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Accounting and bookkeeping are not the same job. Bookkeeping records what happened in your business, and accounting turns those records into reports, tax filings and advice. The CRA expects you to keep the records for six years either way.
Where does bookkeeping stop and accounting start?
Think of it as two shifts. The first shift is daily: invoices, receipts, bank matching, payroll entries. That’s bookkeeping. The second happens after the year closes, when someone reads the books, adjusts them for tax and prepares the return.
Small businesses often do the first shift themselves and hire out the second. That’s a reasonable split. Doing it the other way round, paying a professional to type receipts, usually costs more than it should.
| Task | Usually sits with |
|---|---|
| Recording sales and expenses | Bookkeeping |
| Bank reconciliation | Bookkeeping |
| Payroll entries and remittances | Bookkeeping, sometimes a payroll service |
| Year end adjustments | Accounting |
| Corporate tax return (T2) | Accounting |
| Structure and tax planning | Accounting |
Who does what can differ from one firm to the next, so ask for the split in writing.
What records does the CRA want you to keep?
Ledgers, journals, financial statements, returns, correspondence and the supporting documents behind them. The CRA also names records from computerized systems, such as accounting software and point of sale systems. They count the same as paper.
The retention period is six years from the end of the last tax year the record relates to. Keep a receipt from a 2026 purchase until at least the end of 2032 if the year is a calendar one. We haven’t covered the special cases, such as a dissolved corporation or a deceased taxpayer, so read the CRA’s guide RC4409 or IC78-10 if that’s you.
Why does accurate accounting and bookkeeping change your tax bill?
Every dollar of profit in the books ends up in a return. If a corporation in British Columbia reports $100,000 of active business income and qualifies as a CCPC, the estimate is $11,000 of tax. Miss $20,000 of legitimate expenses and you’d report $120,000, which raises the tax to $13,200 by the corporate tax calculator. That’s $2,200 you paid because a shoebox went missing.
The reverse hurts more. Claim what you can’t back up, and the six years of records become the thing an auditor asks to see.
The same holds for people paid through the business. Payroll amounts land in your books first. One Ontario employee at $3,000 every two weeks means $961 to remit each period, of which the employer adds $228, per the payroll remittance calculator. If those entries are late or wrong, you find out when the CRA writes.
When does an accountant need to step in?
When the company files a T2. The return is due six months after year end and the tax balance two or three months after, depending on your balance-due day, so the year end work needs time. The CRA says every resident corporation files every year, even with nothing owing.
You’d also want an accountant when you’re deciding between salary and dividends. The dividend tax calculator and the self-employed tax calculator give a first look, but they don’t replace advice on your own numbers. If you’re a sole proprietor with modest income, good books and software may be all you need.
What goes wrong most often?
Mixing personal and business spending is the classic one. Open a separate account and keep to it. Then comes catching up once a year, which turns a small job into a big one and hides mistakes until they’re expensive.
Another is losing paper. Scan receipts as you go. Electronic copies of records are allowed by the CRA, and computer records must be available if it asks.
We couldn’t confirm what accounting or bookkeeping services cost, or whether a bookkeeper in your province needs any licence, so we haven’t quoted either. Ask each provider what they hold and how you can check it.
Where the numbers come from
Record keeping and filing rules come from the Canada Revenue Agency pages on keeping records and the corporation income tax return, read on September 30, 2026. Tax examples come from this site’s calculators, using 2026 data checked on September 29, 2026. This site has no link to the CRA, any government or any accounting firm.
Frequently asked questions
What is the difference between accounting and bookkeeping?
Bookkeeping records transactions. Accounting reads those records, adjusts them for tax and prepares reports and returns.
How long do I keep accounting records?
Six years from the end of the last tax year they relate to, unless the CRA gives permission to destroy them earlier.
Are electronic records acceptable?
Yes. The CRA treats records from accounting and point of sale systems the same as paper and can ask to examine them.
Do I need an accountant if I have a bookkeeper?
For a corporation, usually yes at year end, because someone has to prepare the T2 return. Ask what your bookkeeper prepares.
What does accounting and bookkeeping cost?
We couldn't confirm typical fees from an official source. Get a written quote that lists what's included.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.