As the fourth quarter gets underway, businesses across Virginia are shifting their focus to year-end reporting, tax planning, and budgeting for a successful 2026. This is a critical time for financial housekeeping. Yet, one item is often left unaddressed until it’s too late: aging accounts receivable.
Outstanding invoices from past quarters don’t just represent delayed revenue; they are a liability that can distort your financial picture and hinder future growth. Acting decisively in Q4 to resolve these delinquent accounts is one of the most strategic financial moves you can make all year. Here’s why.
Why Closing the Q4 Books Strong is So Important
Finishing the year strong means ensuring your books are clean and your cash position is secure. If you have past-due accounts that are draining your team’s time and resources, now is the time to act.
It Cleans Up Your Balance Sheet for Accurate Reporting
Your year-end financial statements—the balance sheet and P&L statement—are the scorecard for your business’s performance. They are scrutinized by lenders, investors, and internal leadership. Carrying a significant amount of past-due receivables can inflate your assets, painting an inaccurate picture of your company’s liquidity and health.
Addressing these accounts now, whether through successful collection or a strategic write-off, ensures your financial reports are a true and fair representation of your standing as you close out the fiscal year.
It Optimizes Your Tax Position
While no business wants to write off a debt, it is a reality of commerce. To claim a bad debt deduction for tax purposes, the IRS requires that you demonstrate a reasonable effort to collect what was owed. Making a concerted push in Q4, including engaging a professional collection attorney, serves as definitive proof of that effort. This action allows you to either recover the cash or confidently write off the loss, ensuring you take full advantage of any applicable tax benefits before the December 31st deadline.
It Secures Cash Flow for a Strong Start to 2026
The plans you make for the new year—from hiring and inventory to marketing and capital investments—all depend on healthy cash flow. Old, unpaid invoices act as a drag on your resources and complicate budgeting. By converting those outstanding receivables into cash during Q4, you create a stronger financial foundation to launch next year’s initiatives. It’s an opportunity to fuel your 2026 growth with revenue that was earned in 2025.
It Leverages a Shared Sense of Urgency
You aren’t the only one closing the books. Your debtor clients are also looking to settle their accounts and finalize their own financials before the year ends. This shared deadline creates a unique window of opportunity. Debtors are often more motivated to resolve outstanding liabilities in Q4, making your collection efforts more likely to succeed.
Don’t Let 2025’s Problems Linger into the New Year
The attorneys at Gilliam & Mikula can help you navigate this critical year-end process. We provide a professional, legally-backed approach to recover what you are owed, allowing you to focus on closing out a successful year.
Give us a call or fill out the form below, and let’s partner up to make 2026 your best year yet for cash flow!
Gilliam & Mikula is centrally located in Richmond, Virginia, and serves clients throughout the Commonwealth of Virginia. Our attorneys have over forty years of combined experience in various practice areas, representing individuals and businesses. We are licensed to practice in all General District Courts and Circuit Courts of the Commonwealth of Virginia including Central, Tidewater, and Northern Virginia areas, and throughout the states of both Maryland and North Carolina.
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