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Year End Close Checklist Template

Three documents and five sheets, where last year's issued statements are the specification and the draft will not close while an account has no caption.

Free download  ·  No account needed

Caption Map

[Entity] — last year's statements read as a specification

Not a template to overtype. A list of the captions this entity reports and the notes it discloses, each one there because a condition was met.

Two directions, and neither one is optional

DirectionThe testWhat it finds
Accounts to captionsEvery account in the December trial balance lands in exactly one captionAn account with no caption. A decision nobody has made yet
Captions to accountsEvery caption in last year's statements is fed by at least one accountA caption with no account. A comparative column about to be restated by accident

Running one direction and not the other is the normal failure. The first finds what the business started doing this year. The second stops you deleting a line from a year that was already issued.

Presentation turns on a share, not a preference

class÷totalvsthreshold

Computed for both years, with the verdict recorded either way. A class that crossed the threshold this year comes out onto its own line, and the prior-year column gets re-cut into the new presentation. That second half is the step that gets skipped.

Every note carries two things, or it cannot be re-tested

A source numberThe one number the note exists to communicate
A conditionWhat made the note required. A balance existing, a share crossed, a claim accrued, an asset pledged

Four verdicts, and every note gets exactly one

ChangedCondition holds, number moved, note rewritten
UnchangedCondition holds, number inside the trigger. Recorded as a decision
DroppedCondition ended. Note leaves the current year, stays in the comparative
AddedA condition that did not hold last year holds now

Added is the verdict a rolled-forward file can never reach. A file holds the notes somebody already wrote, and nothing inside it asks whether one is missing.

Stale blocks the draft

source number moved past the trigger+text unchanged from last year

Not wrong yet. Not read yet. The trigger is stated as a percentage before anyone knows which notes will fail it, and the block clears when the note is rewritten or reaffirmed with a reason.

Every year end close checklist on page one is the same task list grouped by cycle: cash, receivables, payables, payroll, inventory, fixed assets, tax, with an owner, a due date and a status. One row near the bottom says assemble the financial statements. That row is the whole of December that a monthly close does not already cover, and none of these documents says how to do it. The better ones link to a statement template, which is last year's file with the numbers cleared.

Here last year's issued statements are the specification. Every caption comes out of them, the December trial balance maps onto that set in both directions, and neither direction is optional. Wexmoor Hydraulics, an illustrative maker of hydraulic cylinders, joined 72 accounts to 28 captions. Eight accounts had no caption, carrying 3,945,600 between them. Three captions had no account left, and deleting one of those would have restated a prior year that was already issued. Seven of the eight new accounts exist because the company started renting equipment in May.

Then every note gets re-tested against the condition that put it there. Three of thirteen were stale: the number moved and the paragraph did not, including a legal claim described as unresolved that had been settled in March. The Commission states its own thresholds, so a revenue class at or under ten percent may be combined and pledged assets get named with an amount. Have the audit preparation pack ready, because fieldwork starts on these drafts.

One year end, worked all the way through

The caption map both ways, the breakout test, thirteen notes re-tested, the four ties and the tax package.

Caption Map

Wexmoor Hydraulics, Inc. Year ended 31 December 2026. An illustrative maker of hydraulic cylinders and power units.

Accounts in the December trial balance72
Of those, carrying a zero balance3
Captions in the FY2025 issued statements28
Accounts with no caption to land in8
Gross balances with nowhere to go3,945,600
Captions with no account left feeding them3
Unmapped dollars after the December decisions0

Direction one: the eight accounts with no caption

AccountBalanceDecision
1290214,800Contract assets. New caption. There was no such balance at 31 Dec 2025
14801,559,300Rental fleet, net. New caption. Folding the fleet into property and equipment hides an asset class with its own life and its own revenue line
1485(312,000)Rental fleet, net. Presented against the fleet at cost
2280(96,500)Customer deposits. New caption. Refundable, so not deferred revenue
2450(240,000)Current portion of long-term debt. New caption. Last year had no current maturities line because the revolver was the only debt
4130(783,000)Income from rentals. New caption
5130312,000Cost of sales. Existing caption. The fleet earns the rental revenue, so its depreciation sits with it. Policy note added
7200(428,000)Gain on disposal of equity method investment. New caption, non-recurring

Seven of the eight exist because the company started renting equipment in May and borrowed to buy the fleet. The eighth is a January disposal. The year's two decisions are visible in the chart of accounts and nowhere else in the close.

What account 2450 costs if it gets swept into non-current debt

 Last year's formatCorrect
Total current liabilities3,116,0003,356,000
Current ratio2.482.31
Working capital4,626,1004,386,100

Both clear the 1.50 minimum in the credit agreement, so nothing breaks. The certificate still reports 2.31 rather than 2.48, and somebody signs it.

Direction two: the three captions with no account

CaptionFY2025What happened
Equity method investment612,000Interest sold 6 Jan 2026. Retained in the comparative with a dash in the current column
Accrued litigation settlement340,000Settled and released 11 Mar 2026. Retained in the comparative
Equity in earnings of affiliate71,000No current-year activity. Retained in the comparative

None of the three was deleted. Deleting an unfed caption restates a year that was issued, and nobody reads a comparative column closely enough to notice a line that quietly left.

The breakout test

Presentation turns on a share of the total. Computed for both years, verdict recorded either way.

Revenue classFY2025ShareFY2026ShareVerdict
Net sales of tangible products14,608,00091.9%15,174,00081.4%Separate, both years
Revenues from services1,081,0006.8%2,404,00012.9%Crossed. Now stated separately
Income from rentals0.0%783,0004.2%May combine. Separated by election
Other revenues211,0001.3%279,0001.5%Combined
Total revenue15,900,000100.0%18,640,000100.0% 

What that does to the prior-year column

 As issued for FY2025Re-cut for the comparative
Net sales of tangible productsOne line: 15,900,00014,608,000
Revenues from services1,081,000
Other revenues211,000

Services were 6.8 percent of revenue in FY2025, inside the allowance to combine classes, so combining them was correct. At 12.9 percent the class comes out onto its own line, and the prior-year column has to be re-cut into the same three-way split or the two years do not compare.

Rentals are the interesting one. At 4.2 percent they could have been combined. They are separated by election, because the fleet sits on the balance sheet at 1,247,300 and folding its revenue into product sales makes the margin on products unreadable. The reason goes on the record next to the share.

The threshold is set before the shares are computed. A threshold set afterwards is a preference wearing a number, and it will move again next year.

Disclosure Register

Thirteen notes in the FY2025 statements. Each carries a source number and the condition that made it required.

NoteSource numberFY2025FY2026MoveTextVerdict
Policiesnone singlerewrittenChanged
Revenueservices share6.8%12.9%89.7%rewrittenChanged
Receivablesallowance152,000182,00019.7%carried forwardSTALE
Inventoriesreserve194,000232,00019.6%rewrittenChanged
Propertynet productive assets1,642,9003,140,90091.2%rewrittenChanged
Leasesright-of-use asset574,100486,200(15.3%)rewrittenChanged
Debttotal outstanding1,150,0002,150,00087.0%rewrittenChanged
Assets subject to lienamount pledged7,461,100newfrom scratchADDED
Income taxesprovision214,300295,70038.0%rewrittenChanged
Contingenciesaccrued claim340,0000(100.0%)carried forwardSTALE
Related partyrent to a shareholder entity192,000198,0003.1%unchangedStands
Concentrationslargest customer share14.2%11.8%(16.9%)carried forwardSTALE
Equity methodcarrying value612,0000(100.0%)disposal note addedComparative
Subsequent eventsnone singlerewrittenChanged

The three stale notes, each for a different reason

Receivables. The allowance moved 19.7 percent and the paragraph still stated last year's 6.0 percent rate against trade receivables. The current rate is 5.9 percent. Nobody would call it a misstatement. It is a sentence that stopped being arithmetic and became a habit.

Contingencies. The claim accrued at 340,000 was settled and released on 11 March 2026. The note was carried forward verbatim, so the first draft told a reader the claim was unresolved, under a 31 December 2026 heading, on statements where the accrual reads zero two pages earlier.

Concentrations. Last year's note named one customer at 14.2 percent of revenue. That customer is at 8.9 percent now and is no longer disclosable. Two different customers are over the threshold, at 11.8 and 10.4 percent. The note's shape did not change at all, which is why nothing prompted anyone to reread it.

The related party row matters as much as the three that failed. Without it, a note nobody looked at is indistinguishable from a note that was checked and stands.

The four ties

Recorded even at zero, because a blank tie is indistinguishable from an untested one. No tolerance on any of the four.

TieLeftRightDifference
Assets equal liabilities plus equity11,510,70011,510,7000
Net income equals the retained earnings movement998,300998,3000
Cash flow ending cash equals balance sheet cash1,184,3001,184,3000
Provision equals the rate reconciliation295,700295,7000

Tie two, in full

Retained earnings, 1 January 20263,160,800
Net income998,300
Dividends declared(180,000)
Retained earnings, 31 December 20263,979,100

Tie three, and what the first pass got wrong

Net cash provided by operating activities506,700
Net cash used in investing activities(1,104,800)
Net cash provided by financing activities820,000
Net increase in cash221,900
Cash, 1 January 2026962,400
Cash, 31 December 20261,184,300

The first pass failed this tie by 600,000, which was 300,000 of net revolver repayments entered as a draw. A sign error shows up at twice its size, so the difference is worth reading as a clue rather than as a magnitude.

Tie four, in full

Federal tax at the statutory rate of 21 percent271,740
State income taxes, net of federal benefit52,700
Non-deductible portion of meals and entertainment11,500
Officers' life insurance premiums3,750
State penalty assessment1,050
Research credit(18,400)
Tax basis difference on the affiliate disposal(28,000)
Other, net1,360
Income tax provision295,700

Effective rate 22.85 percent. The three permanent-difference lines total 16,300, which is the 65,200 on the book to tax reconciliation at the blended 25.0 percent rate. Two schedules, one list of facts.

Tax Package

Which reconciliation the return carries is a balance-sheet test, decided once a year, and it changed this year.

 Total assetsThresholdSchedule
31 December 20259,417,90010,000,000M-1, the short reconciliation
31 December 202611,510,70010,000,000M-3, differences itemised

Cleared the threshold by 1,510,700 on 2,092,800 of growth in the year. The rental fleet at 1,247,300 net is 82.6 percent of the amount cleared. An operating decision made in May changed which schedule the return carries the following March, and no month-end close would have raised it.

Book to taxable income, every line naming its source

LineAmountSource
Book pre-tax income1,294,000Income statement draft
Non-deductible portion of meals and entertainment46,000Account 6140 detail
Officers' life insurance premiums15,000AJE-11
State penalty assessment4,200AJE-12
Permanent differences65,200 
Book depreciation over tax depreciation(454,800)Register and tax schedule
Allowance for credit losses, increase30,000AJE-01
Inventory reserve, increase38,000AJE-02
Accrued warranty, increase18,600AJE-03
Compensation unpaid at 15 March64,000AJE-04
Deferred service revenue taxable on receipt224,300Account 2200 movement
Rental deposits taxable on receipt96,500AJE-06
Affiliate disposal, tax basis over book basis68,0006 Jan 2026 closing statement
Operating lease, book expense over rent paid(12,400)AJE-10
Section 263A additional inventory costs21,000Costing schedule
Temporary differences93,200 
Taxable income before carryforwards1,452,400 

The two ties nobody runs

TieComputedAgainstDifference
Temporary differences at 25.0 percent23,300deferred tax movement 23,3000
Permanent differences at 25.0 percent16,300rate reconciliation lines 16,3000

Both are places the provision and the return disagree without either document showing it. A permanent difference on one and not the other means the effective rate the statements report and the taxable income the return reports disagree about the same fact, and neither reader can see the other's schedule.

What's in the pack

01

Caption Map sheet

One row per account and one row per orphaned caption, with the prior-year caption, the current-year caption, a direction flag and the decision behind every row that needs one. Everything else in the pack is downstream of this sheet, and drafting does not start until its unmapped total is zero.

02

Space rule

A caption is a threshold test. Last year's statements as specification, the map run in both directions, presentation decided on a share rather than a preference, four verdicts per note, stale blocking the draft, and unfed captions retained in the comparative. It governs every prompt here.

03

Disclosure Register sheet

One row per note: the condition that makes it required, its source number, both years' figures, the signed movement, whether the text was rewritten, the verdict, and one sentence of detail. The stale column is the one that catches last year's paragraph under this year's date.

04

Statement Drafts

Four statements with both columns, all four ties recorded at zero, the rate reconciliation, and fourteen notes each carrying the source number it was drafted from. The policies note states whatever the accounting policy manual actually says the company decided, not a rewritten paraphrase, and the next reader can re-test any other note without reconstructing where its number came from.

05

Disclosure Checklist

Not a list of notes a company might need, which is always somebody else's list. How the re-test works, the four verdicts, the stale trigger and what clears it, and the three conditions worth testing by hand because a ledger will never raise them.

06

Task Tracker sheet

Twenty-eight tasks, every one of them annual, with the dependency chain between them and a column saying why each is year-end only. A row that could also sit on the monthly close checklist does not belong here.

07

Adjusting Entries Log sheet

Each December entry with its accounts, its amount, its effect on pre-tax income, and one tax character from three: permanent, temporary, or neither. An entry with no character is an entry nobody has thought about, and there is no blank option.

08

Tax Package Index sheet

Every item the preparer needs, what it is for, what produces it, and whether it has been provided. Total assets of ten million or more mean the return carries Schedule M-3 rather than M-1, so the index starts with a balance-sheet test.

09

Year-End Checklist

The December-only task list, grouped into four dependency stages rather than by account cycle. What is deliberately absent is stated up front, because a hundred-row document hides the twenty-eight rows that only happen once.

10

Four prompts, in dependency order

Read last year's statements, map the trial balance both ways, re-test every disclosure, build the tax package. The order is enforced rather than suggested: a draft on an incomplete map gets rebuilt, and a note about a moving number gets written twice.

How to use it

  1. 1

    Take the files, or open the pack

    Download the three documents and five sheets as Word and CSV with no account. Or open the pack in River and hand it last year's statements, and the caption set extracts itself.

  2. 2

    Send four documents before anything else

    Last year's issued statements, the December trial balance at account level, the prior-year comparative trial balance, and last year's return as filed. Getting the ledger into one shape first helps, which the trial balance normalizer already does.

  3. 3

    Close the map in both directions

    Every account gets exactly one caption and every caption gets at least one account. Each unmapped account gets a decision recorded against it, not a nearby caption to hide in. Drafting waits until the unmapped total is zero.

  4. 4

    Draft, tie, then re-test every note

    Four statements, then the four ties at zero, and only then the disclosures. Each note gets its source number recomputed from the ledger and one of four verdicts, and anything stale blocks the draft until it is rewritten or reaffirmed.

Frequently asked questions

Is this template free?

Yes. The three documents and five sheets download as Word and CSV with no account, no card and no trial. Edit with AI is an optional second path for anyone who would rather hand over last year's statements than retype 28 captions by hand. The rest of the library is at free templates.

How is this different from a month end close checklist?

It has none of the same rows. Bank reconciliations, subledger tie-outs and flux commentary run twelve times a year and belong on that checklist. These twenty-eight tasks happen once: statement drafting, the caption decisions, the disclosure re-test and the tax package.

We have never issued statements. Does the method still work?

Partly, and say so early. Without a prior set there is no caption set to extract, so it has to be chosen instead, which is a conversation rather than a read. Everything downstream still applies, and next year the method works normally because this year produced the specification.

Why not just delete a caption nothing feeds any more?

Because the comparative column still needs it. Delete the line and the prior year silently changes shape, and the prior year was issued. It stays with its prior-year figure and a dash in the current column, plus a note about whatever ended it.

Is a note being stale actually a problem if the number is right?

Sometimes not, and stale never claims the note is wrong. It says the number moved past the trigger and nobody has read the sentence since. In the worked example one stale note described a claim as unresolved that had settled in March, on statements where the accrual reads zero.

Does this cover the audit that comes after?

No. These drafts are what fieldwork starts on, and the request list, the tie-outs and the confirmations are a separate job, handled in the audit preparation pack. Its own Lead Schedule Index cites schedules that lead schedule set actually builds, rather than a blank caption copied by hand every year. The account-level support underneath sits in balance sheet substantiation.

What format are the downloaded files?

Three .docx documents covering the year-end checklist, the statement drafts and the disclosure checklist, plus five .csv sheets, all in one zip. Everything opens natively in Word, Pages, Google Docs, Excel, Numbers and Sheets with no conversion step.

Read last year's statements as a specification

Download the blank pack as Word and CSV files, or open this exact pack in River and let it extract the caption set and map your December trial balance onto it.

Edit with AI