Financial Organization

How to organize your financial documents for Canadian Small Business Owners

Most business owners aren’t thrilled about the year-end tax season, but it’s simply inevitable.

Many steps need to be taken in order to assure that one’s business documents are organized, prepared, accurate, and ready to be submitted. For new business owners, this may be a completely new and confusing experience.

Luckily, preparing financial documents is not as difficult as it seems.

This guide for small business owners and their admin staff will show just how one can prepare their financial documents for the end of the year in Canada, step by step.


How to Prepare Financial Documents for Small Business Owners

Before diving into the actual preparation steps, let’s take a look at what should be done first.



The type of structure a business chooses has an impact on the way one can report their income. Before even diving into your documents, determine whether or not you are a corporation, partnership, or sole proprietorship in Canada. You can learn more about which label applies to your business with a little research.


Organizing and Preparing Documents

  1. Gather all of your books. If you do not have a bookkeeper or accountant, it may be beneficial to hire one. Especially if you have not been very organized through the year and have a pile of disorganized receipts for business transactions. Regardless, you’ll need to gather everything related to your business finances: receipts, invoices, payroll, etc.
  2. Examine your ratios. You will need to gather three key documents: a Balance Sheet, an Income Statement, and a Cash Flow Statement. These documents will show your assets and liabilities, itemize your revenue and expenses, and track where your money has gone for the year. After you’ve completely filled these documents in, you’ll need to check your company’s current ratio, debt ratio, and profit margins. The Balance Sheet will make this very easy.
  3. Take a look at your goals. Evaluate your goals from the year. Using your business plan and comparing it to what you’ve actually achieved in the year can help. This can help you see what you can do in the future to better achieve your business goals.
  4. Look at your tax strategies. There are numerous strategies one can take to reduce the amount of income tax a business needs to pay at the end of the year. Investigate different strategies, especially ones that you haven’t used before, to see if they benefit you this year.
  5. Prepare your documents. You can do your taxes yourself or through an accountant. Simply gather everything you need and check to make sure no documents are missing that is required to file.
  6. Make copies. While much of tax season has been simplified through digitization, many businesses still deal with a physical paper trail. It would be wise to make physical copies of all of your documents, receipts, invoices, and other tax-related documents. 
  7. Digitize your copies. It is also wise to digitize and back up those documents as well in case of a future audit, as well as for future tax prep use. There are many types of tax prep software that feature cloud storage for this very purpose.
  8. Prepare for next year. If you struggled to keep track of all of your financial documents this year, make a plan for the upcoming year to avoid these troubles. Designate a file or dropbox specifically for financial documents. As they are generated or received throughout the year, keeping them in one specific spot will make gathering them at the end of the year much easier. You can also take it a step further and dedicate a specific filing cabinet to paper documents and actively entering information into tax prep software throughout the year to reduce year-end tax season stress.
  9. Paper trail. Some types of government audits still require all original documentation: receipts, invoices, statements, etc. Keep all original documents, organized by fiscal year, and in a location where it can easily be accessible, i.e. bi-folders, banker boxes, filing cabinets, etc. We recommend keeping your documents for the current and prior fiscal year, separated, in your office location for ease of access for any current inquiries.

How was our guide to prepping for year-end tax season and organizing business financial documents? Tell us what your tips are to stay organized in the comments below!


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