What to take away
- Work one month at a time, oldest first, and reconcile each month before starting the next.
- Keep a holding list for transactions you cannot explain rather than guessing at a category.
- Missing receipts and filing deadlines are separate problems; handle the filings that are due first.
Start by sizing the backlog
Before you record anything, list what you are behind on. Pick the first month with no reconciled books and the most recent month you need current. Then list every account that touched the business in that span: chequing accounts, credit cards, a line of credit, payment processors such as Stripe or Square, and any personal account you used for business purchases.
Write down what each account has and lacks. A statement for every month is the minimum. If a month is missing, request it from the bank or download it from online banking now, because older statements can be harder to retrieve later. Knowing the size of the job also tells you whether you can do it yourself over a few evenings or whether it is worth handing off.
Check what is due before what is old
Catching up the books and meeting filing dates are different tasks, and the second can have penalties attached. If a GST/HST return, a payroll remittance or an income tax return is already overdue, deal with that first, even if the numbers start as a careful estimate that you later correct. Rebuilding the whole backlog first can push those deadlines back further.
If the unfiled items are income tax returns for earlier years, our guide on getting caught up on taxes covers the options in more detail. This article is about the books themselves: the record of income and expenses that every return depends on.
Gather the source documents
The CRA says you are required by law to keep records of all your transactions to support your income and expense claims, and that you generally need to keep them for a minimum of six years from the end of the last tax year they relate to. Income records should show the date, amount and source of each receipt, supported by original documents such as sales invoices, deposit slips and contracts.
For expenses, the CRA describes a receipt that shows the purchase date, the seller’s name and address, your name and address, and a full description of what was bought. For a GST/HST registrant, purchases of $100 or more before tax also call for the supplier’s business number. Gather what you can: emailed receipts, supplier portals, card statements, invoices you issued and loan statements. A bank or card statement proves a payment moved, but it rarely shows what the payment was for, so use it as a second source rather than the only one.
Work one month at a time, oldest first
Open the oldest unfinished month and enter or import its transactions. If your software offers a bank feed, it can bring them in quickly, but each line still needs a decision about what it is. Categorize the clear ones, match each to a receipt where you have one, and move on. Speed matters more than perfection on the first pass.
Resist jumping to the current month. Working in order keeps opening balances sensible, makes it easy to spot a missing statement, and means an error is found while its neighbours are still fresh. Once a month is done, lock it or note it as finished so you do not accidentally change it later.
Reconcile each month before you move on
Reconciliation is the check that makes a catch-up trustworthy. For each account, compare the closing balance in your books with the closing balance on the statement. If they match, the month is complete in the sense that matters most: nothing was missed or entered twice. If they differ, find the gap before starting the next month, since the difference carries forward and grows.
Common causes are a transaction entered twice, a missing deposit, a transfer between your own accounts recorded as income or an expense, and a payment-processor payout recorded at its net amount without the fees. Our bank reconciliation page explains the mechanics, and the month-end close guide shows the full routine to repeat once you are current.
Use a holding list for the unknowns
Some transactions will defeat you: an unfamiliar e-transfer, a large cash withdrawal, a payment to a person you do not recognize. Do not force them into a category. Record them in a suspense or uncategorized account, add a line to a running question list, and keep going. A short list you can take to your accountant is far more useful than a ledger full of confident guesses.
Work through the list in batches. Search your email and calendar for the date, check whether the amount matches an invoice, and ask anyone else who has a card or access to the account. Anything still unexplained after a reasonable effort can be flagged for your accountant to decide how to treat it. Owner transactions deserve extra care: money you put into or took out of the business is not income or an ordinary expense, and the right treatment depends on how the business is set up.
Handle missing receipts honestly
You will not find every receipt. For a lost one, the CRA suggests writing the seller’s name and address, the amount, the date and the details of the transaction in your expense journal. Ask the supplier for a duplicate where you can; most vendors can reissue an invoice. A card statement showing the payee and amount supports that you paid, even though it does not describe the goods.
Be careful with sales tax. A GST/HST registrant needs sufficient documentary evidence before claiming an input tax credit, so an expense without a proper invoice may be deductible for income tax while the credit is not available. For most registrants, a credit missed on an earlier return can generally be claimed on a later one, within four years after the reporting period in which it could first be claimed. Ask your accountant before relying on that for older periods.
Stay current and know when to hand it off
Once you reach the present, protect the work. Set a recurring time each week to categorize, and a monthly time to reconcile. Keep receipts in one folder as they arrive, and keep business spending on business accounts, which is the single habit that most reduces future backlog.
Consider outside help if the backlog covers more than a year, if payroll or GST/HST filings are involved, or if the records are so incomplete that rebuilding them means reconstructing from statements. A bookkeeper can do the first pass quickly and your accountant can review the result. Bring the statements, the receipts you found, your question list and a note on any filings that are overdue.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- Business recordsCanada Revenue Agency
- GST/HST and payroll recordsCanada Revenue Agency
- Input tax creditsCanada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.