Year-End Accounting Checklist for Not-for-Profit Organizations

Omar Visram
Year-End Accounting Checklist for Not-for-Profit Organizations
Bookkeeping and financial operations support for Canadian nonprofits
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Closing the year is integral to every non-profit organization’s (NPO) accounting activities, and many organizations have a March 31 fiscal year-end.

The year-end accounting process is important for any NPO because:

  • It is a necessary step in demonstrating fiscal responsibility.
  • It is required step in order to be able to file taxes and to have your year-end financial statements completed by a CPA firm (Audit, Review, or Notice-to-Reader).
  • Your funders may require it.
  • It provides the board of directors and leadership team with useful information to evaluate last year’s performance.
  • It is necessary for use as a starting point for next year’s budget.

The year-end accounting checklist is usually compiled by the internal finance department or bookkeeper or an outsourced bookkeeping firm. The NPO's Executive Director is ultimately responsible for ensuring accurate and transparent financial management.

That said, the year-end accounting checklist should be completed by the person or people who are closest to the accounting detail for the year.

1. Set Team Deadlines for Year-End Close

Before you kick-start the year-end checklist process, you must set deadlines with all stakeholders involved in the year-end process. These should include:

Internal Deadlines

  • Ensuring a complete set of accounting records with all relevant transactions for the year recorded in the books 
  • Account reconciliations (bank and credit card statements)
  • Adjusting journal entries (e.g., depreciation, vacation liabilities)
  • Schedule updates (e.g., deferred revenue)
  • Gathering documents to send to year-end accountants

External Deadlines 

  • Tax return and reporting deadlines
  • Reporting deadlines imposed by funders
  • Sales tax filing deadlines 

Setting clear deadlines ensures everyone involved in your nonprofit’s financial close understands their responsibilities and timelines, keeping the process on track.

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2. Compile All Documents

Record-keeping can be tedious, but it’s an important step in staying compliant. Proper document storage not only keeps your records organized but also reduces the time spent preparing for audits or funder reviews.

An easy way to keep track of all your accounting records is by storing them digitally. In the event of a Canadian Revenue Agency (CRA) tax audit, digital copies of your source documents will be accepted.

While physical documents and records are also an option, your organization will likely collect a variety of transaction documents to manage, like receipts and invoices. And physical filing storage systems tend to result in missing documents, poor organization of bookkeeping records, and lots of time spent filing.

Digital Recordkeeping Tips:

  • Use tools like Dext Prepare to digitize and store receipts, invoices, and bank statements.
  • Ensure every document is categorized and linked to the appropriate transaction in your accounting software.

3. Get Your Bookkeeping Up-to-Date

Many NFP organizations in Canada with restricted contributions tend to use fund accounting to track and report on their finances.

Organizations need to have a robust bookkeeping process for tracking transactions.

At year-end, having clarity on the spent/unspent balances from your funders is critical for reporting to your funders. Furthermore, if your year-end financial statements are reviewed or audited, your accountant will need to verify these balances and ensure they are appropriately presented in the year-end financial statements.

Bank Reconciliations

  • Reconcile all bank statements with your accounting records.
  • Investigate and resolve any discrepancies.

Accounts Receivable and Payable

  • Confirm that all invoices issued and received are recorded.  
  • Adjust for any doubtful accounts or write-offs.

Credit Card and Loan Accounts

  • Reconcile statements and ensure interest and fees are accurately recorded.

Verify Revenue and Expenses

  • Complete Data Entry: Ensure all income (donations, grants, fundraising) and expenses are entered.
  • Categorize Transactions: Assign correct account codes to each transaction.
  • Review Unrecorded Transactions: Check for any outstanding receipts or expenses not yet recorded.
  • Ensure that expenses and revenues are recorded on an accruals basis, and post adjusting entries for any unspent or unearned balances as of year end.  

Close Outstanding Transactions

  • Resolve unpaid invoices and bills.
  • Record any unposted deposits, refunds, or adjustments.
  • Ensure all transactions are finalized before reconciling accounts.

Keep Your Transactions Up-to-Date in Your Accounting Software

  • Use accounting software like QuickBooks Online to attach receipts and invoices directly to transactions.
  • Automate workflows to streamline manual tasks and create a clear audit trail.

4. Issue all tax receipts, confirm grant and donation compliance

For nonprofits authorized to issue tax receipts, ensure all donation receipts comply with CRA requirements. This is especially important if your fiscal year-end aligns with the calendar year.

Once this task is completed, it is time to verify grants and funds.

  • Restricted Funds: Verify that restricted funds are used according to donor stipulations.
  • Grant Reporting: Prepare necessary reports for grant providers.
  • Issue Donation Receipts: Ensure receipts comply with CRA requirements.

Meeting these funder and donor expectations is critical for maintaining trust and future funding opportunities.

5. Prepare for Year-End Reporting & Audits

Organizing your financial data for year-end reporting is essential for both internal stakeholders and external audits.

First, prepare key reports, including:

  • Statement of Financial Position (Balance Sheet)
  • Statement of Activities (Income Statement)
  • Fund Allocation Reports (for donors or grants)

Then, confirm that all funder-specific reporting requirements have been met. Ensuring your financial records are accurate and well-documented simplifies audit preparation and builds trust with stakeholders.

Learn more about the key differences between an audit and a review engagement.

6. Coordinate with Your Auditor to Confirm the Audit Plan and Timeline

If your organization is subject to an audit, you will need to meet with your auditor to establish a plan that outlines:

  • Required documentation
  • Timelines for submission
  • Roles and responsibilities during the audit

Your organization’s level of engagement will vary depending on your provincial legislation.

Pro Tip: You can give your auditor direct access to QuickBooks Online to eliminate the need for manual file sharing and streamline communication.

7. Share the Draft Audited Financials with Your Leadership Team and Board


Once your audit is complete and all adjustments have been made, you will have a set of draft audited financial statements (i.e., Balance Sheet and Income Statement).

Share these with your board for review and approval.

8. Prepare Financial Summaries for the Annual Report

If your organization prepares an annual report for your stakeholders, your audited financials (e.g. your financial statements, budget, and cash flow forecast) can also be used to create financial summaries for your annual report. 

This step helps communicate your nonprofit’s financial performance to stakeholders and builds transparency.

10. Set New Budgeting Goals for the Year

Year-end reports offer valuable insights into your nonprofit’s performance. Use this data to:

  • Review last year’s performance to inform new program and operational goals.
  • Establish new program and operational goals.
  • Use financial metrics (e.g., operating reserve ratio) to prioritize spending and diversify revenue.
  • Align spending with key metrics like operating reserve ratio or revenue diversity.
  • Create a realistic budget that supports your mission and long-term sustainability.

11. File Necessary Returns and Ensure Compliance

Even though charities and non-profit organizations are exempt from paying income tax, they still fall under Canada's federal Income Tax Act and must stay on top of their filing requirements to maintain compliance.

Make sure you:

  • File T4s and T4As with the CRA by February 28.
  • Ensure payroll taxes have been accurately remitted to avoid penalties.

Learn more about Not-for-Profit Tax Requirements in Canada.

12. Switch Nonprofit Bookkeeping Providers

Q1 offers nonprofits with a March 31 fiscal year-end the perfect opportunity to transition bookkeeping providers.

Why Q1?

  • Minimize Disruption: Switching providers before your fiscal year-end ensures that you can get things cleaned up before the books before the year-end process starts.
  • Start Fresh: A new bookkeeping partner can clean up your books and address any lingering financial challenges.
  • Streamline Processes: Enkel’s bookkeeping services help nonprofits optimize workflows and ensure compliance.

Learn more about Enkel’s bookkeeping services for nonprofits.

It all starts with accurate books

Closing out your nonprofit’s fiscal year is an opportunity to strengthen your organization’s financial foundation. By following this checklist, you’ll not only stay compliant with reporting requirements but also set your nonprofit up for a successful year ahead.

At Enkel, we specialize in helping Canadian nonprofits streamline their financial operations with bookkeeping for nonprofits, organized financial records, and tools that simplify audits and reporting. 

Our bookkeeping services start at just $500/month, giving you access to:

  • No More Compliance Headaches – Stay audit-ready and funder-compliant.
  • Clarity for Your Board & Funders – Get financial reports that make sense.
  • More Time for Your Mission – We handle the numbers, you focus on impact.
  • Seamless Year-End Process – Close your books without the usual stress.
  • Experts in NPO Accounting – Our team knows your unique requirements.

Let's make your year-end (and your 2025) stress-free this year.

Book a free consultation with our team to learn how Enkel can help your nonprofit stay compliant and financially strong.

Need some help with your nonprofit bookkeeping?

Book a free consultation and learn how Enkel can support your organization this year.

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