Year-end closing is one of the most important financial processes Canadian businesses handle each year. It’s your opportunity to finalize your books, correct errors, comply with CRA guidelines, and prepare your organisation for a fresh start in the new fiscal period. But without a structured checklist, the year-end rush can quickly lead to mistakes, compliance risks, or delays in reporting.

This blog provides a practical, step-by-step Sage year-end closing checklist that ensures accuracy, compliance, and efficiency. Whether you're a CFO, controller, bookkeeper, or finance manager, this is your roadmap to a clean and well-prepared year-end close.

What’s shaping the 2025 year-end

Before diving into the checklist, it helps to highlight a few macro- and micro-trends shaping how Canadian businesses do payroll today.

• Economic pressure and the need for agility:
  Canadian businesses are operating in a volatile environment: rising costs, labour-market pressures, inflation, and regulatory complexity demand greater flexibility in financial planning.
• Automation and integrated systems rising for mid-sized firms:
  What once was only feasible for large enterprises is now within reach of mid-sized Canadian businesses. Cloud-native Sage solutions (Sage Intacct, Sage 300 cloud-hosted, HIRS) make it easier to automate payroll, financials, and HR workflows, reducing manual overhead, errors, and compliance risk.
• Demand for data-driven decision making, not just compliance:
  Firms are increasingly embracing business intelligence and real-time financial reporting to navigate uncertainty, rather than simply closing books once a year. Accordingly, BI dashboards and integrated ERP systems are central to this shift.
• Payroll compliance remains complex and dynamic – The 2025 edition of the Sage payroll guidance underscores the challenges around deadlines, province-specific rules, multi-jurisdiction payroll, remote work, and evolving federal/provincial requirements.

Given this context, the year-end closing process presents not only administrative necessity but also strategic opportunity. It positions your organization for smoother operations, better compliance, and a stronger foundation for growth in the coming year.

Sage-Focused Year-End Closing Checklist

Here’s a comprehensive checklist tailored for Canadian businesses using Sage solutions, designed to be practical, actionable, and forward-looking:

1. Map Your Payroll & Compliance Obligations

• Confirm federal and provincial/territorial payroll obligations (tax slips, remittances, ROEs, e-filings, year-end forms).
• Maintain a master compliance calendar, client (or company) by jurisdiction, with form type, submission method (paper vs e-file), due date, and owner/backup.
• For multi-jurisdiction or remote workers, document location, province of employment rules, and any special conditions (e.g., tax or filing differences).

2. Reconcile Payroll Totals Before Final Pay Run

• Run a comprehensive reconciliation of wages, taxable earnings, taxable benefits, pensionable/insurable earnings, deductions (CPP, EI), and any year-end adjustments.
• Set clear variance tolerances and approval thresholds; have a dedicated review process (ideally by someone other than the person running the payroll) to catch anomalies.
• Document all adjustments so there’s an audit trail for any corrections or reprints that may be required.

3. Lock in Your Filings Plan & Submission Method

• Decide whether you (or your firm) will e-file or submit paper forms for T4s, RL-1s (if relevant), ROEs, and other year-end filings. Record who will prepare, who will review, who will submit, and when.
• Use a RACI (Responsible, Accountable, Consulted, Informed) matrix, especially useful in larger teams or firms managing multiple clients.
  
  

4. Prepare Employee / Client Communications

• Draft and schedule communications for T4/RL-1 distribution, year-end changes, or upcoming adjustments. For Québec employees or clients, ensure bilingual (English/French) where needed.
• Define a reprint/drop-mail protocol (especially useful if employees don’t pick up T4s or if there are distribution issues at scale).
• Keep a log of communication timing, channel (mail, email, portal), and confirmations, useful both for client service and compliance records.
  
  

5. Roll Forward & Archive for Q1 / Next Fiscal Year

• Archive payroll records, set data-retention periods, and ensure secure storage or appropriate backups (especially with cloud-hosted Sage solutions).
• Update calendars and recurring payroll settings (pay schedules, benefit deductions, contribution rates). If using Sage Cloud Payroll (or Sage Intacct), ensure carry-over settings are validated, and reminder workflows activated.
• Conduct a short debrief: Capture lessons learned, areas of improvement, identified risks then update your process documentation for next year.

6. Leverage Automation and Integrated Tools

• Consider using cloud-based Sage solutions (Sage Intacct, or Sage 300 cloud-hosted) to automate repetitive tasks: payroll runs, remittances, reporting, tax slip generation, record-keeping. It is noticeable automation is increasingly accessible for mid-sized firms.
• Where possible, integrate payroll with accounting, BI, and HR modules, providing unified data, real time visibility, and reducing manual reconciliation between systems. This supports better decision-making, simplifies compliance, and reduces risk of manual error.

Plan for Year-End Risks & Pitfalls

1. Based on common issues observed in 2025:

• Missed deadlines: Especially when dealing with multi-jurisdiction, remote workers, or concurrent clients/projects. Use your master calendar and automated reminders to avoid slips.
• Incomplete or inaccurate reconciliations: Which can lead to amendments, CRA notices, or unhappy clients. A dedicated reconciliation pass and variance-log help mitigate this.
• Overlooking remote/multi-province employees: As many Canadian businesses continue to work in a hybrid or fully remote setting, ensuring provincial tax and compliance alignment is critical.

2. Use Year-End as a Strategic Moment, Not Just a Compliance Chore

• Review your current payroll/financial software solution setup: does it still meet your business’s scale, complexity, and growth plans?
• Upgrading to cloud-based ERP/payroll plus BI may deliver long-term operational savings, improved compliance, and better strategic insight.

Read more: Leveraging Business Intelligence Tools to Drive Growth in Canadian SMEs.

• Align payroll data with broader financial planning, cash-flow projections, and budget forecasting for the coming year, enabling agility in uncertain economic conditions.

Read more: Building Resilience in Canadian Business Amid Economic Uncertainty:

Why This Checklist Matters:

From a standards and education standpoint, the year-end period is a moment of risk and opportunity:

• Risk: Without a structured, documented approach, companies may miss deadlines, submit inaccurate filings, or fail to comply with provincial/federal differences (especially for remote or multi-jurisdiction employees).
• Opportunity: A clean, efficient year-end close, especially when combined with automation and integrated systems, elevates payroll from a purely administrative function to a strategic asset. It supports better financial planning, compliance oversight, and positions the business to respond rapidly to changing conditions.

Moreover, with growing complexity in Canadian payroll (varying provincial regulations, evolving tax thresholds, remote-work compliance), there’s an ever-greater need for professional standards and consistent education. By adopting a robust checklist like this and training staff accordingly, organizations can ensure consistency, reliability, and resilience.

Read more: Year-End Close: How Financial Automation Can Save Time & Improve Accuracy

Recommendations for Canadian Businesses Using Sage

1. Adopt the checklist above, embed it into your annual year-end routine, and treat it as a governance requirement, not optional.
2. If you are still using on-premises or legacy payroll systems, consider transitioning to cloud-based Sage solutions such as Sage Intacct, or cloud-hosted Sage 300. This will help you leverage automation, reduce manual workloads, and ensure compliance.
3. Combine payroll data with broader financial planning and forecasting tools (e.g., BI dashboards, cash flow forecasting) to increase strategic visibility.
4. Documentation and training ensure that multiple people understand the “owner/backup” roles, reconciliation process, communication protocol, record-keeping and archiving to avoid single-point failures.
5. Regularly review and update as laws, thresholds, and regulations change (or if your workforce distribution changes), update your compliance calendar and process documentation.

Conclusion

A well-organized year-end closing process ensures your business enters the new year prepared, compliant, and financially confident. With tailored Sage solution, Canadian businesses can streamline their year-end tasks and focus on growth rather than paperwork. Book a free consultation with a BAASS expert today and enable your team with the clarity and support needed for a flawless year-end close.