Filing a clean year-end returns shortens tax preparation, decreases the odds of getting questions by the CRA, and gets money back quicker. This checklist will help you close your books in confidence and ensure you are in the driver seat in the next fiscal year.
Get Your Books Clean
- Reconcile bank, credit card accounts and close the period.
- Automate posting of both A/R and A/P subledgers into the general ledger.
- Verify inventory counts and post adjustments.
- Capture prepaids and accruals (insurance, software, utilities).
Close user access to prior months once reconciled to prevent silent changes. Old, uncollectible invoices; duplicate vendors; suspense/clearing accounts with balances.
GST/HST: Don’t Leave Input Tax Credits Behind
Sales tax slippage is common at year-end and expensive.
Essential Reconciliations
- Tie filed returns to the GL for each reporting period.
- Review input tax credits (ITCs) on fuel, freight, subcontractors, and SaaS, many are missed.
- Check place-of-supply rules for interprovincial sales to ensure the right rate was charged.
Monthly/quarterly filers typically remit one month after period-end; annual filers have different rules, confirm your registration details.
Create a “No-HST” expense review: scan big vendors where HST should have been billed.
Payroll Year-End Without Panic
T4s and summaries creep up fast.
- Reconcile gross pay, CPP/EI, and tax remittances to CRA.
- Track taxable benefits (auto, cell, health plans) and post them before the final payroll.
- Confirm contractor vs. employee status; issue T4A where required.
T4/T4A slips and summaries are due by the last day of February. Keep records and approvals on file. Negative CPP/EI variances, missing ROEs, and unpaid source deductions.
Deductions & Credits Worth a Second Look
Reported expenses that are legitimately deductible reduce taxable income; keep these well documented.
High-Impact Areas
- CCA: choose classes and rates thoughtfully; partial-year rules matter.
- Bad debts: write off amounts proven uncollectible before year-end.
- Home office/vehicle (for proprietors): keep mileage logs and allocate reasonably.
- Meals/entertainment: remember the 50% limitation.
- SR&ED (if applicable): contemporaneous documentation beats retroactive scrambling.
Save invoices, contracts, logs, and board approvals; CRA favors contemporaneous evidence. Attach a PDF backup to every high-value journal entry in your accounting system.
Close Confidently
A focused checklist is better than a last-minute rush. And to have another pair of eyes on the reconciliations, GST/HST, or payroll slips, Webtaxonline services Canadian small businesses throughout the year and can help to review your year-end package prior to filing, discreetly, in the background.
Final 5-Item Wrap-Up
Reconcile all bank accounts and credit cards carefully, making sure every transaction matches your accounting records. Review accounts receivable (A/R) to confirm outstanding customer balances, verify accounts payable (A/P) to ensure supplier bills are accurate and recorded, and perform a proper inventory count so stock levels align with your books.
Lock in payroll information, employee benefits records, and confirm all T4/T4A reporting timelines. Make sure salaries, bonuses, deductions, and remittances are fully recorded and compliant with filing deadlines to avoid penalties.
Document Capital Cost Allowance (CCA) schedules, review any bad debts that may be written off, and maintain detailed support for mileage logs and home-office expense claims. Clear documentation strengthens your tax position in case of review.
Plan owner compensation strategically by deciding between salary, dividends, or a mix of both. Also ensure sufficient cash flow is reserved for corporate tax return filing and any balance-due payment dates to prevent last-minute pressure.
Keeping your books tight, maintaining organized supporting evidence, and making financial decisions early significantly reduce tax risk, improve accuracy, and save valuable time—not just this year, but in the years ahead as well.
