Fall is here, and it’s a great time for small business owners to pause and plan for a strong finish to the year. Before jumping into the fourth quarter (Q4), don’t overlook one of the most important checkpoints of the year: the end of the third quarter (Q3).
Now is the perfect chance to review your financials, spot opportunities to reduce year-end tax stress, and make sure your financial team is aligned with your goals. A little attention now can make the rest of the year run much smoother!
Review Your Financials
A Q3 check-in shows where you stand year-to-date and highlights areas needing attention before December.
If you manage your own books, this is the time to review details closely. But if you work with a bookkeeper, think of this more as a high-level review — making sure you understand the big picture and asking questions where things don’t look right.
Key areas to pay attention to include:
Profit & Loss (P&L)
Take a close look at your income and expenses to make sure everything is recorded correctly. Check for missing receipts, unrecorded payments, or any unusual transactions, and flag anything that might need a closer look before year-end.
Balance Sheet
Review your assets, liabilities, and equity to confirm they look accurate overall.
- Accounts receivable and payable: Check that invoices sent have been paid and bills you owe are accounted for.
- Liabilities and debts: Review loans, credit lines, or other obligations to ensure balances are correct and payments are up to date. Here’s a quick video walkthrough we made for Correcting Loan Balances in QuickBooks.
- Retained earnings and equity: Make sure prior-year distributions and owner draws were properly closed to retained earnings as of January 1 of the current year. Also review current-year distributions or draws to confirm they match what was actually withdrawn for personal use.
Estimated Taxes
Make sure your quarterly payments are on track. Have you made your 1st, 2nd, and 3rd quarter payments to federal and state? If your income this year is similar to last year, your estimates should align with your taxable income.
Cash Flow
Check that you have enough cash to cover upcoming expenses and seasonal fluctuations.
Potential Deductions
Don’t forget to track things like mileage, home office expenses, and business subscriptions so you can claim all eligible deductions on your tax return.
Taking a look at your financials now gives you clarity on your business’s current state. You can catch issues early and prepare questions for your CPA. Since CPAs get busier as tax season approaches, reviewing things now helps avoid delays and makes year-end planning much smoother.
Smart Tax Planning Moves Before Year-End
Q3 is also the perfect time to think strategically. Once you review your financials and touch base with your CPA, you can make a few smart moves before the year closes.
Accelerate expenses or defer income: Paying for certain expenses now or delaying income until next year can help balance taxable income. Your CPA can advise on the best approach.
Invest in equipment or software: Consider purchases that qualify for deductions like Section 179. Big-ticket items can often be deducted in the year you place them in service, which can lower your tax bill.
Review payroll (especially for S-Corps): Check that business owner compensation is reasonable and compliant. Also confirm that S-corp owners’ health insurance is added to their W-2 as wages, but not subject to FICA/Medicare. You can then deduct this amount on your personal tax return as an above-the-line deduction.
Taking these steps now, while there’s still time in Q3 and Q4, helps you stay ahead and avoid year-end surprises. It also ensures you make the most of tax-saving opportunities.
The Power of Collaboration: Bookkeeper + CPA
When a bookkeeper and CPA work closely together – or when you provide clear, organized records yourself – you get the best of both worlds: accurate financial data and proactive tax strategy. This reduces year-end scrambling, prevents missed deductions, and lowers tax prep costs. It also lets your CPA offer smart advice to minimize taxes and optimize cash flow.
Some businesses consider outsourcing their bookkeeping entirely. This can save time, reduce errors, and free up energy to focus on growing your business. If you’re curious about how outsourcing works and whether it might be a fit, check out this video:
Learn more about how bookkeepers, CPAs, and other financial professionals work together in our guide here.
Building a Strong Financial Team
As Q3 wraps up, it’s a natural time to step back and consider whether you have the right financial team in place. That includes both your CPA and your bookkeeper. Together, they should not only keep your records accurate but also provide guidance and strategy that support your business goals. Q3 is a good checkpoint to reflect and ensure your team is set up for success going into Q4 and the next year.
Team Health Check:
- Do they communicate clearly and respond in a timely way?
- Are they proactive in helping you plan ahead and avoid surprises?
- Do they keep you informed about potential savings or opportunities?
- Do their services and fees feel aligned with the value they provide?
Hiring or Switching? Things to Consider:
- Do they have experience with your type of business or industry?
- Are they comfortable with your bookkeeping system and technology?
- Will there be effective collaboration with the CPA, bookkeeper, and you?
- Do they offer guidance and check-ins throughout the year, not just during tax season?
Taking a moment now to review your financial team gives you time to make any adjustments and ensures you have the right support in place. This helps you head into tax season organized and confident.
Final Quarter To-Do List
As you head into Q4, use this checklist to wrap up the year smoothly:
✅ Schedule a planning meeting: Connect with your bookkeeper and CPA to review your year-to-date financials and discuss any year-end strategies.
✅ Review year-to-date tax payments: Adjust your final estimated payments if needed to avoid surprises.
✅ Clean up outstanding bookkeeping items: Make sure invoices, receipts, and accounts are up to date before December.
✅ Organize receipts and supporting documents: Especially for big purchases or fixed assets, having everything ready will make tax prep much easier.
✅ Review vendors and contractors: Make sure you have W-9s on file for anyone who may need a 1099 before the January 31 deadline.
Q3 is the perfect checkpoint to pause, review, and plan. A little attention now goes a long way toward avoiding year-end headaches, maximizing savings, and setting your business up for a strong finish to the year.
At Multi Business Solutions, we help small businesses stay ahead with accurate bookkeeping, proactive planning, and trusted CPA referrals. Reach out today — before Q4 gets busy — and let’s set you up for a smooth year-end!