As the fiscal year wraps up, it’s time for Ontario business owners to prepare their books and taxes.
Whether you manage a small corporation or a growing enterprise, closing your books properly before filing your T2 corporate tax return is critical. A clean year-end helps you avoid costly errors, stay CRA compliant, and improve your tax planning strategy for the year ahead.
At Stratos Accounting & Consulting, we specialize in helping Ontario businesses simplify year-end bookkeeping, reconciliations, and corporate tax filing. Use this step-by-step year-end closing checklist to stay organized and confident before you file.
1. Reconcile and Review All Financial Data
Start your year-end process by ensuring your financial records are complete and accurate.
- Reconcile all bank, credit card, and loan accounts to your fiscal year-end.
- Review accounts receivable and payable for any duplicate or missing entries.
- Verify that HST/GST filings match your bookkeeping records.
- Clean up any undeposited funds or suspense accounts holding old transactions.
A properly reconciled set of books gives your accountant confidence that your financial statements reflect reality — not assumptions.
2. Confirm Balance Sheet Accuracy
Your balance sheet forms the backbone of your corporate tax filing. Each account should be supported by documentation and reviewed for accuracy:
- Match loans and lines of credit to lender statements.
- Review shareholder loans for repayments, personal draws, or reimbursements.
- Reconcile inventory, prepaid expenses, and fixed assets.
- Verify intercompany and related-party balances for compliance.
If you’re unsure how to treat certain transactions (like personal use of company assets), consult your accountant for proper CRA reporting. You can check out our “7 Benefits of Corporate Tax Planning“
3. Review Your Income Statement (Profit & Loss)
Analyze your income and expense accounts to ensure everything is properly categorized and reported.
- Compare current results with the prior year to identify unusual variances.
- Reclassify any capital purchases incorrectly recorded as expenses.
- Double-check meals, auto, and home-office expenses for allowable deductions.
- Ensure payroll and subcontractor payments match your T4 and T4A filings.
A detailed income statement review helps you maximize tax deductions and ensures your T2 Tax return reflects accurate financial data.
4. Record Adjusting Entries
After reconciling your accounts, your accountant will make year-end adjusting journal entries such as:
- Amortization and Capital Cost Allowance (CCA) for depreciation.
- Accruals for unpaid utilities, wages, or expenses.
- Prepaid expense adjustments for rent or insurance.
- Tax provisions and prior-year adjustments.
These adjustments ensure your books align with CRA tax standards before filing your corporate return.
5. Organize Compliance Documents
Before submitting your T2 Corporate Tax Return, make sure all documentation is in order:
- Confirm all T4, T5, and HST filings are completed.
- Gather bank statements, loan confirmations, and major invoices.
- Ensure financial statements are correctly mapped to CRA’s GIFI system.
- Keep signed resolutions and representation letters on file.
Proper documentation not only helps with CRA compliance but also makes future audits or reviews stress-free.
6. Review, Sign, and File Your T2 Corporate Return
Once your financial statements are finalized:
- Review and approve your year-end financials.
- File your T2 corporate tax return electronically through your accountant.
- Confirm CRA submission acknowledgments are received.
- Archive all supporting documents for your records.
At Stratos, we also provide post-filing tax planning, helping you decide between salary vs. dividends and identifying opportunities for SR&ED tax credits or government grants.
Partner with Stratos for a Smooth Year-End
Year-end closing doesn’t have to be stressful. With the right process and a reliable accounting partner, your Ontario business can complete the fiscal year efficiently and confidently.
At Stratos Accounting & Consulting, we provide:
- Bookkeeping cleanup and reconciliations
- T2 Corporate Tax filing and review
- SR&ED tax credit assistance
- Strategic tax planning and advisory
Book your year-end review today — and make sure your next fiscal year starts on the right financial footing.