Disclaimer:
I am not a tax professional, accountant, or attorney. This guide is shared for informational purposes only and reflects general best practices for year-end organization within a small publishing business or self-publishing operation. It does not constitute legal, financial, or tax advice. For guidance specific to your situation, please consult a qualified tax professional or legal advisor.
For Small Presses, Micro-Publishers, and Self-Published Authors
Whether you run a small independent publishing company or operate as an indie author managing your own catalog, closing out your books at the end of the year is essential for staying tax-compliant, understanding your financial performance, and preparing for a stronger publishing year ahead.
This guide includes tasks, checklists, and critical reports you should generate at year-end.
1. GATHER ALL FINANCIAL & SALES DATA
Before analyzing anything, collect all relevant documents.
Documents to Gather
- Bank statements for business accounts
- Credit card statements
- Bookkeeping software exports (QuickBooks, Wave, FreshBooks, etc.)
- Platform sales reports:
- Amazon KDP
- IngramSpark
- Barnes & Noble Press
- Kobo
- Draft2Digital
- ACX/Audible
- Etsy (printables)
- Payhip/Gumroad (direct sales)
- Shopify store reports
- Royalties received from other publishers or collaborations
- Contracts with authors (if you publish others)
2. BOOK SALES RECONCILIATION
For Small Publishers
✔ Make sure all royalty statements received match the deposits in your accounts.
✔ Check for incorrectly paid royalties, missing payments, or duplicate entries.
✔ Reconcile:
- Direct sales (website, in-person events)
- Wholesale orders
- ARC/review copies (not income, but trackable)
- Bulk sales to bookstores or libraries
- Returns from distributors
For Indie Authors
✔ Reconcile sales from every platform.
✔ Check for:
- Missing royalties
- Not-yet-disbursed royalties
- Exchange rate discrepancies
- Chargebacks on eBook sales
- Print cost changes impacting net royalties
Reports to Generate
- Yearly sales summary (all platforms)
- Monthly sales breakdown
- Sales by title
- Sales by format (ebook, paperback, hardcover, audio)
- Refund/return report
- Pending royalty report
3. DIRECT SALES & SHIPPING RECONCILIATION
If you sell signed copies, merch, bundles, or digital downloads:
Tasks
✔ Reconcile Shopify/Etsy/Payhip/Gumroad sales
✔ Verify shipping expenses recorded accurately
✔ Confirm tax collection matches state requirements
✔ Log any unpaid invoices or manual orders
Reports to Generate
- Direct-sales P&L
- Shipping cost summary
- Tax collected by jurisdiction report
- Inventory shipped vs. remaining
4. SALES TAX REVIEW
This is extremely important for publishers who sell direct.
Tasks
✔ Determine economic nexus in other states (based on sales volume thresholds)
✔ Verify sales tax was correctly charged and remitted for:
- Direct online sales
- Event sales (book signings, markets, fairs)
- ✔ Ensure digital product tax is applied correctly (varies by state)
Reports
- Taxable vs. non-taxable sales
- Totals remitted per filing period
- Exemption certificates (if wholesale buyers purchased from you)
5. EXPENSE REVIEW & DEDUCTIBLE CATEGORIZATION
Publishing/business-related expenses often go unclaimed.
Deductible Expenses to Review
- ISBN purchases
- Editing fees
- Formatting and design services
- Illustrations or cover art
- Advertising and marketing
- Book printing costs
- Review copies / promo copies
- Event expenses (tables, travel)
- Shipping supplies
- Software subscriptions (BookFunnel, Canva, ProWritingAid, Vellum, etc.)
- Domain, hosting, and website fees
- Audiobook production costs
- Business coaching or consulting
- Office supplies
- Home office deductions (if eligible)
Reports to Generate
- Year-to-date expense report
- Categorized expense summary
- Mileage log export (for events, post office trips)
- Depreciation schedule for equipment (computers, cameras)
6. AUTHOR ROYALTIES (FOR SMALL PUBLISHERS)
If you publish other authors, year-end is royalty season.
Tasks
✔ Reconcile royalty earnings by title and format
✔ Deduct printing costs, distributor fees, and returns
✔ Generate royalty statements for each author
✔ Issue payments (check, ACH, PayPal)
✔ Prepare 1099-NEC forms for authors earning $600+
Reports
- Royalty summary report
- Title-by-title earnings
- Cost deductions summary
- Year-end 1099 log
7. INVENTORY & PRINT STOCK CHECK
For both publishers and selling authors:
Tasks
✔ Count remaining copies of each title
✔ Note damaged or unsellable books
✔ Reconcile printed inventory to sales and free copies
✔ Update inventory in your bookkeeping system
✔ Evaluate what stock is worth writing off
Reports
- Inventory-on-hand summary
- Free/review copies report
- Write-offs and damaged stock report
8. WEBSITE, EMAIL, & BUSINESS SYSTEM AUDIT
Year-end is a good time to tighten your digital operations.
Tasks
✔ Archive old email campaigns
✔ Clean subscriber lists (GDPR/compliance check)
✔ Verify automations and welcome sequences still function
✔ Update product descriptions, pricing, and availability
✔ Renew domain names
✔ Check that store tax settings are up to date
9. FINAL FINANCIAL REPORTS FOR TAX PREPARATION
These documents should be ready for your accountant or CPA.
Required Reports
🧾 Financial Statements
- Profit & Loss (cash and accrual if possible)
- Balance Sheet
- Cash Flow Statement
🧾 Sales & Royalties
- Platform royalties summary (all platforms combined)
- Distributor sales
- Direct sales
- Refunds
🧾 Expenses
- Categorized expense summary
- Software and subscription fees
- Advertising/marketing breakdown
- Travel & event expenses
🧾 1099 Forms (if applicable)
- Authors
- Contractors (editors, designers, narrators, VAs)
- Freelancers paid > $600
🧾 Documentation
- Home office deduction worksheet (if used)
- Mileage records
- Receipts archive (digital and physical)
10. YEAR-END CLEANUP & ARCHIVING
Tasks
✔ Download and store year-end KDP, D2D, IngramSpark, ACX, Shopify reports
✔ Save PDF copies of all financial statements
✔ Backup manuscripts, covers, and formatted files
✔ Store all contracts and agreements in labeled folders
✔ Review your publication schedule for next year
✔ Update operating procedures based on lessons learned
11. STRATEGIC NEXT-YEAR PLANNING
Review Your Year
- Which titles performed best?
- Which marketing efforts produced ROI?
- Which formats (audio, print, ebook) deserve focus next year?
- Which ads underperformed?
- What were your largest expenses?
Plan Ahead
✔ Set production schedule for next 12 months
✔ Create marketing calendar (book launches, promos, events)
✔ Decide on new ISBN purchases or bulk buys
✔ Set sales and revenue goals
✔ Review subscription renewals and cancel what you no longer need
This list is not extensive and you should still consult a tax professional with any questions. However, staying on top of your paperwork is the best way to know how profitable you are. If you don't know where you stand profit-wise, you can't properly plan to increase those profits and hit your targets. We all dream of being able to earn a full-time income as writers. Knowing where you are in your journey gets you one step closer to attaining that dream!
Need a printable checklist? No problem! Grab it here. Printable Checklist.
Photo by cottonbro studio: https://www.pexels.com/photo/a-person-s-hand-holding-a-cheque-6862457/