A consistent monthly bookkeeping routine prevents the tax-season scramble and ensures you capture every deductible expense. Here is a complete checklist for Canadian freelancers organized by task type — plan to spend 45–60 minutes on this once per month.
Income: Record and Reconcile
- ☐ Issue any outstanding invoices for work completed during the month
- ☐ Record all client payments received in your accounting software, matched to the corresponding invoice
- ☐ Follow up on any overdue invoices — send a reminder on Day 1 after the due date, Day 7, and Day 14
- ☐ Convert any USD payments to CAD using the Bank of Canada exchange rate on the date received; record the CAD equivalent
- ☐ Confirm your year-to-date revenue total against the $30,000 GST/HST registration threshold
Expenses: Capture and Categorize
- ☐ Photograph and upload all paper receipts from the month — do not let them accumulate
- ☐ Check your email “Business Receipts” folder for software renewal notices and subscription invoices
- ☐ Review your bank and credit card statements for any business charges not yet recorded
- ☐ Categorize all transactions into T2125-aligned expense categories (advertising, office expenses, professional fees, etc.)
- ☐ Record the business-use percentage for mixed-use expenses (phone: 60%, internet: 50%, vehicle: your logbook %)
Bank Reconciliation
- ☐ Compare your accounting software balance to your bank statement end balance — they should match
- ☐ Investigate any differences — usually missing bank fees, outstanding cheques, or an unrecorded transaction
- ☐ Clear reconciled transactions in your accounting software
- ☐ Reconcile your business credit card separately if you use one
GST/HST (If Registered)
- ☐ Verify all Canadian client invoices include the correct HST/GST rate for the client’s province
- ☐ Confirm international client invoices show 0% (zero-rated export)
- ☐ Transfer collected GST/HST to a separate savings account if you have not done so (monthly transfer prevents accidental spending of tax funds)
- ☐ For quarterly filers: if this is the final month of a quarter, generate your GST/HST report and prepare to file by month-end
Vehicle (If Claiming Vehicle Expenses)
- ☐ Update your mileage logbook with any business trips made during the month
- ☐ Note month-end odometer reading if you track km monthly rather than trip-by-trip
Tax Savings
- ☐ Transfer 25–30% of net client revenue to your dedicated tax savings account
- ☐ Check instalment due dates — if March 15, June 15, September 15, or December 15 is approaching, confirm payment is scheduled
End-of-Month Review
- ☐ Run a profit and loss report for the month and year-to-date — review for anomalies
- ☐ Back up your accounting data — export to cloud storage if your software does not back up automatically
- ☐ Note any unusual transactions to discuss with your accountant at year-end
Frequently Asked Questions
How long should this checklist take?
For a typical sole proprietor with 10–15 invoices and 25–40 expense transactions per month, this takes 45–60 minutes with accounting software that has bank feeds. The biggest variable is how many transactions need manual categorization — the first time you do a given vendor, you categorize it manually; subsequently, accounting software applies rules and it becomes almost automatic.
What if I miss a month?
Catch up the missing month as soon as possible — do not let gaps accumulate. If you are three months behind, block three 2-hour sessions on your calendar and work through each month chronologically. The longer you wait, the harder reconstruction becomes (receipts fade, memory fades, statements expire from online banking portals).
Do I need to do this monthly or can I do it quarterly?
Monthly is strongly recommended. Quarterly reconciliation means larger backlogs when you sit down, harder reconstruction of receipts and categorizations from memory, and a delayed view of your financial position. Monthly takes less total time than quarterly because each session is shorter and fresher.