A Note from the CFO’s Desk

December is a month of transition, it’s a time to reflect, review, and reset.

As business owners, we often enter this month with two competing emotions: relief that another year is almost complete, and anxiety about the year to come. For many construction, trade, and service business owners, the final stretch of the year can feel chaotic, finishing jobs, finalizing payroll, and closing the books while trying to plan for 2026.

But year-end doesn’t have to be stressful. In fact, it can be your most powerful season for clarity and momentum.

From a Fractional CFO perspective, the companies that thrive in January are the ones that use December strategically. They don’t just file paperwork and roll numbers forward, they analyze, adjust, and align their financials with their goals.

In this month’s CFO Insights, we’ll break down the essential year-end financial wrap-up — what to review, what to prepare, and how to set yourself up for a stronger, more profitable new year.

Step 1: Review – Understand What the Numbers Are Telling You

The first step to finishing strong is reflection. Before you can plan for 2026, you need a clear understanding of how 2025 truly performed.

This goes beyond “Did we make money?” It’s about discovering where you made money, where you lost it, and why.

Start with the Critical 4

The Critical 4 Metrics — Revenue, Gross Profit, Net Profit, and Cash — are your foundation for year-end analysis.

Ask yourself:

  • Revenue: Did sales meet or exceed expectations? Which service lines or projects drove growth?
  • Gross Profit: Were projects priced and managed for healthy margins? Did materials, labor, or overhead erode profits?
  • Net Profit: After all expenses, are we profitable? Did profitability improve over the previous year?
  • Cash: How strong is our liquidity? Do we have adequate operating reserves going into 2026?

When you understand these numbers, you gain visibility into the health of your business — and clarity about where to focus next.

Review Supporting KPIs

Once you’ve reviewed the Critical 4, take a deeper dive into your supporting KPIs — the operational metrics that explain why those numbers look the way they do.

These include:

  • Accounts Receivable (AR) Days: How quickly are you collecting payments?
  • Job Cost Variance: Were estimates accurate? Where did execution fall short?
  • Labor Utilization: Were crews efficient and properly scheduled?
  • Overhead Ratio: Are general and administrative costs staying in proportion to revenue growth?

At McCoy Accounting Advisors, we encourage the use of KPI dashboards to track these metrics in real time. By reviewing KPI trends in December, you can pinpoint what’s working and what needs immediate attention before next year begins.

Analyze Trends, Not Just Totals

While looking at totals in your year-end review, also look for patterns. Spotting trends gives you insight for better strategy.

  • Did profitability improve quarter over quarter?
  • Did AR Days creep up during busy months?
  • Did certain job types consistently outperform others?

Your numbers tell a story. December is the month to listen closely.

Step 2: Reconcile – Clean and Close Your Books Properly

Before you can plan the future, your financial foundation must be accurate.

That means completing your year-end reconciliation — the process of verifying that your books match reality.

Year-End Reconciliation Checklist:

  • Bank and credit card accounts reconciled through December 31
  • Accounts Receivable verified against invoices and payments
  • Accounts Payable reviewed for accuracy and timing
  • Fixed asset register updated with new purchases or disposals
  • Payroll accounts reconciled with W-2 and 1099 totals
  • Inventory or materials list confirmed and adjusted

If your in-house team struggles with this process, consider the benefits of enlisting professional accounting, bookkeeping or Fractional Controller service in the new year. Inaccurate numbers now will carry errors into next year’s reports, making planning and tax preparation far more difficult.

Clean books equal confident decisions.

Step 3: Prepare – Tax Planning Before Year-End

Tax planning isn’t a January task it’s a December opportunity.

Before the year closes, review your tax position with your CFO and/or tax professional. A few key conversations now can significantly impact your 2025 liability.

Ask questions like:

  • Should we make strategic purchases before year-end to maximize deductions?
  • Are there outstanding invoices we can collect before December 31 to improve cash flow?
  • Can we defer certain income or accelerate expenses to balance taxable income?
  • Have we reviewed our depreciation schedule for potential write-offs?

Tax strategy is not just compliance — it’s part of profitability. December planning helps you capture legitimate savings and enter the new year with clarity.

Step 4: Forecast – Build a Smarter 2026 Budget

Once your 2025 results are clear, it’s time to finalize your projections for the new year.

Start by building your budget around priorities, not just expense categories. As we discussed in October, effective budgeting is about alignment, allocation, and opportunity.

Ask:

  • What are our growth priorities for the coming year?
  • Which projects or services will drive the highest margins?
  • What investments do we need to support growth — new hires, technology, or equipment?
  • What lessons from this closing year should shape next year’s strategy?

A budget is more than a forecast , it’s a leadership tool. It tells your team what matters most and creates accountability for achieving it.

Scenario Planning: Best, Worst, and Realistic Cases

Smart CFOs plan for multiple outcomes.

  • Best Case: If revenue grows faster than expected, how will you allocate excess profit?
  • Worst Case: If the economy slows, which costs can be reduced without hurting operations?
  • Realistic: What assumptions best reflect current market conditions?

Multi-scenario budgeting gives you agility. You’ll avoid being caught off guard or unprepared.

Connect Budgets to KPIs

Your budget sets the target; your KPIs measure progress.

In the new year, plan to align your budget with 6 key KPIs:

  • Revenue
  • Gross Profit
  • Net Profit
  • Cash
  • AR Days
  • Job Cost Variance

This combination ensures your budget isn’t just theoretical, it’s trackable and actionable throughout the year.

Step 5: Strategize – Turn Reflection into Action

A year-end financial wrap-up is as much about cleaning up the past as it is about planning your next move.

Once your review, reconciliation, and forecasting are complete, take time to answer these key strategic questions:

  • Pricing: Are we charging appropriately for our value and overhead structure?
  • Profitability: Which services or clients deliver the best ROI?
  • Cash Flow: How can we reduce AR Days or build reserves in the coming year?
  • Team: Do we have the right roles, skills, and accountability in place for growth?

Use your financial insights to make strategic adjustments now before the new year begins.

Step 6: Communicate – Share the Vision with Your Team

Financial leadership isn’t just about numbers, it’s also about communication.

Once your year-end review and next year’s plan are complete, share them with your leadership team. Transparency builds alignment, motivation, and accountability.

  • Present your current year performance highlights and lessons learned.
  • Outline your coming year’s goals and key priorities.
  • Define how each department or role impacts those goals.

When employees understand where the company is headed and how their work contributes they become partners in success.

Step 7: Execute – Start the New Year with Confidence

January should be about execution of your strategic plan.

Here’s your checklist for a confident start:

  • Budget approved and communicated
  • KPIs integrated into dashboards and reporting
  • Cash flow forecast updated for Q1
  • Payroll, benefits, and tax forms submitted accurately
  • Year-end reports archived and ready for your tax professional

Start the new year with momentum fueled by clean data, clear goals, and consistent processes.

This Year’s End is Next Year’s Launchpad

Too often, business owners treat December as the finish line. In reality, it’s the runway for the year ahead.

The habits you establish now will determine your trajectory in Q1.

It’s your chance to:

  • Turn reflection into strategy.
  • Turn data into decisions.
  • Turn goals into measurable outcomes.

Your current year’s results don’t define you, but your response to them does.

The McCoy Accounting Advisors Approach

At McCoy Accounting Advisors, we help business owners simplify financial leadership through clarity and confidence.

Our accounting, bookkeeping, payroll, Fractional Controller and Fractional CFO services combine construction accounting, budgeting for construction companies, and KPI dashboards for trades businesses to create systems that strengthen cash flow, improve profitability, and align financial goals with business vision.

Final Thoughts

Your year-end wrap-up is your chance to finish the current year strong and build momentum in the right direction. Opening the new year with a strategy towards a better future.

Take time this December to:

  • Reflect on your results.
  • Clean up your financials.
  • Finalize your budget.
  • Set your KPI strategy.
  • Communicate your goals.
  • Launch into the new year with clarity, purpose, and confidence.

When you manage your year-end like a CFO, you enter the new year with a clear map to reach your destined goals.

Here’s to clarity, confidence, and a profitable 2026.