Year-End Guide: December 2021

by DanielleReese | Dec 7, 2021 | Accounting, Bookkeeping, Strategic Planning, Year End Accounting

Year-end guide: December 2021

It’s a good idea to perform certain year-end tasks with your financial records at the end of the calendar year. Some of the tasks are just good financial housekeeping, while others are required by the government.

Fortunately, you can spread the tasks over the period from December to February.

The following sections outline information about the tasks to perform in each month, as well as employee-related tasks for the end of the year.

December tasks

December is a good time to tie up loose ends for the closing year, to make profit distributions, and to start preparing for tax time with your accountant.

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.

Make distributions

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.

January tasks

January is when you should reconcile your accounts, prepare summary reports, and (optionally) close your books for the previous calendar year.

If you haven’t already done so, it’s also a good time to get in touch with your accountant and talk about preparing for tax time.

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.

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 if we can be of assistance please get in touch

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.

February tasks

The bulk of your year-end work should be complete by February, with just a task or two to finish up and prepare for taxes.

Prepare for taxes

An accountant is a valuable resource, especially at tax time. If you don’t have one or are looking for a change give us a call 

Payroll – Do you have employees?

If you have employees (not independent consultants or contractors), there are additional tasks you should complete at the end of the year, along with additional government forms to file and deadlines to meet.

• If you use standard QuickBooks Online Payroll, you can access information about year-end payroll tasks in QuickBooks Online by selecting Employees from the left menu, and then selecting Payroll year-end guide.
• If you use a different payroll provider, it’s important that you consult them for items and forms to complete for the end of the year.

Review these important direct deposit cut-off dates as you plan your year-end payroll work.

Other dates to remember

As you work through your year-end plan, don’t forget these important dates for your T4 and RL-1 forms.

• January 4, 2022- Electronic filing options are available online with Canada Revenue Agency and Revenu Québec.
• February 28, 2022- The deadline to export your T4 file and submit T4s and RL-1s with CRA and Revenue Quebec. You also must provide your employees a copy for their own records, which they use to do their personal income tax.