Preparing for the Year-End Close
Preparation begins by establishing a close schedule, assigning responsibilities, and identifying outstanding transactions. Finance teams should confirm that invoices, customer receipts, vendor payments, payroll entries, and job cost transactions for the reporting period have been recorded in the appropriate accounts and periods.
Before beginning year-end processing, review the accounting calendar and confirm which periods must remain available for adjustments. Back up company data according to the organization's procedures, verify user access, and ensure that supporting documents are organized for review.
- Collect outstanding vendor invoices, customer billing records, receipts, and expense documentation.
- Review unposted transactions, pending approvals, and incomplete job cost entries.
- Reconcile bank accounts, credit card accounts, and relevant subsidiary ledgers.
- Review payroll records, employee information, tax balances, and required year-end filings.
- Confirm that the trial balance and supporting schedules are ready for financial review.
A documented checklist helps the controller track completion, record unresolved items, and maintain clear accountability throughout the close.
Reconciling Accounts and Reviewing Job Costs
Account reconciliation is central to a reliable year-end close. Bank balances should agree with completed bank reconciliations, while accounts payable and accounts receivable balances should agree with their respective supporting records. Finance teams should investigate old outstanding checks, unapplied customer receipts, overdue vendor credits, and unusual account balances before finalizing reports.
Construction businesses also need to review project-level financial information. Compare estimated costs with actual labor, materials, subcontractor expenses, and other job costs. Check whether completed work has been billed appropriately and whether costs incurred before year-end have been recorded in the correct accounting period.
For example, if a contractor receives materials worth $12,500 before December 31 but the supplier invoice arrives in January, the expense or project cost may need to be recognized in the earlier period, depending on the facts and applicable accounting treatment. The finance team should review the receipt, purchase order, and invoice status to determine the appropriate accrual and subsequent reversal or settlement entry.
The guide Cut-Off Date Accruals: 2026 Guide for Finance Teams explains how finance teams identify, estimate, record, and reverse period-end accruals. Applying appropriate cut-off procedures helps ensure that expenses and liabilities are reflected in the reporting period to which they belong.
Payroll, Taxes, and Financial Statements
Payroll review may include verifying employee wage totals, deductions, employer taxes, and annual reporting information. Contractors should confirm that payroll records are complete and that required forms and filings are prepared according to the relevant jurisdiction's deadlines. Any year-end payroll adjustments should be reviewed and supported by appropriate documentation.
Financial statement preparation involves reviewing the trial balance, balance sheet, income statement, and general ledger detail. Investigate unusual fluctuations, negative balances where unexpected, unreconciled clearing accounts, and expenses assigned to incorrect cost codes. Fixed asset records, depreciation entries, accrued expenses, and other adjusting journal entries should also be reviewed where applicable.
Year End Reporting is the preparation and presentation of financial and operational information for the completed reporting year. Year End Consolidation combines financial information from relevant entities or business units into consolidated results when the organization requires it. Year End Certification involves formal confirmation that required year-end information or controls have been reviewed in accordance with the applicable process.
Closing the Year and Opening the Next Period
Once reconciliations and adjusting entries are reviewed, confirm that financial reports reflect the approved closing balances. Retain supporting schedules, bank statements, payroll documentation, journal entry explanations, and approval records. The accounting team should verify the appropriate procedure for closing the fiscal year and carrying forward balances in the installed Sage 100 Contractor version.
After year-end processing, review the opening balances in the new fiscal year and confirm that balance sheet accounts carry forward correctly. Revenue and expense accounts are generally handled according to the software's year-end procedures and the organization's accounting setup. Do not assume that every closing action is reversible or identical across versions; follow the documented workflow and verify backups before performing final processing.
For businesses using an ERP alongside other finance systems, integration and data consistency also deserve attention. The article DCAA-Compliant ERP: 2026 Buyer's Guide + AI Audit Tips discusses ERP selection, integration, and audit readiness for government contractors. Understanding how systems exchange financial information can help teams maintain consistent records throughout the close.
Automation and Year-End Process Improvements
Finance teams can improve close consistency by standardizing checklists, assigning clear review responsibilities, documenting recurring journal entries, and monitoring unresolved exceptions. Technology-led finance transformation can also help teams organize repetitive tasks and improve visibility into transaction status. The approach known as agentic ai uses AI agents to perform defined finance tasks, coordinate workflow steps, and support exception handling within configured controls.
For example, the Contractor Invoice Guide explains how contractors can create, manage, and automate invoices. Consistent invoice capture and validation can help teams confirm expenses before the books close and identify invoices that require accrual review.
The Hyperbots Platform supports company-specific ERP integrations, workflows, roles, and general ledger structures through configurable capabilities. Its Process Specific Capabilities support domain-focused finance automation, while Ready to Deploy Capabilities provide pre-trained agents and ERP connectors. Self Learning Capabilities help refine workflows using human feedback, and Human in the Loop processes allow people to review exceptions and approve actions. These capabilities can support selected finance workflows alongside the accounting team's established year-end controls.
Summary
The Sage 100 Contractor Year End Guide helps construction businesses organize the activities required to complete an accurate fiscal-year close. By reconciling accounts, reviewing job costs, verifying payroll and tax records, recording appropriate accruals, and validating financial statements, contractors can strengthen reporting accuracy and prepare reliable opening balances. A documented schedule, careful review, and adherence to version-specific software procedures help the finance team complete the close with clear supporting evidence and better visibility into business performance.