Year-end accounting checklist (Canada): closing the books for proprietors and corporations

A Canadian year end sets off deadlines that do not line up with each other. Tax is payable before the return is due. Payroll slips follow the calendar year even when the business does not. The sales tax return runs on its own clock. A bookkeeper who waits for the accountant’s request list will be late for at least one of them. This checklist works the other way: close the books on ten schedules, then feed each filing from them. Deadlines are from the Canada Revenue Agency’s 2026 guidance, linked in the Sources section, and collected in Canadian tax deadlines.

Which clock is the client on?

In both columns the payment date falls before the filing date. For a proprietor the gap is six weeks; for a corporation it is three or four months. The practical deadline for the bookkeeper is therefore the payment date: the accountant needs closed books early enough to calculate what is owed.

The ten closing schedules

Each schedule answers one question: what outside evidence does this balance agree to? The method is the month-end close process, done once more with a full year behind it.

1. Bank and credit cards. Every account reconciled to its statement at the year-end date. Keep the statements. List outstanding cheques and deposits, and investigate anything outstanding for more than a few months.
2. Receivables. Aged listing agreed to the control account. Mark balances the client does not expect to collect and give the accountant the history; whether to write them off is their call.
3. Payables and accruals. Aged listing agreed to the control account, checked against supplier statements for the largest balances. Add accruals for goods and services received before year end and billed after.
4. Inventory. Count at year end, with signed count sheets and the valuation method used last year.
5. Prepaid expenses. A schedule of insurance, software, rent deposits, and similar items paid in advance, showing how much belongs to next year.
6. Capital assets. Additions with invoices, disposals with proceeds. Capital cost allowance is the accountant’s calculation; a clean list of what was bought and sold is yours. See how to claim equipment in Canada.
7. Sales tax accounts. GST/HST collected and input tax credits agreed to the returns filed in the year, and provincial sales tax where it applies. The filing workflow is in how to file a GST/HST return.
8. Payroll accounts. Gross pay, source deductions, and employer contributions agreed to payroll reports and to remittances made. This schedule feeds the T4s.
9. Loans and owner accounts. Loan balances agreed to lender statements with the interest split out. Shareholder loan and owner drawings accounts analysed entry by entry, since the accountant will ask about every one.
10. Income statement review. Each line against last year, with a note on anything that moved sharply. Check that meals and entertainment are coded apart from other costs, and that personal spending has not been left in expenses.

Filings the year end triggers

Payroll slips: last day of February

T4, T4A, and related information returns must be filed by the last day of February after the calendar year they cover ^[1] . Payroll follows the calendar year regardless of the business’s fiscal year, so a corporation with a June year end still has a February payroll deadline.

Before preparing slips, finish schedule 8 for the calendar year: total remittances made should equal total deductions on the slips. A difference found in February can be corrected before the slips go out. One found after filing means amended slips and questions from the CRA.

GST/HST return

• Monthly and quarterly filers file and pay one month after the end of the reporting period ^[2] .
• Annual filers file and pay three months after the fiscal year end ^[2] .
• Individuals with business income and a December 31 year end who file annually pay by April 30 and file by June 15 ^[2] .

Whatever the frequency, the last return of the fiscal year is the one to reconcile against schedule 7. Total GST/HST reported on the year’s returns should agree to the ledger accounts.

The income tax return

The accountant prepares the T1 business schedules or the T2 from your closed books. What they need from you is below.

The handover pack

• Trial balance at year end from the locked ledger.
• The ten schedules above, each tied to the trial balance.
• Bank and loan statements at the year-end date.
• Inventory count sheets.
• GST/HST returns for the year and the reconciliation to the ledger.
• Payroll summary and T4 summary.
• Invoices for capital additions.
• For proprietors: vehicle logs and home office details. See vehicle and home office claims.
• A note of one-off events and open questions.

How to make each schedule stand up to review is in workpapers and audit trail. How long records must be kept is in Canadian record-keeping requirements.

A timetable for a December 31 year end

For a corporation with a different year end, move the corporate rows and leave the payroll row where it is.

Locking the year

When the accountant confirms the figures, post their adjusting entries and lock the period, so the ledger’s closing balances are the ones on the filed return. In Xero, set a lock date under Accounting settings, Financial settings; in QuickBooks Online, turn on Close the books under Account and settings, Advanced, with a closing date and password ^{[3] [4]} .

Where ExpenseFlow fits

Schedules 3, 7, and 10 are quicker when purchases were captured and coded correctly all year. ExpenseFlow takes bills and receipts by upload, a per-client email address, or Google Drive, reads each line, and assigns an account and a province-aware tax code. Meals and entertainment that are only 50% claimable are split automatically into a claimable and a non-claimable line, each with the right tax code and account. Items wait in a review queue until a person approves them, then sync to Xero or QuickBooks Online. In Xero the source document is attached to the transaction.

ExpenseFlow does not prepare T-slips, file GST/HST or income tax returns, or post year-end adjustments.