Mid-Year Bookkeeping Check-Up: 7 Things Every Small Business Owner Should Review in May

May is the quietest month in the small business tax calendar. Personal returns are filed. T4s and T4As are out the door. The rush is over – and for most owners, the books promptly get pushed back to the bottom of the to-do list.

That is a missed opportunity. The next five months are when you can actually fix things that go wrong, not just discover them at year-end. A 90-minute mid-year check-up in May saves owners hours of cleanup work in January, often catches HST surprises before they grow, and gives you real numbers to make decisions on for the rest of the year.

Here are the seven things every Canadian small business owner should review right now.

1. Reconcile every bank and credit card account

Open your accounting software and confirm that every business bank account, credit card, and line of credit has been reconciled through April 30. If reconciliations are behind, that is the single biggest red flag in any set of books. Unreconciled accounts mean transactions are missing, duplicated, or sitting in the wrong place – and every report you pull is unreliable until they are fixed.

If you are more than two months behind, do not try to catch up everything in one sitting. Reconcile one month at a time and stop when something does not tie out so you can investigate.

2. Clean up your accounts receivable

Pull an A/R aging report and look at anything over 60 days old. These are invoices customers have not paid – and the longer they sit, the less likely they are to ever land in your bank account.

Two things to do this week:

Send reminder emails on every invoice over 30 days old. A polite “just checking in” message recovers a surprising amount of money.
Decide which old invoices need to be written off. Carrying uncollectible invoices on your books inflates your revenue and leaves you paying tax on money you will never receive.

3. Review and re-categorize expenses

Every business has a “miscellaneous” or “uncategorized” account that quietly fills up with transactions over the year. If yours has more than a handful of items, sort through them now while you still remember what they were.

Pay particular attention to:

Personal expenses accidentally run through the business account.
Big-ticket purchases that should be capitalized as assets, not expensed.
Subscriptions and software that may have been double-counted.
Anything tagged “ask my accountant” – this is the time to actually ask.

4. Check your HST/GST account balance

Open your HST/GST liability account and look at the balance. Does it match what you actually owe based on your sales for the year so far?

This is one of the most common bookkeeping problems we see. HST collected gets recorded incorrectly, input tax credits get missed, or filings do not match what is in the books. If the number looks suspicious – or if you cannot tell whether it looks suspicious – flag it now. A quarterly mismatch is a small fix; a year-end mismatch is an audit risk.

5. Compare cash flow against your forecast

If you set a budget or revenue target at the start of the year, pull it out and compare it to your actuals through April. You do not need a fancy spreadsheet – even an honest line-by-line comparison tells you a lot.

The questions to ask yourself:

Are we tracking ahead, behind, or right on plan?
If we are behind, is it a revenue problem or a cost problem?
What needs to change in the next two quarters to land where I want to land?

If you did not set a forecast in January, build a quick one now for the rest of the year. Even a rough version is better than running blind for another seven months.

6. Update your books for new business activity

Has anything changed in your business since January that your books need to reflect? Common items owners forget:

Bought a vehicle, computer, or equipment that needs to be set up as an asset.
Started paying a new subcontractor (and may need to issue a T4A in January).
Hired your first employee (which means a payroll account, source deductions, and WSIB).
Moved to a new business location with different overhead costs.
Started selling in another province (which can affect HST).

These are the changes that quietly create year-end nightmares because they were not recorded properly in real time. Catching them in May is easy. Catching them in February is expensive.

7. Look ahead to your next CRA deadline

The next major deadline on the calendar for self-employed Canadians is June 15 – the personal tax filing deadline if you or your spouse have self-employment income. The next quarterly tax instalment is also due June 15. If you are incorporated, your corporate instalment schedule depends on your fiscal year, but most calendar-year corporations have an instalment payment coming up.

Do not let these sneak up on you. Note the date on your calendar today and confirm you have the cash on hand to cover it.

Your mid-year check-up checklist

Print this out and work through it over an afternoon:

All bank, credit card, and loan accounts reconciled through April 30.
A/R aging reviewed; reminders sent on overdue invoices.
“Miscellaneous” and “uncategorized” expenses cleaned up.
HST/GST balance reviewed and reasonable.
Year-to-date results compared against budget or goals.
Major business changes (assets, hires, contractors, locations) properly recorded.
Next CRA deadline noted with cash set aside.

When to bring in help

If working through this checklist surfaces problems that feel bigger than a quick afternoon fix – accounts that have not been reconciled in months, an HST balance you cannot explain, or a backlog of receipts you have not categorized – that is the signal to bring in a bookkeeper before year-end, not after.

At AccountingOne we offer a free 30-minute mid-year review where we will look at your books with you, flag anything urgent, and give you a clear plan for the rest of 2026. Book your free review and start the second half of the year on solid footing.

A few hours in May. A much smoother year-end. That is the trade.