This article is not to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary by location, consult a lawyer or HR expert for specific guidance.
Note: This article makes the assumption that your fiscal year is January to December. If you have a different fiscal year end, these tasks would apply to the last month of your fiscal year. You need to file your corporate taxes 6 months following the end of your fiscal year.
January is the start of a new year, but there are still some tasks you need to complete to close out the previous calendar year.
Reconcile your accounts
At the end of the year, and when you prepare your taxes, you'll want to have the most up-to-date and correct information in your financial reports. Reconciling can help ensure that.
When you reconcile an account, you compare the beginning balance and transactions listed in your QuickBooks Online company file with your monthly bank or credit card statements to make sure they match. Reconciling is like balancing a chequebook, as you review your bank statement to make sure it matches the amounts you recorded in your cheque register.
When your reconciliation is complete, you can be sure that the information in QuickBooks Online matches the information on your bank or credit card statement.
The process helps to ensure that important financial reports, like your Balance Sheet, are accurate.
Reconciling can seem intimidating if you haven't done it before, or if you haven't done it for a while. You can get extra help in the QuickBooks Community and from your accountant, and you can review the following for more information:
Run Balance Sheet and Profit and Loss reports
The start of the new year is the natural time to run reports and evaluate how your business performed over the previous year.
Running reports is also an essential part of preparing for taxes.
The two most important reports that you and your accountant will need are the Balance Sheet and Profit and Loss reports, and it's a good idea to run these reports at the beginning of the year. Make sure the date range in the Transaction Date field for these reports covers the year you're reporting on.
For more information about your Balance Sheet and Profit and Loss reports, see the following:
Validate Capital Purchases and Disposals
Make sure that these have been recorded in the books. As well, you'll want to gather receipts from these to provide to your accountant when handing over documents to prepare your taxes.
An example of a capital purchase may be equipment, land, or vehicles.
An example of a disposal may be a vehicle that was written off in an accident or equipment that was sold.
File sales tax
Regardless of whether you file your sales tax annually or more frequently (quarterly, monthly, or other) you will need to file this in January. Refer to the schedule provided to you by the CRA.
Unfile sales tax
Need to unfile your sales tax? Easy breezy, you can learn how to do that with our How to unfile a a sales tax return article.
Close the books
If you use QuickBooks Online Payments to process credit cards and online invoice payments, QuickBooks Online automatically records those bank deposits for you.
For more information about closing the books, see Close the books.
Review other monthly tasks
For an overview of year-end tasks, or for information about month-specific tasks, see the following: