Falling behind on bookkeeping is the single most common reason people call an accountant for the first time. It is recoverable. What it costs depends on the state of the records, not on how long it has been.
The variable that matters is documentation, not time
Two years of transactions in a dedicated business bank account, with statements available and most receipts somewhere, is a mechanical job. It takes hours, but they are predictable hours.
Two years of business and personal spending mixed in one account, with cash transactions and no receipts, is a reconstruction. Every transaction needs a decision, and decisions are what cost money.
If you are behind, the highest-value thing you can do before calling anyone is separate the accounts going forward. It does not fix the past, but it stops the problem growing.
Do the oldest year first
Catch-up runs oldest to newest, because each year's closing balances are the next year's opening balances. It also means the oldest filing — the one accruing penalties and interest longest — gets resolved first.
Expect the GST to be the painful part
Income tax on a late return is often less alarming than expected, particularly if the business was not especially profitable. GST is different: if you were registered and collecting, that money was never yours. It was held on behalf of the government, and it has usually been spent.
This is the number that surprises people, and it is worth knowing early rather than at the end.
Relief is available, but it is not automatic
The Voluntary Disclosures Program can waive penalties and a share of the interest for taxpayers who come forward and correct an incomplete or unfiled return. How much relief you get turns on whether the disclosure was unprompted or prompted: coming forward on your own attracts full penalty relief and most of the interest relief, while coming forward after CRA has already nudged you — an education letter, a general notice about your sector — still qualifies, but for a good deal less interest relief.
What closes the door is an audit or investigation already underway on the matter you want to disclose. That is a later point than most people assume, so a letter in the mailbox is a reason to move quickly, not a reason to conclude you have missed your chance. It is worth asking.
Separately, the taxpayer relief provisions allow CRA to waive penalties and interest in circumstances such as serious illness or events beyond your control. It is discretionary, it must be requested with supporting facts, and it reaches back only ten calendar years.
Both are reasons to deal with this sooner. The arithmetic on waiting is never favourable.
General information only, current at the date of publication. Tax rules and CRA positions change. This is not advice for your circumstances.