QuickBooks Online Year-end guide: What to do in December

This article isn't 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.

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.  Payroll tasks are always for a January to December calendar year, irrespective of your company's fiscal year.  For payroll tasks, refer to this article.

Before the end of the calendar year, there are a few key tasks you should complete.

Adjust payroll

Note: This should be done in December, regardless of your fiscal year.

Verify payroll amounts and deductions for each employee (CPP, EI, income taxes, etc) and adjust calculations so that you can apply any changes to the employee's last paycheque (or any pay within the month of December).  This saves you time when you prepare your T4s and avoid any PIER reviews, interest, and penalties.

Create and send customer statements

The end of the year is a good time to remind your customers of any outstanding balances that they owe to you, or to send them a statement of their activity throughout the year.

Identify any AR/AP that needs to be written off that is uncollectable/unpayable.  This may be a result of entry errors or uncollectible amounts.  This will help ensure you pay taxes on the correct amount.  Use credit memos to balance these items.

Learn how to create and manage statements.

Inventory

Perform an annual inventory count.  In the reports section there's a physical inventory worksheet to help with this.  Adjust inventory quantities as necessary.

Make distributions (only for corporations)

It's not mandatory, but you can choose to distribute profits (also known as retained earnings) to the owners or partners at the end of the year.

Prepare for taxes

Many small business owners use an accountant, especially at tax time.

If you haven't already done so, now is a good time to give your accountant access to your QuickBooks Online company so they can review your financial reports and other data, and even make any necessary changes before the end of the year.

Learn more about adding accountant users in QuickBooks Online.

Review other monthly tasks

For an overview of year-end tasks, or for information about month-specific tasks, see the following:

• Year-end guide: Overview
• Year-end guide: January
• Year-end guide: February