The Small Business Owner's Guide to Preparing for the Fourth Quarter
The final three months of the year can arrive quickly.
One minute, summer is wrapping up. The next, you are managing the chaos of approaching year-end, plus holiday schedules, customer deadlines, payroll changes and plans for the new year.
September is an ideal time to prepare. There is still enough time to correct bookkeeping problems, improve cash flow and make thoughtful business decisions before the pressure of year-end begins.
Here are eight areas Canadian small-business owners should review before entering the fourth quarter.
1. Bring Your Bookkeeping Up to Date
Good planning starts with current, accurate information.
Make sure your bank and credit card accounts have been reconciled through to the end of August or September. Upload missing receipts, get details on uncategorized transactions and provide your bookkeeper with any loan, financing or equipment purchase documents they may need.
Bank feeds are helpful, but they aren't overly reliable. They cut out way more often than they should, and sometimes they do wonky things (especially bringing in duplicate transactions).
And a bank feed transaction only tells so much. For example, your bookkeeper may be able to see that a payment was made to a car dealership, but not know whether it was for auto repairs, a down payment on new equipment, a lease payment or simply a personal expense. Providing the supporting information helps ensure your financial reports are accurate.
If your books are several months behind, start catching up now. Waiting until December or tax season gives you less time to use the information to improve the current year.
2. Review Your Accounts Receivable
Sales do not help your cash flow until your customers pay you.
Run an Accounts Receivable Ageing Summary and look closely at invoices that are more than 30, 60 or 90 days old. Confirm that the invoices were sent to the correct person, check whether the customer raised a question and follow up on overdue balances.
This is also a good time to review your invoicing process. Sending invoices promptly, offering convenient payment options and establishing clear payment terms can shorten the time between completing the work and receiving the money.
Do not wait until the holiday season to chase invoices that are already overdue in September.
3. Look at What Your Business Owes
Next, review your accounts payable and upcoming obligations.
Your current bank balance may look healthy, but part of that money may already be owed for upcoming expenses such as:
supplier bills
credit cards
payroll remittances/EHT
GST/HST returns
income tax instalments
loan payments
Reviewing these amounts together gives you a more realistic understanding of the cash available to operate the business. It can also help you avoid using tax money or payroll deductions to cover everyday expenses.
4. Prepare a Cash Flow Forecast
A cash flow forecast estimates when money will enter and leave the business. It does not need to be complicated to be useful.
We highly encourage you to read our blog post on creating one easily in QuickBooks Online.
It's important to estimate the income you reasonably expect to collect during October, November and December. Then consider any additional fourth-quarter costs you may not have though about, including those outlined above in #3 and:
Seasonal inventory or materials
Equipment purchases
Holiday bonuses or staff events
Business closures or reduced operating hours
Be realistic about which customers will actually pay, and when. An invoice issued in December may not become cash until January or later. Don't send your bills too late.
If your forecast shows a shortage, you still have time to respond before year-end. You might follow up on receivables, reduce unnecessary spending, delay a purchase or discuss financing before the money is urgently needed.
5. Compare Your Results With Last Year
Review your Profit and Loss report for January through September and use QuickBooks Online's Compare feature to see how your numbers stack up against the same period last year.
Look beyond total sales. Ask:
Has revenue increased or decreased?
Which expenses have changed the most? (Compare using % here)
Are gross profit (Income - COGS) and net profit (Income - All Expenses) improving?
Are certain products or services becoming less profitable?
Have price increases kept pace with higher costs?
Statistics Canada's second-quarter 2026 analysis found that 64% of businesses with 1 to 19 employees expected at least one cost-related obstacle. Rising inflation, transportation costs, insurance and debt costs were among the concerns.
Those increases can reduce profit even when sales remain strong. Reviewing your year-to-date results gives you time to adjust pricing, purchasing or spending before another quarter passes. Check out our blog post for 5 Ways to Restore Profitability in your business.
6. Review Payroll Before the Holiday Season
The fourth quarter often brings big payroll changes. Employees may request vacation, work on public holidays (there are 4 coming up!), receive bonuses or have different schedules because of seasonal demand.
Review your anticipated payroll dates and holiday closures now. Make sure you understand how public holiday pay applies to your employees and leave enough time to process payroll around bank holidays. Run the numbers on the bonuses you expect to pay out this year.
It is also worth confirming that employee names, emails, phone numbers, addresses, SINs and other payroll information are current. Correcting missing information now will make T4 prep easier after year-end.
Make sure employees have signed off on all new company policies and employement contracts are updated and filed away.
7. Plan Necessary Year-End Purchases Carefully
Business owners are often told to spend money before year-end to reduce taxes. That advice can be misleading.
A tax deduction only offsets part of an expense. Spending $1,000 solely to receive a deduction does not put the full $1,000 back in your pocket. Purchases should first make sense for the business.
If you genuinely need equipment, software or supplies, discuss the timing and tax treatment with your accountant before buying. Some purchases are deducted as current expenses, while longer-term assets may need to be capitalized and claimed over time.
Your cash flow forecast should also show whether the business can comfortably afford the purchase.
8. Decide What Needs Attention Before December
After reviewing your books, create a short action list for the fourth quarter.
Your priorities might include:
Collecting overdue invoices
Reducing an unnecessary recurring expense
Updating prices and advising clients of the change
Setting aside money for tax
Correcting payroll information
Catching up on bank feeds and reconciliations
Preparing a 2027 budget
Keep the list realistic. A few specific actions are more useful than a long list that never gets completed.
Better Information Makes Year-End Easier
Preparing for the fourth quarter is not only about getting ready for year-end and tax season. It is about understanding where your business stands while there is still time to make changes.
Current bookkeeping can show you what customers owe, what the business owes, how much cash you may need and whether your work is producing the profit you expected.
If your books are behind or your financial reports are difficult to understand, Simcoe Office Solutions can help you get organized and enter the final quarter with clearer information.
Contact us to learn more about our bookkeeping, payroll and QuickBooks Online support services.
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