It’s that time of year again – for holiday shopping and festivities, yes, but also for the annual ritual of every smart business owner: Closing the books. Yes, that can feel like drudgery, enough to make you put it off and go watch a football game instead.

But if you want to stay on top of your business and make the most of the time you put in every day serving your customers, this is one of those essential tasks. Here’s how you can make the job easier.

Separate accounts

Perhaps the most important reason to close your books at year’s end is also the worst reason: to keep your personal and business expenses straight. Believe it or not, many small business owners still try to run the business out of their personal bank accounts, or mix personal and business expenses on the same credit card. That is a terrible idea, and owners who do it should stop right away and establish separate accounts.

“It’s very important to make sure you do not comingle personal transactions with business transactions,” says Brian Jenke, a certified public accountant at Sanford, Baumeister and Frazier in Fort Worth, Texas. Keep a separate bank account and a separate credit card for business use only, and keep business expenses out of your personal bank account and off your personal credit card.

Until you take that step, an annual book-closing exercise is critical to making sure you accurately track all of your expenses and all of your income. Now let’s assume you already do those things. Let’s also assume you have an outside accountant who works with you, especially at tax time, because if you don’t, you really should get one.

Even in this situation, you’re not off the hook: Closing the books is still important. And the more you do yourself to organize your records, the less you’ll have to pay in accounting fees. “Clients have a choice,” notes Jenke. “They can do it themselves, or pay us our standard billing rate.”

Review your expenses

Step 1 is to review all your expenses. With separate accounts, these should be easy to capture. But you have a bigger opportunity here. Look for trends and habits that could affect the ongoing operation of your business.

Are you spending more on certain supplies (fuel, for instance)? Are you spending too much stocking up on inventory that then sits around unused? Are you making the most of seasonal price fluctuations for certain purchases?

One expense that many small businesses often fail to capture, Jenke says, is refundable deposits they pay out, such as damage deposits on leased equipment. Business owners may assume it’s an expense, ignoring the fact that they’re supposed to get it paid back when the leased item is returned in good condition.

“A lot of times, these deposits are never requested back, because the business owners never put it on their balance sheet,” Jenke says.

Review your income

Step 2 is to examine your income. Are all your customers paid up? Are you keeping track of those who haven’t paid? Did you forget to bill anyone? (Yes, that does happen.) Are your billings keeping up with past years? Or is business slacking off? And if so, is that a warning sign that you need to take some steps to turn it around?

If you tend to have steady income and expenses from year to year, this may be a routine task, but don’t skip it. On the other hand, your income may have taken a big leap this year. That makes this year-end review particularly important. “You want to make sure you do a good year-end close,” Jenke says. “Track that you’ve generated all of your bills properly and collected all of them, or know which ones are not collected.”

Plan for tax time

Step 3 is to analyze the tax implications of the year that’s just ending – and that’s the big reason you’re better off closing the books in December, rather than waiting for the New Year. One decision you might have to make is how to depreciate big-ticket capital expenses you made during the year.

Say you bought a truck for $40,000. Normal IRS rules require you, instead of deducting that expense all from this year’s income, to spread the expense over several years according to an established depreciation schedule set by Uncle Sam.

But what if you had a particularly huge income boost in the same year? It will be better for your tax bill if you can take the entire deduction in the current year. If you’ve made a profit rather than lost money, that’s also perfectly legal, if you follow the IRS rules for doing so.

Here’s where your accountant can really help you, and you’ll get much better help if you make that appointment now instead of waiting until the New Year. “A CPA has more time to consult with clients in November and December,” says Jenke. “Once January comes around, we’re closing people’s books, we’re doing people’s income taxes. We have a clearer focus in December to help them out.”

That timing also gives you the opportunity to make decisions that could cut your tax bill. For instance, if you’ve had a banner year, you can move some big expenses you would pay for anyway into the current year. After January 1, it’s too late.

Keep it going

But if you really want to get the most out of this task, don’t stop now. Put yourself on a schedule to close your books not just once a year, but every month. That’s the real secret to a smooth business operation. Jenke compares it to lawn care.

“It’s not that hard to cut your grass every week,” he says. “What if you waited three months before you cut it? Think about how big it is, all the weeds that are in it, all the extra trimming that has to be done. You’ll keep putting it off because the mountain’s too big to climb. But if you cut your grass every week, it always is manageable.”

Accounting is the same, he concludes. “If you close your books and review them every month, it’s a whole lot more manageable task. Plus you get used to them and it no longer frightens you. Slow and steady wins the game.”