Pet Business Bookkeeping: Year-End Checklist

Pet business bookkeeping at year-end means reconciling every bank, card and cash account, confirming income and sales tax, accounting for tips, deposits and prepaid packages, counting inventory, and organizing records so your accountant can file accurately. Doing these steps in November or December, rather than in a rush in March, typically saves hours of cleanup and helps you spot tax-saving moves while there is still time to act.

This checklist is written for groomers, mobile groomers, dog daycare and boarding operators, and pet retailers. Work through it in order; each step builds on the one before.

Why does year-end pet business bookkeeping matter?

Pet businesses have messier books than most small shops. You take cash, cards and tips, sell prepaid packages and memberships, collect boarding deposits, and often carry retail inventory on top of service revenue. Each of those creates a place where the books and reality can drift apart.

A clean year-end is not about the tax return. It is about knowing which services, clients and products actually made you money.

Reconciled books also make it easier to get a loan, sell the business, or simply decide whether to raise prices in January.

What should you reconcile first?

Start with the accounts that hold your money, because everything else is checked against them.

1. Bank accounts: match every transaction through the last day of the year to your statements.
2. Card processor deposits: compare gross sales, processing fees, refunds and chargebacks to what actually landed in the bank. Fees are a deductible expense and are often missing from the books.
3. Cash: reconcile the cash drawer or petty cash to recorded cash sales.
4. Credit cards and loans: confirm balances and separate principal from interest.
5. Payment platforms: include any online booking or invoicing deposits that settle outside your main processor.

A POS that ties each sale to a settlement makes this step far faster, because the report your accountant needs already exists. See how that works on our pricing page or request a demo.

How do you handle tips, deposits and prepaid packages?

These three items cause most year-end mistakes in pet businesses.

Tips

Tips collected on cards are not business revenue, and they must be tracked and paid out correctly. Confirm that card tips were passed to employees or contractors and that payroll records match. Ask your accountant how tips should be reported for your structure and location.

Boarding and daycare deposits

A deposit taken in December for a stay in February is generally a liability until the service is delivered, not income for this year. List all unapplied deposits at year-end.

Packages and memberships

If you sell prepaid grooming or daycare packages, unused credits at year-end are an obligation to the customer. Pull a report of outstanding balances, put a dollar value on it, and give it to your accountant. Your accountant will advise how to treat it for your accounting method.

What does a pet retail or grooming inventory count involve?

If you sell food, treats, toys or grooming supplies, you need a year-end inventory value.

• Count physical stock on or close to December 31.
• Value it at cost, not retail price.
• Write off expired, damaged or discontinued items.
• Compare the count to your system quantities and investigate large variances (shrinkage, miscounts, unrecorded returns).
• Separate retail inventory from consumables such as shampoo, which are usually expensed.

Which tax items should you confirm before December 31?

Rules vary by country, state and province, so treat this as a list of questions for your accountant rather than advice.

• Sales tax: reconcile tax collected on retail and taxable services to what you filed and remitted.
• Payroll: confirm withholding, employer taxes and year-end forms are accurate for employees and that contractors are classified correctly.
• Equipment purchases: dryers, tubs, vans, kennels and software may qualify for depreciation or special deductions, which often depend on the date they are placed in service.
• Vehicle and mobile grooming costs: keep mileage logs and fuel records for the van.
• Estimated payments: check whether a final quarterly payment is due.

How should you organize records for your accountant?

Build one folder, digital if possible, with these items:

1. Bank, card and processor statements for all twelve months
2. Profit and loss report and balance sheet
3. Sales by category: grooming, daycare, boarding, retail, memberships
4. Payroll summaries and contractor payments
5. Inventory count and valuation
6. Deposit and package liability reports
7. Receipts for large purchases and your lease or loan documents

If you run grooming, our grooming solutions page shows how appointments, payments and reporting stay connected so these reports are ready on demand.

What should you set up for next year?

Use the slow days after the holidays to fix the habits that created this year's cleanup.

• Reconcile monthly instead of yearly.
• Tag every sale with a service category so profit by line is visible.
• Set aside sales tax and estimated income tax in a separate account each week.
• Review the previous year's profit by service and adjust prices accordingly.

Frequently asked questions

When should I start year-end bookkeeping for my pet business?

Start in early December. That leaves time to reconcile accounts, run an inventory count and still make year-end purchase or payroll decisions before December 31.

Do I need an accountant if I use bookkeeping software?

Software keeps your records organized, but an accountant helps with tax strategy, entity questions and filing. Most owners benefit from both.

How do I treat prepaid grooming packages in my books?

Unused package balances are generally treated as a liability until the services are delivered. Run an outstanding balance report and confirm treatment with your accountant.

What records should I keep, and for how long?

Keep statements, sales reports, payroll records, receipts and inventory counts. Retention periods differ by jurisdiction, so ask your accountant, but many owners keep seven years as a safe default.

Can my POS make year-end easier?

Yes. A POS that records sales by category, tracks tips, processes payments and reports on packages and inventory removes much of the manual matching. Franpos combines these in one platform for pet businesses.