The Complete Year-End Financial Checklist for Quebec SMBs
Everything SMB owners need to know to prepare their financial year-end in Quebec, step by step.
The financial year-end is a pivotal moment for any SMB. It’s time to close your books, prepare your financial statements, and file your tax returns. Proper preparation makes all the difference between a smooth process and a stressful race against the clock. Here’s your complete guide to navigating the financial year-end in Quebec.
What Is a Financial Year-End?
The financial year-end (also called fiscal year-end) is the date on which your company’s accounting period ends. In Canada, incorporated businesses can choose any date as their fiscal year-end at incorporation. This date determines the period covered by your annual financial statements and tax returns. The most common year-ends are December 31, March 31, and June 30, but any date is permitted.
Key Deadlines in Quebec
Here are the deadlines every SMB owner must know:
- Filing deadlines: the federal T2 return and provincial CO-17 return must be filed within 6 months of the fiscal year-end
- Tax payment: the tax balance owing must be paid within 2 months of year-end (3 months for SBD-eligible CCPCs with taxable income not exceeding $500,000)
- Installment payments: if your federal or provincial tax exceeds $3,000, you must make monthly installment payments
- Tax slips: T4 slips (salaries), T5 slips (dividends), and corresponding Relevé 1/Relevé 3 must be issued by the end of February of the following year
10-Step Year-End Checklist
1. Bank Reconciliations
Ensure all your bank accounts are reconciled up to the fiscal year-end date. Every transaction must be recorded and discrepancies identified and corrected.
2. Accounts Receivable and Payable Cutoff
Verify that all revenue earned and expenses incurred before year-end are recorded in the correct period, even if payment occurs after the closing date. This is the accrual accounting principle.
3. Inventory Count
If your business holds inventory, perform a physical count at the year-end date or a nearby date. Reconcile physical quantities with your records and adjust for discrepancies.
4. Review Prepaid Expenses
Identify payments made for services that will be rendered after year-end (insurance, rent, subscriptions) and record them as prepaid expenses rather than current-year expenses.
5. Calculate Depreciation
Calculate the accounting depreciation of your fixed assets for the year. Note that accounting depreciation may differ from capital cost allowance (CCA) used for tax purposes.
6. Record Accrued Liabilities
Identify and record all expenses incurred but not yet invoiced or paid at year-end: accumulated vacation, declared bonuses, accrued interest, professional services received but not yet billed.
7. Analyze Shareholder Loans
Review shareholder account balances. If loans have been made to shareholders, ensure they are repaid within the timeframes prescribed by section 15(2) of the Income Tax Act to avoid personal income inclusion.
8. Verify Inter-Company Transactions
If you operate multiple corporations, reconcile all inter-company balances and ensure transactions are documented and conducted at fair market value.
9. Tax Provision
Estimate the tax expense for the year and record the appropriate provision. This includes federal tax, provincial tax, and, where applicable, Tax on Split Income (TOSI).
10. Document Organization
Gather and organize all documents needed for preparing your financial statements and tax returns: bank statements, purchase and sales invoices, loan agreements, leases, insurance policies, minutes, and director resolutions.
Common Mistakes to Avoid
- Waiting until the last minute: start your year-end preparation at least 2 to 3 months before the closing date
- Neglecting reconciliations: unreconciled accounts are the most frequent source of errors
- Forgetting accrued expenses: unrecorded expenses distort net income and the tax provision
- Mixing up fiscal years: recording revenue or expenses in the wrong year affects two years at once
When to Involve Your CPA
Ideally, your CPA should be involved well before year-end — not just after. A pre-closing consultation allows you to discuss tax planning, identify items to prepare, and avoid surprises. At Stamped, we support SMBs throughout the year-end process with a structured and transparent approach, from planning to filing.