Behind on Your Books? We'll Get You Caught Up.

Catch-up bookkeeping means rebuilding your books for any period where they weren't done, were done badly, or just fell behind. Here's how we do it: we pull every bank statement, credit card statement, e-transfer export, and merchant processor report for the full catch-up window. Then we reconcile each account month by month, categorize every transaction with CRA-defensible coding, separate personal draws from business expenses, and rebuild opening balances if the prior year doesn't tie. We produce a clean P&L and balance sheet for each year. Only after that do we move on to backfilling HST returns, T2 corporate returns, and T4/T5 slips. For a typical GTA small business — 12 to 24 months of transactions on two or three accounts — we usually deliver cleaned books within 2 to 6 weeks.

There's no real limit. We routinely take on 3-year catch-ups and have handled files with 5+ years of mixed personal and business on the same bank account. The two practical limits are: (a) the CRA's six-year record retention requirement under section 230 of the Income Tax Act, and (b) how far back your bank lets you pull statements — most Canadian banks give you 7 years online, and beyond that you'll pay for archived copies. CRA will accept backfilled T2 corporate returns for any prior year, and late T1 personal returns for up to 10 years under Taxpayer Relief. The earlier the year, the harder it is to find source documents. So we recommend tackling the full backlog at once rather than one year at a time.

It's serious, but very fixable — we see it all the time. Here's what usually happens: CRA sends a TX11 or TX14 non-filer request, then a demand to file, then an arbitrary assessment where they estimate your income from third-party data (T-slips, HST returns, bank deposits) and bill you based on that guess. If you still don't respond, they move to collection — wage garnishment, bank account freezes, director liability for unpaid HST or payroll. Here's what matters: that arbitrary assessment is almost always way higher than what you actually owe, because it ignores every deduction and credit. Filing the real return — even late — replaces it in most cases. Late-filing penalties (5% of the balance plus 1% per month up to 12 months, doubled for repeat offenders) and interest still apply, but they're based on the corrected balance, not the inflated one. If you're three years behind, the right move is to get the books caught up and file all three years together.

Yes. And HST penalties hit harder than income tax penalties because CRA treats unremitted HST as trust money — it was never yours to keep. If you collected HST from customers and never filed, CRA can assess the full HST owing plus a failure-to-file penalty (1% of the amount plus 0.25% per month, up to 12 months), plus arrears interest. In some cases they'll add a gross negligence penalty of 25% under section 285 of the Excise Tax Act. It gets worse: unremitted HST creates personal director liability under section 323. CRA can pursue you personally for unpaid HST even after the corporation is dissolved. But here's what we see in practice — CRA knows most small businesses fall behind on HST because of cash flow, not intent. They'll accept backfilled returns and work out payment arrangements in most cases. We handle the full HST backfill alongside the catch-up: reconciling sales, calculating ITCs (input tax credits), filing through GST/HST NETFILE, and responding to CRA letters.

It depends on three things: how many months you're behind, how many accounts need reconciling (bank, credit card, merchant processor, e-transfer, loans), and how many transactions hit each month. For a typical Ontario small business — one bank account, one credit card, 100 to 300 transactions per month, 12 to 18 months behind — we quote a flat fee after the intake call. Not hourly. What drives the price up: mixed personal and business spending on the same account (that doubles categorization time), missing receipts that need vendor outreach, multiple years of unfiled HST or T2 returns, and switching software mid-period (like going from Wave to QuickBooks Online). We give you the flat-fee quote after a 30-minute call, and we don't mark it up as we go.

VDP is CRA's amnesty track. It lets you come forward and fix unreported income, unfiled returns, or uncollected HST before they catch you. A successful application can wipe out gross negligence penalties, reduce or kill late-filing penalties, and sometimes cut interest charges in half. The conditions: the disclosure has to be voluntary (CRA can't already be investigating you), complete (every year and every issue, not just the ones you think they'll find), involve a penalty that would otherwise apply, and include payment or a payment plan. There are two tracks — the General Program (full penalty relief, partial interest relief) and the Limited Program (no penalty relief, but protection from prosecution) for intentional conduct or large dollar amounts. But honestly, VDP isn't the right tool for every catch-up file. If you're just behind on filing and the numbers are fine, a regular late-filed return plus a Taxpayer Relief request is usually faster and cheaper. We check VDP eligibility during the intake call and only recommend it when it actually saves you money.