Bookkeeping Basics for Canadian Startups and Small Businesses
Good bookkeeping is the foundation of any successful business. For Canadian startups and small business owners, it’s not just about tracking income and expenses—it’s about staying compliant with the Canada Revenue Agency (CRA), understanding your business’s financial health, and making informed decisions.
Whether you’re managing your books on your own or looking to hire a professional, this guide walks you through the essentials of bookkeeping in Canada.
What Is Bookkeeping?
Bookkeeping is the process of recording and organizing financial transactions, such as sales, purchases, payments, and receipts. These records form the basis of your financial statements and tax filings.
Think of it as your business’s financial diary—it helps you understand where your money is coming from and where it’s going.
Why Bookkeeping Matters
- CRA Compliance: You must maintain accurate records for tax reporting, HST/GST filings, and audits.
- Cash Flow Management: Know how much you have, what you owe, and what you can spend.
- Loan & Grant Applications: Lenders and government programs require up-to-date financials.
- Business Planning: Evaluate profitability and plan for growth with confidence.
Bookkeeping Basics Every Canadian Startup Needs
- Open a Business Bank Account: Separate personal and business finances to avoid confusion and ensure clean records.
- Track All Income and Expenses: Keep digital or paper records of every sale and purchase. Include invoices, receipts, and payment confirmations.
- Use Accounting Software: Popular options in Canada include:
- QuickBooks Online
- Wave (free for small businesses)
- Xero
- FreshBooks (great for service-based businesses)
- Record HST/GST Properly
If you earn $30,000 or more in gross revenue, you must register to collect HST or GST. Track the tax you collect and pay, and file returns quarterly or annually. - Reconcile Bank Statements Monthly
Make sure your recorded income and expenses match your bank records. This prevents discrepancies and errors. - Track Accounts Receivable and Payable
Know who owes you money (customers) and who you owe money to (suppliers or vendors). - Maintain Payroll Records: If you have employees, track wages, deductions, and remit CPP, EI, and income tax to CRA on time.
What Records Should You Keep?
CRA requires you to retain financial records for at least six years, including:
- Sales invoices and receipts
- Purchase invoices and supplier bills
- Bank and credit card statements
- Payroll records
- HST/GST filing
- Government correspondence
How Assentt Can Help
At Assentt, we offer complete bookkeeping support for startups and small businesses across Canada. Our services include:
- Monthly Bookkeeping & Reporting
- Bank Reconciliation & Transaction Categorization
- HST/GST Filing & Payroll Tracking
- Cloud Software Setup & Training (QuickBooks, Wave, etc.)
Final Thoughts
Bookkeeping doesn’t have to be stressful or overwhelming. With the right tools and support, you can stay organized, avoid CRA issues, and keep your business running smoothly.
📞 Contact Assentt today to learn how we can simplify your bookkeeping and support your financial success from day one.
The information provided is for educational/entertainment purposes only. Actual information may vary, please consult our office for further details. Got a question? Feel free to reach us at helpdesk@assentt.com.
