Bringing your banking and accounting together at tax time
February 20, 2026 by National Bank
Your financial advisor and accountant both play important, but different roles in your business’s financial success. At tax time, the best outcomes happen when all three of you share information, map out a solid plan, and stay aligned with each other. Whether you’re preparing business statements or filing your personal return, it’s important that everyone is on the same page.
How do you get your accountant and banker aligned prior to filing?
- Open the lines of communication: Your accountant and financial advisor should be able to easily communicate, and a brief meeting once a year will help with that. It allows both professionals to review your financial statements, talk through your business structure, and understand your broader goals. When your accountant and banker are aligned, they can spot issues early and ensure your reporting supports both tax efficiency and a strong banking relationship.
Read this article to learn more about business accounting.
- Clarify the role each advisor plays at tax time: Your accountant’s job is to focus on compliance and tax efficiency, managing the details, and making sure everything is filed correctly. They prepare your personal and corporate tax returns, calculate how much tax you owe, and check that your filings meet CRA requirements. They also maintain historical financial records, prepare your financial statements, and identify deductions or credits that can reduce your tax bill. If questions or audits arise, they act as your first point of contact with the Canada Revenue Agency.
Your financial advisor’s job is to plan for the future. They help manage cash flow so you can meet tax obligations without straining operations. They also monitor loan covenants and financial ratios tied to your credit facilities. They also assess how tax decisions affect your borrowing capacity, financing structure, and liquidity. When RRSP contributions or loans are part of the plan, they ensure – ideally with advance notice – that funding is in place.
- Use preliminary tax filings to spot potential problems: Having your accountant and financial advisor connect before key decisions are finalized is an effective way of making solid decisions. An early review of preliminary tax results helps flag covenant risks prior to returns being filed. Coordinating income structure, intercompany transactions, and year-end planning ensures tax strategies don’t unintentionally limit your access to credit. Working together keeps your tax plan aligned with your broader financial goals.
How can tax strategies impact your financing and covenants?
- Intercompany and shareholder transactions can affect your financing: Even when they make sense from a tax perspective, intercompany and shareholder transactions can create banking issues. Many loan agreements restrict shareholder loan repayments or large dividends without the bank’s consent. From the bank’s viewpoint, this is cash leaving the business, which can weaken debt-servicing ability or affect required financial ratios. In some cases, repaying a shareholder loan can also conflict with subordination agreements that give the bank priority until its loan is repaid.
- Moving quickly can carry risks: CRA rules often require shareholder loans to be repaid within a set window to avoid being taxed as personal income. Acting quickly to meet the deadline can trigger covenant concerns if the bank isn’t informed. The safest approach is to coordinate with your advisors beforehand. If your accountant recommends a shareholder loan repayment or intercompany transfer, involve your banker early to confirm it won’t breach any covenants. In some cases, clearing balances through dividends or bonuses rather than cash repayments can satisfy tax rules while still limiting financial impacts. Planning these steps well before year-end gives you time to align tax efficiency with your banking obligations.
- Tax savings should be balanced with EBITDA strength: Banks rely heavily on a metric called EBITDA – short for earnings before interest, taxes, depreciation, and amortization – to assess your ability to repay debt and remain within covenant limits. When tax strategies significantly reduce your reported profits, they can also weaken the EBITDA figure your lender uses to evaluate your business. Year-end bonuses, large dividends, or shareholder loan repayments may lower your tax bill, but they can make your financial performance look weaker on paper. Even when the underlying business is strong, a lower EBITDA can reduce borrowing capacity or limit access to new credit.
Finding the right balance involves coordination and proper timing. Before finalizing tax decisions, it’s important to understand how they’ll affect key ratios your bank monitors. In strong years, you may have more room to pursue aggressive tax strategies; in leaner years, preserving EBITDA may matter more. Sharing planned compensation, distributions, and growth objectives with both your accountant and financial advisor helps ensure tax savings today don’t restrict financing options tomorrow.
How should you map out your personal and corporate tax decisions?
- Coordinate how your personal income is reported: How you pay yourself affects both your taxes and your access to credit. Salary and dividends are treated very differently, and each have trade-offs. Salary reduces corporate taxable income and creates RRSP contribution room, while dividends are paid from after-tax profits and offer flexibility but less predictability. From a banking perspective, consistent and documented income matters – especially if you’re planning to take on a mortgage or borrow personally. That’s why your accountant and your financial advisor need the same information about how your compensation is structured.
Many business owners use a mix of salary and dividends to balance tax efficiency with borrowing needs. Timing also matters. If a major purchase is coming up, adjusting compensation in advance can make qualification easier. Aligning your personal and corporate income strategy early helps avoid last-minute changes that complicate both your tax filing and financing.
- Use RRSP contributions and RRSP loans strategically: RRSP planning works best when it starts early. A preliminary tax return in January helps determine how much you should contribute and whether an RRSP loan makes sense. If borrowing is part of the plan, your banker needs advance notice. RRSP loans are designed to bridge timing gaps, not to solve last-minute cash shortages just before the contribution deadline.
When structured properly, an RRSP loan can come close to paying itself back – the deduction often generates a refund that can be put back toward the loan, limiting interest costs. Coordination matters here, however, as only salary creates RRSP contribution room. Your compensation mix affects how much you can contribute. Filing early and aligning your RRSP strategy with both your accountant and your financial advisor helps manage cash flow and avoid unnecessary pressure at tax time.
- Share your long-term goals with your accountant: Your accountant can only plan effectively if they understand where you’re headed. Goals such as buying a home, selling your business, or preparing for retirement all affect how income should be structured and when tax strategies should be used. Sharing these plans early allows your accountant to balance short-term tax savings with longer-term financing and growth needs, so current decisions don’t limit your options later.
What steps can you take to stay organized and avoid surprises?
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Start gathering documents immediately after year-end: In early January, begin collecting all the documents your accountant will need, such as year-end financial statements, bank statements, receipts, and loan agreements. Getting this package prepared early gives your accountant time to prepare a preliminary view of your tax position, including what you may owe and whether an RRSP contribution still makes sense.
Stay organized around items that tend to create follow-up questions, including intercompany transfers, shareholder loan activity, and dividend payments. Your accountant needs these details for tax compliance, and your banker may ask for them during covenant reviews or credit updates.
To avoid last-minute scrambling, keep one running file for deductible expenses throughout the year – things such as professional fees, mileage logs, and home office support. Reconstructing records close to filing is stressful and often leads to missed deductions.
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Map out expected cash needs before finalizing the return: Before your return is finalized, understand what your tax bill will look like and how it fits into your cash flow. Knowing whether you owe a modest or significant amount gives you time to plan withdrawals, schedule payments, or adjust decisions while options remain. Reviewing upcoming expenses at the same time helps ensure that paying taxes doesn’t strain your business operations or create avoidable pressure on cash reserves.
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Confirm how tax-driven adjustments will appear in your statements: Before your statements are shared with the bank, ask your accountant how tax-driven decisions will show up on the financials. Year-end bonuses, dividends, or shareholder loan adjustments may reduce taxable income, but they can also affect reported profitability or liquidity. Understanding how timing differences work to avoid confusion during covenant reviews, such as bonuses accrued in one year and paid in the next. Clear explanations up front will allow your bank to assess the numbers in context rather than react to unexplained changes.
Tax season is easier when preparation takes priority over urgency. Keeping your accountant and financial advisor aligned throughout the year helps prevent unwanted surprises, protects your financing, and ensures that the tax strategies in place support your broader goals.
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