The monthly bookkeeping checklist for Canadian charities and NPOs

A monthly bookkeeping close for a Canadian charity or not-for-profit is a fixed sequence of steps you run in the same order every period: reconcile the accounts, clear anything held in transit, record the money that came in, post payroll and confirm remittances, check that costs landed in the right fund and program, verify restricted balances, then build the board package. The value is in the repetition. When the same routine runs each month, nothing accumulates into a year-end surprise, and the audit trail stays intact.

This page is the operational how-to. For the underlying concepts — what fund accounting is, and how ASNPO presents restricted resources — see the pillar on fund accounting for Canadian charities.

The month-end close checklist

Work through these in order. Each step assumes the one before it is done, because a reconciliation you run before all the transactions are entered will not hold.

#	Step	What “done” looks like
1	Import and code all transactions	Every bank and credit-card transaction for the period is entered and coded to an account, fund, and program
2	Reconcile bank accounts	Each bank account reconciles to the statement with no unexplained differences
3	Reconcile credit-card accounts	Each card statement is reconciled and receipts are attached or filed
4	Clear clearing and suspense accounts	Payment-processor, payroll, and suspense clearing accounts net to a known balance
5	Record donations and grants received	Gifts and grant instalments received in the period are recorded and reconciled to the CRM or funder schedule
6	Post payroll and confirm remittances	Payroll is booked and source-deduction remittances for the period are confirmed as filed and paid
7	Review fund and program allocations	Revenue and expenses sit in the correct fund and program; shared costs are allocated
8	Verify restricted-fund balances	Each restricted balance ties to its contributions, spending, and agreement
9	Post accruals and adjustments	Known unrecorded expenses, prepaids, and amortization are accrued
10	Prepare the board package	Statements, budget-vs-actual, and fund balances are drafted and reviewed
11	File the documentation	Reconciliations, statements, and support are saved for the audit trail

Reconciliations come first

Nothing downstream is reliable until cash is reconciled. Reconcile every bank account to its statement, then every credit-card account. A reconciliation that leaves an unexplained difference is not finished — the difference is a signal, usually a missing transaction, a duplicate, or a timing gap, and it is far cheaper to trace this month than next year.

Attach or file the supporting receipt for each card transaction as you reconcile. This is the point in the routine where the audit trail is either built or lost, and the CRA’s books-and-records expectations apply year-round, not only at filing time.

Clear the clearing accounts

Clearing accounts hold money in transit: donations a platform has collected but not yet paid out, payroll sitting between the pay run and the bank withdrawal, or amounts parked in a suspense account because the correct coding was not yet known. At month-end, each of these should net to a known, explainable balance — ideally zero.

A clearing account that grows every month is a warning sign. It usually means one side of a transaction is being recorded and the other is not, which quietly overstates or understates both cash and revenue.

Record donations and grants received

Record the gifts and grant instalments that were actually received in the period, and reconcile them against the donor CRM or the funder’s payment schedule. Reconciling monthly catches missing gifts, duplicates, and payout-timing differences while they are still easy to trace.

This step is about the bookkeeping mechanics of recording money received — not about receipting rules or the tax treatment of gifts. What matters here is that each amount is coded to the right revenue account and the right fund. A grant restricted to a specific program is recorded so its restriction is visible; a general donation is not. If the restricted-versus-unrestricted distinction is unfamiliar, the restricted vs unrestricted funds explainer covers it.

Post payroll and confirm remittances

Book the payroll for the period — gross pay, the employer’s share, and the withholdings. Then confirm that the required source-deduction remittances for the period were filed and paid. The bookkeeping job at month-end is to confirm the remittance happened and that the payable and cash movements are recorded, not to calculate rates or advise on payroll tax. Note the remittance obligation exists, tie it to the supporting records, and flag anything outstanding.

Review fund and program allocations

With transactions entered, step back and check where they landed. Every revenue and expense line should sit in the correct fund and, where you track programs, the correct program. Shared costs — rent, software, administrative time — are allocated according to your documented method so that program results are not distorted.

This review is what makes program-level and fund-level reporting trustworthy. Getting it right depends heavily on how the ledger is structured; a well-built chart of accounts makes this a review step rather than a monthly cleanup.

Verify restricted-fund balances

For each restricted fund, confirm the balance still ties to its contributions, its spending, and the underlying agreement. A restricted balance that no longer reconciles to the grant it came from is the kind of problem that is small this month and serious at audit. This is the check that lets the treasurer and board state, with support, how much of the organization’s money is actually available versus committed.

Prepare the board package

The close ends with reporting. Draft the statement of financial position with fund segmentation, the statement of operations against budget, and the restricted-fund movement for the period, then review them before they go out. The treasurer relies on this package to carry out their financial-oversight responsibilities, so it needs to be consistent month to month and reconciled to the ledger it came from.

File the documentation

Save the month’s reconciliations, statements, and supporting documents in a consistent place. A close that is done but not documented leaves the organization exposed at audit and dependent on whoever ran it. Consistent filing is what turns twelve monthly closes into a clean year-end file.

Running this routine every month is exactly what an outsourced charity bookkeeping engagement is built to deliver: the same sequence, on the same schedule, with the reconciliations and audit trail maintained throughout the year rather than reconstructed at year-end.