Year-End Accounting Checklist for Canadian Businesses

The end of the fiscal year is more than just a time to wrap up your books—it’s your chance to set the stage for a strong new year. A clear year-end accounting process ensures your financial records are accurate, helps you meet Canada Revenue Agency (CRA) requirements, and provides valuable insights for future planning.

Use this practical checklist to close your books confidently and get ready for the year ahead.

1. Reconcile All Bank and Credit Card Accounts

Before anything else, make sure every bank account, credit card, and loan account is reconciled. Match each transaction in your accounting software (such as QuickBooks, Xero, or Wave) to bank statements. Any discrepancies should be investigated and corrected so your year-end balances are accurate.

2. Review Accounts Receivable

Check that all customer invoices have been issued and recorded. Follow up on outstanding receivables and write off any uncollectible amounts. For tax purposes, you can claim a deduction for bad debts when you can reasonably determine they will not be collected.

3. Confirm Accounts Payable

Review unpaid bills and record any outstanding expenses. Make sure vendor statements match your books and that all expenses incurred before year-end are properly entered—even if you haven’t paid them yet. This ensures your financial statements and tax filings show the correct liabilities.

4. Count and Value Inventory

If your business carries inventory, conduct a physical count at year-end. Adjust your records for shrinkage, damage, or obsolete stock. The CRA requires inventory to be valued at the lower of cost or fair market value, so accurate counts help you avoid overstating assets and paying unnecessary tax.

5. Review Capital Assets and Depreciation

Update your fixed asset register to reflect purchases, sales, or disposals during the year. Ensure you’ve recorded the appropriate capital cost allowance (CCA)—Canada’s version of tax depreciation—so you claim the maximum allowable deduction.

6. Revisit Payroll Records

Confirm all payroll information is accurate:

• Employee earnings and taxable benefits
  
  

• Canada Pension Plan (CPP) and Employment Insurance (EI) contributions
  
  

• Income tax deductions remitted to the CRA
  
  

Prepare and file T4 slips for employees and T4A for contractors by the last day of February. If you paid dividends, remember to issue T5 slips for shareholders.

7. Finalize GST/HST and Other Sales Taxes

Reconcile your GST/HST collected and paid on expenses (input tax credits). File your final return for the fiscal year by the appropriate due date:

• Annual filers: three months after year-end
  
  

• Quarterly or monthly filers: one month after the period end
  
  

If you operate in provinces with provincial sales tax (PST), such as British Columbia or Manitoba, ensure those filings are also up to date.

8. Make Year-End Tax Planning Moves

Before the year closes, consider strategies to reduce your tax burden:

• Defer income to next year if you expect to be in a lower tax bracket.
  
  

• Accelerate expenses, such as necessary equipment purchases, to claim deductions this year.
  
  

• Maximize RRSP contributions (if you draw a salary) to reduce personal taxable income.
  
  

Discuss these strategies with your Chartered Professional Accountant (CPA) before your fiscal year-end to ensure they align with your situation.

9. Prepare Financial Statements

Compile your year-end financial statements:

• Balance Sheet – shows assets, liabilities, and equity
  
  

• Income Statement (Profit & Loss) – details revenue and expenses
  
  

• Cash Flow Statement – tracks inflows and outflows of cash
  
  

These statements are essential for filing your T2 corporate return (if incorporated) and for making strategic business decisions.

10. Back Up and Secure Your Records

The CRA requires businesses to keep records for at least six years from the end of the last tax year. Ensure your digital files are securely backed up—preferably in multiple locations or on a cloud platform—and store paper records in a safe place.

11. Plan for the Year Ahead

Use the insights from your year-end review to set new goals:

• Prepare a budget and cash flow forecast.
  
  

• Identify areas to reduce costs or increase revenue.
  
  

• Schedule quarterly check-ins with your CPA to stay on track.
  
  

A forward-looking plan transforms year-end from a compliance task into a springboard for growth.

Why a Year-End Checklist Matters

Completing these steps ensures:

• Accurate tax filings: Avoid penalties and interest by submitting correct returns.
  
  

• Better decision-making: Reliable numbers help you plan and secure financing.
  
  

• Audit readiness: Well-organized records reduce stress if the CRA requests an audit.
  
  

The Bottom Line

Year-end is more than an administrative chore—it’s an opportunity to strengthen your business and prepare for success in the coming year. By reconciling accounts, organizing records, and working closely with a CPA, you’ll meet your CRA obligations and gain the insights you need for smart business planning.

Need help closing your books and filing year-end taxes? Contact our team of Canadian CPAs today to book a consultation and start the new year on solid financial footing.