Year-End Bookkeeping Checklist for Small Businesses

A clean year-end close makes tax filing faster, reduces the risk of a CRA review, and gives you an accurate picture of how your business actually performed. This year-end bookkeeping checklist covers everything Toronto and GTA small businesses should complete before their books are considered closed for the year. Our bookkeeping team at Torontax helps clients work through this checklist every December and January.

1. Reconcile All Bank and Credit Card Accounts

Every business bank account and credit card used for the business should be reconciled to its year-end statement, with every transaction matched and any discrepancies investigated and resolved. Unreconciled accounts are one of the most common reasons a bookkeeping file needs costly cleanup before a tax return can be filed.

2. Reconcile GST/HST Collected and Remitted

Compare the total GST/HST you’ve collected and remitted throughout the year against what your bookkeeping records show. Mismatches here often indicate a missed sale, a duplicated entry, or an input tax credit that was claimed incorrectly, and they’re much easier to fix in December than after you’ve already filed a GST/HST return based on incorrect numbers.

3. Review Accounts Receivable and Write Off Bad Debts

Go through outstanding invoices and identify any that are genuinely uncollectible. Bad debts that meet CRA’s criteria can be written off and deducted, but only if they were previously included in income and you can demonstrate the debt is actually uncollectible.

4. Review Accounts Payable and Accrue Outstanding Expenses

Make sure all expenses incurred during the year — even if the invoice hasn’t been paid yet — are recorded in the correct period. This ensures your year-end financial statements reflect the true cost of running the business for the year, not just what happened to be paid by December 31.

5. Reconcile Payroll Records and Prepare T4s

If you have employees, reconcile total payroll paid during the year against your payroll remittances to the CRA. Employers must issue T4 slips to employees and file the T4 information return with the CRA by the last day of February following the calendar year — missing this deadline results in penalties, so payroll reconciliation should be one of the first items completed in January.

6. Count and Value Inventory

If your business carries inventory, a physical count at year-end is necessary to accurately value cost of goods sold and closing inventory on your financial statements. Inventory discrepancies between your books and a physical count should be investigated and adjusted.

7. Review Fixed Assets and Capital Cost Allowance

List all equipment, vehicles, and property purchased during the year, and confirm they’re properly categorized for Capital Cost Allowance (CCA) purposes. Assets sold or disposed of during the year should also be removed from your asset register with any resulting gain or loss recorded.

8. Organize Supporting Documents for Six Years

The CRA requires businesses to keep supporting records — receipts, invoices, contracts, bank statements — for six years from the end of the last tax year they relate to. Year-end is the ideal time to organize and archive the past year’s documentation, whether digitally or on paper, so it’s ready if the CRA ever requests it.

9. Prepare Year-End Financial Statements

As the next step in your year-end bookkeeping checklist, once reconciliations are complete, your bookkeeper or accountant should prepare a year-end income statement and balance sheet. These statements form the basis for your corporate or personal tax return and give you a clear picture of profitability for the year.

10. Meet With Your Accountant Before Filing

Before your return is filed, and as the final item on your year-end bookkeeping checklist, review your year-end financials with your accountant to identify any last-minute tax planning opportunities — such as RRSP contributions or timing of expenses — that are still available before your filing deadline.

Get Help With Your Year-End Bookkeeping Checklist

Working through a full year-end bookkeeping checklist on your own is time-consuming and easy to get wrong. Our bookkeeping and accounting team handles reconciliations, T4 preparation, and year-end financial statements for small businesses across Toronto, Scarborough, Mississauga, North York, Etobicoke, Brampton, Markham, Vaughan, and Richmond Hill, and works directly with our corporate tax team to make sure your books flow smoothly into your tax filing.

Contact us at (437) 410-7999 or use our remote tax filing service. For official CRA record-keeping requirements, visit Canada.ca — Keeping Records.

Last updated: September 10, 2026 – Verified against official CRA sources.