Updated Checked by the Tax-Services.ca editorial team How we check
A bookkeeping routine that takes one afternoon a month is enough for most small Canadian businesses. Record what came in, record what went out, match it to the bank, and put the tax you owe somewhere safe. Skip a month and the next one costs double, because you’re rebuilding from memory.
Who needs a bookkeeping routine, and how often?
Anyone with business income does. The CRA asks you to keep records that show your tax, and it wants them for six years from the end of the last tax year they cover. Nothing in that says how often you update them, but the CRA does say you stay responsible when someone else keeps your books.
Searching for a firm like Astrid Bookkeeping is one route, and hiring help is fine. Even then, you’ll still need a habit of sending documents on time. A bookkeeper can only work with what lands in their inbox.
Weekly is best when you have many small sales, since a stack of forty receipts from one week is a chore but a stack from three months is a weekend you’ll resent. Monthly works for most. Quarterly is too slow for anyone who collects sales tax or has staff.
What goes into the monthly close?
| Step | What you do |
|---|---|
| 1. Sales | Enter every invoice and payment, with the tax shown apart |
| 2. Bills and receipts | Enter each one and attach the image |
| 3. Bank match | Tick each line on the statement against your records |
| 4. Tax owing | Note the sales tax collected and payroll amounts held back |
| 5. Set aside | Move that money to a separate account |
| 6. Backup | Export a copy and store it off the software |
Step three is the one that finds trouble. If the bank says $4,120 and your books say $4,020, there’s a missing or mistyped line, and it’s much easier to find in the month it happened. Say Dana runs a small dog-grooming van in Winnipeg. She sits down on the last Friday of the month with a coffee, works the six steps in order, and is done in about two hours. Her trick is a fixed date, because a routine that floats around the calendar tends to get dropped.
How much sales tax should you be setting aside?
More than most people expect. Say you invoice $20,000 in a month in Ontario. The GST/HST calculator shows $2,600 of HST on top, so clients pay $22,600. Only the $20,000 is your revenue. The $2,600 is held for the government until you file and remit.
That’s why step five exists. If the tax sits in your everyday account it gets spent, and then the return comes due.
Do you have to register at all? The CRA’s guide for registrants defines a small supplier as a business whose worldwide taxable revenue, counting associated businesses, is $30,000 or less in a single calendar quarter and over the last four consecutive calendar quarters. See the CRA’s general information for GST/HST registrants for the full rules and what is left out of the count. Some businesses, such as taxi drivers, must register whatever they earn.
What about payroll and your own tax?
If you pay someone, your monthly close gets a new job. For one employee earning $2,000 gross a month, the payroll remittance calculator gives $391.82 to remit. Of that, $244.53 comes out of the employee’s pay and $147.29 is your own share of CPP and EI. It’s an estimate for one pay period and it leaves out workers’ compensation and other levies.
Your own tax is the other one. On $50,000 of net business income in Ontario, the self-employed tax calculator shows $11,495 of income tax and CPP combined, which is 23% of the income. It counts both halves of CPP, and it doesn’t include GST/HST, EI or business expenses. So treat it as a ballpark for setting aside money. In monthly terms that’s roughly $958, so a decent habit is to move about a quarter of every deposit into the tax account.
If you’re incorporated, the corporate tax calculator gives $11,696 on $100,000 of taxable Ontario income for calendar 2026. A corporation files within six months of its year end.
Do you need accounting software?
No, though it saves time. A spreadsheet works for a handful of transactions a month. Once you have dozens, software that reads bank feeds does the matching in minutes. The CRA doesn’t care which tool you use. It cares that the records are complete, readable and backed by receipts, and that you can produce them if asked.
Mistakes that make bookkeeping a mess
Using one bank account for everything is the big one.
Next is keeping receipts in a shoebox until March. Photograph each one when you get it, and attach it to the entry. Then, when a number looks odd, you can check it in seconds rather than hunting for a slip.
A third is treating the software’s totals as proof. They only add up what you’ve typed, so a dinner coded as an expense stays wrong however tidy the report looks.
And don’t ignore small gaps. A $40 difference today is a $400 puzzle in six months.
Where these figures come from
The records rules come from the Canada Revenue Agency‘s guide to keeping records. The corporate filing deadline is from the CRA’s page on filing a corporation return. All tax and payroll figures come from the calculators on this site, using 2026 data. Nothing here is a comment on any bookkeeping firm, and the site has no tie to the CRA.
Frequently asked questions
How often should I update my books?
Monthly suits most small businesses. Weekly is better with many small sales, and quarterly is too slow if you collect sales tax or pay staff.
How long do I keep the records?
Six years from the end of the last tax year they relate to, unless the CRA has given permission to destroy them sooner.
Do I still have to keep records if I hire a bookkeeper?
Yes. The CRA says you remain responsible for them when someone else keeps them.
How much HST should I put aside from a sale?
In Ontario, 13% of the pre-tax amount. On a $20,000 invoice that is $2,600.
When must a corporation file its tax return?
Within six months after the end of its tax year, per the CRA.
- 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