As the end of the year approaches, Canadian business owners are faced with more than holiday planning—they’re also getting ready to close their books. A well-organized year-end accounting process doesn’t just help you stay compliant with the CRA; it also sets you up for better financial decisions in the new year.
To help you stay on track, we’ve created a comprehensive year-end accounting checklist tailored for Canadian businesses. Whether you’re a sole proprietor or run a growing corporation, this list will keep your finances organized and your accountant happy.
We deliver a broad range of Tax Accounting Services in BC and other locations across British Columbia.
Our other tax services:
- Personal Tax Filing
- Business Tax Preparation
- Payroll Processing Services Vancouver
- WCB Employer Registration Coquitlam
- ROE Service BC
Year-End accounting checklist for canadians business
| Step | Task | Why It Matters |
|---|---|---|
| 1 | Reconcile bank & credit cards | Ensures records match and no errors |
| 2 | Organize receipts & invoices | Prepares for CRA audits, avoids missing data |
| 3 | Review AR & AP | Improves cash flow, avoids bad debts |
| 4 | Count inventory | Accurate COGS & profit reporting |
| 5 | Update fixed assets | Correct depreciation & asset management |
| 6 | Payroll reconciliation | CRA compliance, accurate T4 slips |
| 7 | Review expenses | Maximize deductions, correct categorization |
| 8 | Year-end tax moves | Reduce tax liability before deadlines |
| 9 | Review financial statements | Informs future decisions & budgeting |
| 10 | Meet accountant | Ensures compliance & strategic planning |
Recommended article:Small Business Bookkeeping Checklist for Success
-
Reconcile Bank and Credit Card Accounts
Start by comparing your accounting records with your bank and credit card statements. This ensures that your financials accurately reflect your transactions and that there are no discrepancies.
Tip: Use accounting software to make reconciliation easier and quicker. This step also helps identify any unauthorized or missed transactions.
-
Organize Receipts and Invoices
Throughout the year, it’s easy for receipts and invoices to pile up or get misplaced. At year-end, organize all documentation for:
- Sales and revenue
- Vendor payments
- Equipment purchases
- Travel and meal expenses
Tip: Digitize paper receipts using apps or accounting tools to reduce the risk of lost records and prepare for CRA audits.
-
Review Accounts Receivable and Payables
Go through your outstanding customer invoices and unpaid bills:
- Follow up on overdue accounts receivable.
- Pay off or negotiate outstanding vendor invoices.
- Write off any bad debts if recovery is unlikely.
Tip: Keeping these accounts updated improves your year-end financial position and cash flow visibility.
Recommended article: Start-Up Accounting Checklist for New Businesses
-
Count and Value Inventory
If your business holds physical inventory, it’s time to do a year-end count. Compare this with your accounting records and adjust for shrinkage or discrepancies.
Why it matters: Inventory impacts your cost of goods sold (COGS), which directly affects your profit calculation and tax obligations.
-
Review Fixed Assets and Depreciation
Update your fixed asset list (computers, equipment, vehicles, etc.) and make sure depreciation has been properly recorded for each item.
Tip: Dispose of outdated or unused assets and account for them appropriately in your books.
-
Prepare for Payroll Reconciliation
Ensure all employee wages, benefits, and tax withholdings are accurately recorded. Reconcile T4 slips, vacation pay, and any year-end bonuses.
Reminder: Year-end payroll reconciliation is critical for compliance with CRA regulations and to ensure your staff receives correct tax forms.
-
Review Business Expenses
Take a deep dive into your business expenses and ensure they’re categorized properly. Look for:
- Legitimate deductions you may have missed
- Expenses that might require additional documentation
- Opportunities to maximize deductions before year-end (e.g., prepaying certain expenses)
-
Make Year-End Tax Moves
Speak to your accountant about potential tax strategies you can use before the year ends. These might include:
- Accelerating business purchases
- Contributing to your RRSP or TFSA
- Deferring income until the new year
- Claiming depreciation or capital cost allowance (CCA)
-
Review Financial Statements
Once the above steps are complete, review your income statement, balance sheet, and cash flow statement. This gives you insight into how your business performed over the year and sets the stage for budgeting and forecasting.
-
Schedule a Meeting with Your Accountant
Your accountant is your best resource for ensuring your year-end process is complete and accurate. Bring them any missing documents, ask questions about potential deductions, and confirm your filing deadlines.
Our other financial services:
- Financial Service BC
- Business Evaluation Services BC
- Professional Business Plan Writing
- Financial Advisor for Budgeting
- Due Diligence Company
FAQ
Q: When should I start my year-end accounting?
A: Ideally, start preparing in early December to avoid last-minute scrambling. This gives you time to find missing documents and make any needed transactions.
Q: Can I handle year-end accounting myself?
A: It’s possible for very small businesses, but most owners benefit from hiring a professional to catch errors and maximize tax-saving opportunities.
Q: What happens if I don’t complete my year-end properly?
A: Incomplete or inaccurate records can lead to CRA penalties, missed deductions, and poor financial planning for the new year.
Q: Are there specific CRA deadlines I need to know?
A: Yes. For most businesses, T4s are due by the end of February, and tax returns are due by the end of June for corporations. Always verify your specific dates with your accountant.