Year-end bookkeeping is one of the most important steps Ontario businesses must complete before tax season. Incomplete or disorganized records can lead to higher accounting fees, CRA delays, missed deductions, and audit risk.

This year-end bookkeeping checklist for Ontario businesses outlines exactly what to prepare before handing records to your CPA, ensuring a smooth, accurate, and cost-effective year-end process.

Why Year-End Bookkeeping Matters for Ontario Businesses

Proper year-end bookkeeping helps Ontario business owners:

• Reduce CPA fees
• Avoid CRA reassessments
• Maximize deductions and credits
• Ensure accurate HST filings
• Speed up corporate or personal tax returns

Clean books mean your CPA can focus on tax planning, not corrections.

Year-End Bookkeeping Checklist (Ontario Businesses)

1. Reconcile All Bank and Credit Card Accounts

Ensure:

• All business bank accounts are fully reconciled
• Credit cards match statements
• No missing or duplicated transactions

Unreconciled accounts are a top CRA audit red flag.

2. Review Income for Completeness

Confirm:

• All invoices issued are recorded
• Deposits match reported revenue
• No personal deposits are recorded as business income

Ontario businesses are frequently audited for underreported income.

3. Categorize Expenses Correctly

Verify that expenses are:

• Properly categorized
• Reasonable and business-related
• Supported by receipts

Common misclassified expenses include meals, vehicle costs, and home office expenses.

4. Separate Personal and Business Transactions

Before year-end:

• Remove personal expenses from business books
• Reimburse owner expenses correctly
• Avoid mixed-use accounts

CRA closely reviews owner-managed businesses for this issue.

5. Review HST (Ontario – 13%)

Confirm:

• HST collected matches sales
• Input Tax Credits (ITCs) are supported
• HST payable agrees with CRA filings

Errors in HST are one of the most common CRA reassessment triggers.

6. Verify Payroll Records (If Applicable)

Ensure:

• Payroll remittances are up to date
• T4s and T5s are accurate
• CPP, EI, and income tax deductions reconcile

Payroll errors can result in penalties and interest.

7. Review Fixed Assets & Depreciation

Prepare:

• List of assets purchased during the year
• Purchase dates and amounts
• Business-use percentage

Your CPA will determine Capital Cost Allowance (CCA).

8. Check Loan Balances and Shareholder Accounts

Confirm:

• Loan balances agree with statements
• Shareholder loans are accurate
• No overdrawn shareholder accounts

Incorrect shareholder balances can result in taxable benefits.

9. Prepare Supporting Documents for Your CPA

Provide:

• Bank and credit card statements
• Loan agreements
• Lease agreements
• Vehicle logs (if applicable)
• Investment statements

Complete documentation saves time and money.

10. Use CRA-Compliant Bookkeeping Software

Using software like QuickBooks Online ensures:

• Accurate reporting
• Easy CPA access
• Strong audit trails

Most Ontario CPA firms prefer QBO for year-end work.

Common Year-End Bookkeeping Mistakes in Ontario

• Waiting until tax season to organize records
• Missing receipts
• Incorrect HST treatment
• Ignoring shareholder loan balances
• Poor bookkeeping software setup

Avoiding these mistakes reduces stress and costs.

How a CPA Helps at Year-End

An Ontario CPA will:

• Review and adjust bookkeeping entries
• Ensure CRA compliance
• Identify tax planning opportunities
• Prepare corporate or personal tax returns
• Reduce audit exposure

Frequently Asked Questions (FAQs)

When should Ontario businesses complete year-end bookkeeping?

Ideally immediately after fiscal year-end, before submitting records to your CPA.

Do I need perfect books before giving them to my CPA?

No, but the more complete and accurate your books are, the lower your accounting fees will be.

Is year-end bookkeeping required for sole proprietors?

Yes. Sole proprietors must prepare accurate books before filing their T1 return.

Can QuickBooks Online be used for year-end bookkeeping?

Yes. It is the most commonly used bookkeeping software among Ontario CPAs.

What happens if books are not ready?

Delays, higher CPA fees, missed deductions, and increased CRA audit risk.