Fall is officially here, and with winter right around the corner, most nine-to-fivers are counting down to the holidays. Accountants, on the other hand, are counting down to something else entirely: the end of quarter four.
What you’ll learn
What you’ll learn
Key takeaways
- Clean financials early add up to smarter planning later and accurate books set the foundation for every year-end strategy
- Guide clients on asset moves before they act because early conversations prevent surprises and reinforce your advisory role
- Use timing within IRS guidelines to influence tax outcomes since income and expense timing can be a powerful planning tool
- Proactivity opens the door to more advisory work and year-end guidance often leads to deeper relationships and recurring revenue
In general, Q4 is when our focus shifts to the year-end closing procedures that keep clients in compliance and on solid financial footing as the new year approaches: finalizing closes, performing detailed reconciliations, reviewing payroll and contractor records, conducting inventory valuations, and analyzing year-to-date performance to create budgets and forecasts for the year ahead. Whew!
Behind the scenes, we’re working diligently — but clients rarely see the hours that go into keeping their financials accurate or fully appreciate the strategic value behind it. It’s no wonder many accountants end up feeling undervalued this time of year.
From slow season to growth season
But what if I told you that we can flip the script? That year-end is your moment to shine, and it’s the perfect opportunity to show your clients that you’re not simply a business expense, but a strategic partner who helps them make smarter decisions.
If you’re ready to make that shift, the five tips below will help you move from “boring accountant” to “rockstar advisor.”
Tip #1: Get financial statements ready sooner than later
The first step is taking the lead before things get messy. Most small business owners aren’t focused on their books this time of year; instead, they’re juggling sales goals, holiday plans, and day-to-day operations.
Because effective tax planning is only as strong as the data behind it, it’s crucial that your clients’ books are accurate and up to date long before the end of quarter four. This is the foundation of every smart year-end move and should be accomplished before making tax or spending decisions.
Reaching out early gives you a great opportunity to educate clients. Why? Many don’t realize how much clean financials matter — or how items like missing receipts and bank statements, or incomplete loan schedules and inventory counts, can derail their tax planning — and lead to unwelcome surprises in April.
By getting the ball rolling early, you give yourself and the client more time to spot potential red flags, identify new opportunities, and demonstrate the value of working with a strategic advisor who helps clients make confident, profitable decisions.
Takeaway: A simple reminder about the importance of clean financials builds trust and sets the tone for the rest of your year-end advisory guidance.
Tip #2: Give guidance on asset purchases
Once the books are clean, the next step is turning the insights into potential tax-saving strategies. One of the most meaningful conversations you can have with clients prior to year-end is about asset purchases; because, let’s face it, many of them go rogue and start buying things for “a write off” without understanding the real impact. By addressing this topic in advance, you can help them understand why and when asset purchases benefit their business, illustrating once more that you are an experienced, proactive advisor who’s truly in their corner.
Before your client goes on a spending spree, help them assess the following:
- Business need: Does the purchase align with the company’s long-term goals, or is it just a short-term play to save on taxes?
- Cash flow impact: Can the business afford to make the purchases without straining liquidity or creating unnecessary financial pressure moving forward?
- Tax strategy aspects: Do the purchases fall within a legitimate tax strategy framework, and will it provide the tax savings that the client is expecting?
Oftentimes, clients don’t realize that business write-offs aren’t dollar-for-dollar tax savings. When it comes to depreciating assets, additional rules can easily derail what they believe is a big tax-saving move (such as purchasing a vehicle without knowing about the luxury vehicle limitations or business use percentage requirements for depreciation). It’s also important for clients to know that when depreciation is accelerated, it can trigger recapture in future years.
In general, helping clients balance the timing of major purchases with their growth strategy and available cash is a surefire way to set you apart and strengthen your credibility as an advisor.
Takeaway: A “write-off” rarely means what clients think it does — and depreciation recapture can create future taxable income if not planned for.
Tip #3: Review asset sales before year-end
While asset purchases get all the hype in large part to social media tax influencers, asset sales should get more attention from entrepreneurs and business owners.
When a client sells an asset that was previously depreciated, part (or all) of the gain may be subject to depreciation recapture under IRC Section 1245 or Section 1250. This means the client could end up with more taxable income than expected once it’s time to file their taxes and the details come to light.
Review the fixed asset ledger and confirm whether any disposals occurred during the year. A few common examples are:
- Selling or trading in company vehicles
- Selling or replacing equipment or machinery
- Disposing of furniture, fixtures, or leasehold improvements
Doing this early gives you the opportunity to be proactive. If the client DID sell assets, you can help them estimate the gain and potential tax impact now to prevent surprises later. If the client plans to sell soon, you can guide them on timing, perhaps deferring the sale to the next year or pairing it with a new purchase that carries its own depreciation deduction to offset the impact.
Takeaway: This helps create a smoother filing season for both you and your clients, and reinforces your role as a trusted partner in their financial decision-making.
Tip #4: Time income as much as possible within IRS guidelines
Another impactful year-end strategy is helping clients understand income timing — especially for cash-basis taxpayers, who make up much of the small business world. One of the easiest ways to influence taxable income is to pay attention to when that income is recognized.
- For accrual basis taxpayers, income is recognized when it’s earned;
- For cash basis taxpayers, it’s recognized when the money is received.
Since most small business owners file their taxes on the cash basis, let’s focus there. In general, if a cash basis taxpayer hasn’t yet received payment for services rendered or products delivered, they don’t have to claim that income in the current year.
This means that by invoicing thoughtfully, collecting payments efficiently, and understanding the broader impact of timing on cash flow, clients can legitimately influence how much income is taxed in the current year.
However, this strategy comes with some caveats, and the concept of constructive receipt is a big one. Under this rule, income is taxable when it’s made available to the taxpayer — even if it hasn’t been physically received or deposited.
For example:
- A client who receives a check on December 30th but doesn’t cash it until January is still deemed to have received that income in the current year, or
- A customer payment sitting in the mailbox or unclaimed in an online portal before year-end is also taxable in that year
As an advisor, your role is to help clients understand these nuances. While deferring income can be a legitimate strategy, intentionally delaying deposits or manipulating timing has the potential to cross the line.
Takeaway: Encourage clients to plan ahead, and you just might find that this simple timing strategy becomes another tool in your advisory toolbox.
Tip #5: Time expenses as much as possible within IRS guidelines
Just as timing matters for income, it matters just as much for expenses. Since we focused on cash-basis taxpayers in the previous tip, let’s keep that focus here. In general, for cash basis filers, expenses are deductible in the year they are actually paid, just as income is reported when it is received.
Once clients understand this, their mindset shifts in one of two ways. The first group rushes to prepay every possible expense before December 31st to get an immediate deduction now. The second group doesn’t think about timing at all and continues business as usual.
Having worked with both types of clients for many years, I can confirm that both need guidance!
- For the first group, those eager to prepay, it’s important to understand that not all pre-payments qualify for a deduction in the current year.
- For the second group, the clients who do nothing, it may be worth exploring whether strategic prepayments could legitimately reduce this year’s taxable income
Either way, the key is understanding the IRS rules that govern these situations, particularly what’s known as the “12-month rule.”
In Publication 538, the IRS states:
“An expense you pay in advance is deductible only in the year to which it applies, unless the expense qualifies for the 12-month rule.”
“Switching payroll to OnPay for clients has been one of the best decisions I’ve made as a bookkeeper. OnPay has saved me hundreds of hours and saved my clients thousands of dollars. The software is extremely intuitive, the customer service is unparalleled, and the simple interface means I can confidently delegate to junior staff. I can spend the time I save on managing my business.”
— Ian McNaughton, Oberon Falls
Uncle Sam goes on to explain that the 12-month rule allows you to deduct prepaid amounts only if the payment creates a right or benefit that does not extend beyond the earlier of:
- 12 months after the right or benefit begins, or
- The end of the tax year following the tax year in which payment is made.
So what would this look like from a practical perspective?
Let’s assume that on December 30th, your client pays for a one-year insurance policy that covers January-December of the next year. Because the benefit period meets the 12-month rule, the full amount is deductible in the current year. However, if the payment covers more than 12 months or extends beyond the year-end of the next tax year, the full deduction isn’t allowed.
Because timing expenses require foresight to plan strategically while maintaining the knowledge and discipline to stay compliant, this is the perfect area for you to step in and demonstrate your value. By helping clients navigate these rules, you empower them to take control of their finances while giving them the peace of mind that comes from knowing they’re making smart decisions.
Takeaway: The 12-month rule determines whether a prepaid expense is deductible now or must be spread out over time.
Moving forward
For years in my practice, the final months of the year were always the slowest. While the downtime was a welcome break before tax season began, it also meant that my income took a big dip. When I shifted from being a reactive accountant to a proactive advisor, starting with year-end planning meetings, everything changed. Not only did my revenue grow, but my fulfillment did too. I was helping clients look ahead before it was too late, and many of those clients quickly realized that one year-end meeting still wasn’t enough and began signing up for ongoing quarterly or monthly advisory support.
Whether you choose to structure your practice this way or not, the fundamental idea remains the same. When you take the initiative to guide your clients proactively, they become happier, more appreciative, and far more loyal. Cheers to Q4!
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Marit Burmood is a tax advisor, small business coach, and financial educator dedicated to helping entrepreneurs achieve financial success. She holds a Master’s Degree in Taxation and is a CPA and EA with over a decade of experience guiding small business owners and tax professionals through the complex landscape of entrepreneurship.