6 Steps to Get Your Business Financially Fit and Ready for 2026

For many business owners, 2025 has been a year of challenges — from higher costs and squeezed profits to uncertainty around tariffs. Taking these steps now can help you close your books with clarity and step confidently into 2026.

Get your business financials in shape to empower smarter decisions

ear-end is the perfect time to get a clear picture of your company’s financial health. Start by gathering your key financial statements — income statement, cash flow statement, and balance sheet and ensure all records are up to date. This includes reconciling your accounts — matching invoices to payments, confirming outstanding receivables, and double-checking expense categories for accuracy — to ensure everything is up to date.

Once everything’s in order, use some tried-and-true financial ratios to benchmark your performance:

Key ratios to know:

Current Ratio

Indicates whether your business has enough cash flow to meet your short-term obligations and act on opportunities. It can also help you avoid cash flow problems before they surface.

How to calculate Current Ratio 

Formula: Current assets ÷ current liabilities

Ideally, your Current Ratio should fall between 1.5 and 2 — a ratio of 1 means you may not have enough money to last the year, while a ratio of more than 2 could mean you’re not investing enough into your business for the future.

Debt Ratio

Shows the percentage of your business’s assets financed by creditors. It’s a ratio a lender will look at before lending money to your business, so it’s wise to know this number before planning the year ahead.

How to calculate Debt Ratio

Formula: Total debt ÷ Total assets

A good Debt Ratio largely depends on your industry, but anything below 0.3 is considered fair. With anything above 0.6, it may be difficult to obtain additional loans.

Gross Profit Margin

Shows you what percentage of your income is profit after paying for the cost of doing business (i.e., labour, materials). Track it over time and benchmark against your goals – or other companies in the same industry.

How to calculate Gross Profit Margin

Formula: (Net sales – cost of goods sold) ÷ net sales x 100%

Debt Service Coverage Ratio (DSCR)

Demonstrates your business’s ability to repay its loans, take on new financing and make dividend payments. Different debt providers may have different numbers they like to see; however, the greater the value over 1.25 (125% coverage), the better.

How to calculate Debt Service Ratio

Formula: Net operating income ÷ total debt service (this is the sum of all current debts, including principal and interest).

To learn more about how you can use debt as an effective tool for managing and growing your business, read our article 6 Steps to Smarter Debt Management: What Business Owners Need to Know

Tip: Gather your bank and loan statements early so you’ll have your documents on hand when you’re ready to review. If you need bank confirmation of account balances, initiate your request as soon as possible, especially if your fiscal year-end is Dec 31st.

Tap into business funding opportunities to unlock new growth

If higher costs and tighter customer budgets have impacted your business this year — and you expect more of the same in 2026 — now is the time to explore government funding and grants. There are several new and expanded programs designed to help Canadian businesses adapt and grow:

• Regional Tariff Response Initiative: Up to $1B in grants and interest-free loans over three years for all affected sectors, including non-repayable grants typically ranging from $100,000 up to $1 million, depending on your region and project eligibility.

• Student Work Placement Program, Canada Summer Jobs and Youth Employment and Skills Strategy: 175,000 placements planned for 2026-2027 with over $1.5B combined funding, providing access to skilled, motivated young workers to help grow your business.

Not sure where to start? Take a look at our guide to grants and funding for businesses that outlines 25+ programs and grants announced in the recent Federal government budget. Or, connect with GrantMatch to find and apply for the right programs.

Get a head start on tax season to save time in 2026

It might not be tax time yet, but planning ahead can save you time and money. Ask your accountant whether you can take steps now to reduce your 2025 tax bill, such as claiming R&D credits, marketing incentives or making eligible purchases before year-end.

And while you’re thinking ahead, make tax season a breeze by organizing your receipts and expense records now. Most accounting software lets you upload digital receipts or automatically sync transactions — no more shoeboxes of paper!

Tip: It’s a good idea to chat with your accountant about possible things you can do in 2025 to minimize your taxes and determine how much income to take out of your business in 2026. A little planning now can go a long way later.

Do a business operations check-in to stay on track

When you’re caught in the day-to-day running of your business, it can be easy for some of the maintenance activities to slip through the cracks. The end of the year is a great time to check that key elements of your business are functioning as they should.  

Take a close look: Are there recurring costs you can trim, such as utilities, subscriptions or inventory storage? Would paying off certain debts reduce interest expenses in 2026? Check out our article 5 Tips to Help Find Hidden Savings and Offset Rising Business Costs for more ideas.

Then, ask yourself some key questions about your business:

• Are there areas of your operations you can streamline for greater efficiency?

• Are there new tools and platforms you can use to help make your business run better?

• Are your internal processes as simple and consistent as they should be?

The RBC Go Digital program includes resources to help businesses navigate changes in the digital environment.

Quick year-end checklist:

• Check that all your software is up to date to protect your business from fraud. Learn how to become cyber-ready.

• Check your marketing channels to ensure your website, social media and Google listing are all up to date.

• Clean up your customer, vendor, and supplier databases for accurate payments and fewer errors or disputes.

• Review your insurance policies to ensure they provide the coverage you need without paying for unnecessary extras.

Reflect on your wins to build confidence and repeat what worked

By the time December rolls around, you may not remember everything that happened earlier in the year. Take some time to review your wins and accomplishments for 2025. By itemizing all the great work you and your team did this year, you can see how your business grew, adapted and evolved. Most importantly, it allows you to reflect on what worked in 2025 and build on it for an even better 2026.

Tip: Email valued clients, suppliers, and vendors, thanking them for their contribution to helping you make it through 2025, along with highlighting your business successes and any new plans for 2026.

Set your strategy to position your business for sustainable growth

If recent years have taught business owners anything, it’s to stay adaptable. Scenario planning — often defined as “what if” planning — helps you prepare for the unexpected by testing your business model against different outcomes.

For instance:

• What if tariffs or shipping disruptions arise?

• What if customer demand shifts?

• What if your cost of raw materials doubled?

• What if your biggest supplier didn’t pay you on time?

• What if a planned expansion or investment fails?

Thinking through these “what ifs” lets you detect potential pitfalls or cash gaps before they happen. It can also stress test your plans against a variety of situations.

For a deeper dive, check out 5 Strategies for Building Business Resilience in Changing Times. 

This is also a great time to revisit your business plan and make necessary adjustments to align it with your current goals and circumstances, as well as the state of the current economy. Update your financial projections, review your compensation packages and update your objectives.

Tip: Set some 2026 financial goals, like improving cash flow, reducing debt, investing more in your business or reducing expenses. Try the free RBC Business Plan Builder Tool to help you get started on your 2026 plan or read our article How to Build the Best Business Plan Ever: Step-by-Step Guide for inspiration.

Bottom line

No matter how long you’ve been in business, reviewing 2025 can help strengthen your foundation, build resilience, and start the new year with confidence. With your finances in shape, funding opportunities explored, operations tuned up, and plans in place for different scenarios, you’ll be ready for whatever 2026 brings.