughout the year.
Frequently Asked Questions
What if my books aren't ready when my accountant needs them?
Contact your tax professional as early as possible. They can advise you about filing deadlines and whether an extension may be appropriate. In the meantime, identify the missing bookkeeping work and begin addressing it.
Can QuickBooks get my books ready automatically?
QuickBooks Online is a helpful tool, but it doesn't replace reviewing transactions, reconciling accounts, and checking your financial reports. The software still needs accurate information.
Should I hire a bookkeeper or a tax accountant?
They do different jobs. A bookkeeper helps maintain accurate financial records, while a tax professional handles tax advice, return preparation, and filing. Many small businesses benefit from both.
When should I start preparing my 2026 books?
October is a good time to review what you've recorded so far and catch up on earlier months. You can complete the final year end reconciliations once December activity and statements are available.
Let's Get Your Books Ready
If you've been putting off your bookkeeping, there's no need to keep putting it off until January.
Whether you need help catching up on several months of transactions, correcting QuickBooks issues, or keeping your records organized throughout the year, we're here to help.
At CityScape Bookkeeping, we work with small business owners in Minnesota and across the United States to make bookkeeping one less thing they have to worry about.
We focus on accurate records, clear financial reports, and practical support that fits the way you run your business.
Explore our Cleanup & Catch Up services and see how we can help you get organized.
Because running a business already comes with enough responsibilities. Your bookkeeping shouldn't have to be another source of uncertainty.
CityScape Bookkeeping provides bookkeeping services, not tax preparation or tax advice. Please consult your tax professional about tax treatment, filing requirements, and deadlines applicable to your business.