A good CPA bookkeeper handoff is a single package, sent once, that answers the tax preparer’s questions before they are asked: a locked trial balance, every bank and card balance tied to a statement, opening balances that agree with last year’s return, loans split into principal and interest, clearing accounts at zero, and a short list of anything unresolved. Everything else the CPA needs is derived from those pieces.
This page is written for two readers. CPAs and enrolled agents who receive files from Books LA, so you know what arrives, when, and how we handle your adjustments. And business owners who want to understand why a clean handoff shrinks the tax bill for preparation. We send this package for every client each January, and the format below is the one we use.
What the CPA bookkeeper handoff package contains
| Item | What it is | Why the preparer wants it |
|---|---|---|
| Trial balance, locked | Every account and its closing figure as of December 31, on a stated basis (cash or accrual), with a closing date set in the file. | The starting point. If it changes after the return is drafted, the return is wrong. |
| Comparative P&L and balance sheet | This year beside last year. | Big swings get a question now instead of a notice later. |
| Bank and card tie-out | One line per account: book balance, statement balance, difference of zero, with the December statements attached. | The ledger is our record; the statement is the third party’s. |
| Opening balance check | Our January 1 balances compared to last year’s adjusted trial balance, with any difference explained. | Retained earnings that do not tie to the prior return is the most common first question. |
| Loan schedule | Each loan: lender, year-end balance per statement, interest paid for the year, principal paid. | Only the interest is an expense. The statement proves the split. |
The schedules and the open items list
The second half of the package is the supporting detail. Each item is short, and each one answers a question the preparer would otherwise have to ask.
| Item | What it is | Why the preparer wants it |
|---|---|---|
| Fixed asset additions and disposals | Date, description, cost, invoice attached; anything sold or scrapped. | Depreciation is the preparer’s call; the list is ours to supply. |
| Owner activity | Draws, contributions, and shareholder loans, each coded and dated. | Equity questions are easier answered in January than in March. |
| Payroll tie-out | Wages and payroll tax expense in the books against the provider’s annual report and the W-3. | Payroll is the largest expense for most clients and the easiest to double-count. |
| Sales tax and 1099 summaries | Sales tax payable against the filed CDTFA returns; 1099 vendor totals with W-9s on file. | Transactional tax is our lane; the preparer only needs to see it ties. |
| Open items list | Anything we could not resolve, with our best understanding and the question for the client. | A short, honest list beats a clean-looking file with surprises inside. |
How the package is delivered
The package is one PDF plus a folder of statements, delivered by the end of January for calendar-year clients. The year-end bookkeeping checklist is the client-facing version of the same work, started in Q3.
The tie-outs we finish before anything is sent
A package is only as good as the checks behind it. These are the ones we complete for every file, and the ones we would want if the roles were reversed.
- Every account reconciled through December. Bank, credit card, loan, and payment processor accounts, each to its statement, each month. Not “the feed is current.” Actually reconciled, with the report saved.
- Clearing accounts at zero. Undeposited Funds, Opening Balance Equity, “Ask my accountant,” and any suspense account. A balance in one of these is an unfinished entry, so we finish it before sending.
- Opening balances agree with the prior return. If last year’s adjusting entries were posted, January 1 matches the adjusted trial balance. If they were not, then that is the first thing we fix, and we say so.
- Payroll liabilities clear after each deposit. The December balance should be the last payroll’s withholding, nothing older. The quarterly DE 9 totals match the books; our California payroll taxes post explains the mechanics.
- Sales tax payable equals the return. The December balance is the Q4 liability, and the filed returns match the books quarter by quarter as well.
- 1099 vendors confirmed. Totals by vendor against the $2,000 threshold for 2026 payments, W-9s on file, forms due January 31. The 1099 filing changes for 2026 post covers the IRS system switch.
- Basis stated. Cash or accrual, written on the cover page, the same basis every year unless the CPA asks for a change.
These checks are the December edition of the monthly bookkeeping close. The reason the package is ready in January is that eleven of the twelve months were closed as they happened.
How we handle the CPA’s adjustments
The preparer will have entries: depreciation, accruals, reclassifications, sometimes a correction to something we coded. The workflow we ask for is simple. First, the CPA sends the proposed adjusting entries with the adjusted trial balance. Then the client approves anything that changes a decision, such as an owner-loan reclass. Next, we post the entries dated December 31, confirm the file now matches the adjusted trial balance to the dollar, and lock the year. Then the next January starts from numbers both sides agree on.
Two things we will not do. First, we do not post an adjustment we do not understand without asking; a one-line note from the CPA saves a round trip. Second, we do not reopen a locked year for a convenience change. If a prior year has to move, the CPA knows first.
What stays with the CPA
Books LA is a bookkeeping firm. We do not prepare income tax returns, advise on income tax, choose entities, or interpret the tax treatment of a transaction. When a client asks us a tax question, the answer is “ask your CPA, and here is the report you will need when you do.” Instead, we provide the records and the transactional-tax work: payroll coordination, sales tax, city business tax, 1099s. The IRS recordkeeping guidance describes the records side; the employment tax due dates page sets the January 31 deadlines we work to. That boundary is deliberate. In fact, it is why CPAs can refer clients to us without competing for the return.
The January calendar
- By January 15: December closed and reconciled, 1099 vendor list final, W-9 gaps chased.
- By January 31: 1099-NEC forms filed and furnished; W-2s confirmed with the payroll provider; the handoff package sent to the CPA.
- February: questions answered within two business days; adjusting entries posted as they arrive.
- March: the City of Los Angeles business tax renewal filed from the same gross receipts figure, due at the end of February, per our LA business tax guide.
The current quarter’s deadlines are in the Q4 bookkeeping checklist.
The Los Angeles layer
Preparers outside Los Angeles sometimes meet our local items for the first time in a package: the city business tax renewal based on gross receipts, Westside city licenses with their own calendars, CDTFA district rates that vary by where the sale happened, and the EDD side of payroll. We include each as a one-line summary with the filed return attached, so nothing in the package needs local knowledge to read. Our Los Angeles bookkeeping services guide explains the full local calendar.
For CPAs: working with Books LA
We work with roughly thirty small businesses across Los Angeles in QuickBooks Online and Xero, with a near zero variance reconciliation standard and a close that finishes within the first two weeks of each month. If you have a client whose books arrive in March as a shoebox, or a file you spend more hours cleaning than preparing, we would like to be the firm that sends you the package above instead. Referrals go both ways, because our clients need a CPA they can trust, and we recommend the ones who send clear adjusting entries and answer our questions. A short call is enough to see whether the fit is there.
Frequently asked questions
What does a CPA need from a bookkeeper at year-end?
A locked trial balance on a stated basis, comparative financial statements, bank and card balances tied to statements, opening balances that agree with the prior adjusted trial balance, loan balances with the interest split, fixed asset additions, owner activity, payroll and sales tax tie-outs, and a list of open items.
When should the handoff package arrive?
By the end of January for calendar-year businesses, after 1099s are filed. Earlier is better for the preparer’s queue, of course. A package that arrives in March, after extensions are filed, has already cost the client the chance of an early return.
Who posts the CPA’s adjusting entries?
The bookkeeper, dated December 31, after the client approves anything that changes a decision. The bookkeeper then confirms the file matches the adjusted trial balance and locks the year, so the next January starts from agreed numbers.
Why does retained earnings not match last year’s return?
Usually because last year’s adjusting entries were never posted in the file, or a prior-year transaction was changed after the return was filed. The fix is to post the missing entries or reverse the change, and then lock the year. It is the first check in our opening balance review.
Does the bookkeeper handle any taxes?
Transactional taxes, yes: payroll tax records and deposits, sales tax returns, 1099 forms, and the city business tax. Income tax preparation and advice belong to the CPA or enrolled agent. Books LA does not provide income tax advice and works with each client’s CPA on those matters.
What basis should the books be on?
Whatever basis the CPA files on, kept consistent year to year, and stated on the package cover. Many small businesses keep accrual books for management and file on cash; the preparer decides, and the bookkeeper keeps both views reconcilable.
Can a CPA refer a client to Books LA?
Yes. Books LA does not prepare returns, so there is no overlap with the CPA’s work. The client keeps their CPA; we take over the monthly books and send the year-end package described here. A short call with the owner is the usual starting point.
If you are a CPA with a client whose books need this treatment, or an owner whose preparer keeps asking the same questions, book a short call and we will walk through last year’s package together.
This post is general information. Books LA provides bookkeeping services and does not advise on income tax. We work with clients’ CPAs and enrolled agents on income tax matters.
