How to Prepare Your Bank Statements for Your Accountant (Canada & U.S. Sole Proprietor Guide)

Whether you're a freelancer, consultant, online seller, contractor, real estate agent, or another self-employed business owner, your accountant can only work with the information you provide.

One of the biggest causes of delayed tax returns, higher accounting and bookkeeping fees, and inaccurate financial statements is incomplete or poorly organized bank records.

The good news? Preparing your bank statements properly is much easier than most people think.

This guide explains exactly what your accountant needs, how to prepare your records, and how AI tools like Heightly can dramatically reduce the time and cost of preparing your year-end taxes.

Why your bank statements matter

For most sole proprietors, bank and credit card statements tell the story of the business.

They show:

• Income received
• Business purchases
• Software subscriptions
• Vehicle expenses
• Office expenses
• Advertising
• Contractor payments
• Travel
• Meals
• Equipment purchases

Many accountants begin their bookkeeping from these statements. If statements are missing — or transactions can't be identified — it creates extra work, more questions, and often higher accounting and bookkeeping fees.

Step 1: Download every statement

Don't just send your accountant or tax preparer a few PDFs. Gather every monthly statement covering your tax year.

Include:

• Business bank accounts
• Personal accounts used for business
• Business credit cards
• Personal credit cards used for business
• Digital banking accounts (Wise, Revolut, EQ Bank, etc.)

Missing even one month often means missing income or deductible expenses.

Step 2: Export CSV files (if available)

Many banks allow you to export transactions as CSV files. CSV files are far easier to work with than PDFs because they contain transaction data that software can read automatically.

Most accountants prefer:

• CSV exports
• PDF statements (if exports aren't available)
• OFX/QBO files (generally provide only if requested)

Heightly supports both PDF statements and CSV exports.

Step 3: Keep personal and business separate

Mixing personal and business transactions is one of the most common problems for sole proprietors.

If possible:

• Use a dedicated business bank account.
• Use a dedicated business credit card.
• Avoid paying personal expenses from business accounts.

If you do have mixed transactions, don't panic. Just be prepared to identify which expenses relate to the business.

Step 4: Identify unusual transactions

Your accountant won't recognize every transaction. For example:

• "SQ *ABC123"
• "PAYPAL *45894"
• "POS 000948"
• "Transfer"

These descriptions often don't explain what was purchased. Helpful notes include:

• Office chair
• Facebook Ads
• Client lunch
• Fuel for work vehicle
• Website hosting
• Business insurance

Even a few words can save your accountant from sending follow-up emails.

Step 5: Gather receipts (when required)

Bank statements prove that money left your account. They don't always prove what was purchased.

Depending on your country and tax rules, receipts may be needed for:

• Sales tax claims (GST/HST or state tax documentation where applicable)
• Capital assets
• Travel
• Meals
• Vehicle expenses
• Equipment
• Home office purchases

Step 6: Separate business income

Many sole proprietors receive payments from multiple sources. Examples include:

• Stripe
• Square
• PayPal
• Etsy
• Shopify
• Amazon
• Upwork
• Fiverr
• Direct bank deposits
• E-transfers (Canada)
• ACH payments (United States)

If your deposits include refunds, transfers, or personal money, make sure these are identified. Otherwise your accountant may incorrectly classify them as business income.

Step 7: Include credit cards

Many deductible business expenses never appear on your bank statements because they were paid by credit card. Examples include:

• Software subscriptions
• Online advertising
• Cloud storage
• Office supplies
• Internet services
• Travel bookings

Always provide both bank and credit card statements for the same period.

Step 8: Don't rename files randomly

Instead of filenames like:

• Statement.pdf
• January.pdf
• Scan1.pdf

Use descriptive names:

• TD Business Chequing Jan 2025.pdf
• RBC Visa March 2025.pdf
• Chase Business Checking July 2025.pdf

Organized files make everyone's job easier.

Common mistakes that slow down tax preparation

Many accountants spend hours chasing missing information because of avoidable issues. The biggest mistakes include:

• Missing months of statements
• Sending screenshots instead of statements
• Providing only year-end balances
• Forgetting credit cards
• Missing online payment processors
• Mixing personal and business spending
• Missing explanations for unusual transactions
• Sending password-protected files without the password

Avoiding these issues can significantly reduce bookkeeping time.

How Heightly makes this process easier for unincorporated sole proprietors

Instead of manually reviewing hundreds or thousands of transactions, Heightly uses AI to organize your bank and credit card statements into accountant-ready reports for your personal tax filing (Schedule C in the U.S. and the T2125 in Canada). The product is meant for unincorporated sole proprietors wanting AI-supported bookkeeping for tax preparation without a monthly fee.

Simply upload your statements.

Heightly automatically:

• Reads PDF and CSV bank statements
• Identifies income and expenses
• Suggests categories for transactions
• Flags transactions that need your review
• Produces an organized income statement
• Creates a detailed transaction listing
• Estimates GST/HST summaries for Canadian sole proprietors when applicable
• Generates Excel and PDF reports that can be shared with your accountant

Unlike fully automated bookkeeping software, Heightly keeps you involved where human judgment matters. Transactions that are unclear are flagged for review rather than guessed, helping improve accuracy before your accountant sees the data.

The result is faster bookkeeping, fewer questions, and lower preparation costs.

Frequently asked questions

Can I send only my bank statements?

Sometimes, but most businesses also have credit card expenses. Providing both gives your accountant a more complete picture.

What if I used my personal bank account?

That's common for new businesses. Just identify which transactions relate to your business.

Should I send PDFs or CSV files?

If available, send both. CSV files are easier to process, while PDFs provide an official record.

Does Heightly replace my accountant?

No. Heightly helps organize your financial data before it reaches your accountant. Your accountant still reviews the information, makes tax adjustments where needed, and prepares your tax filings.

Does Heightly work in Canada and the United States?

Yes. Heightly supports sole proprietors in both countries by organizing bank and credit card transactions into accountant-ready reports.

Get accountant-ready faster

Preparing your bank statements doesn't have to take days.

Whether you're filing a Canadian T2125 or a U.S. Schedule C, having organized financial records saves time, reduces stress, and helps your accountant prepare a more accurate return.

If you want to skip hours of manual categorization, try Heightly. Upload your statements, review any transactions that need clarification, and generate organized reports ready for your accountant.