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Good bookkeeping software records every sale and expense, keeps sales tax apart from your revenue, and lets you hold the records for six years. Decide what your business needs before you look at any product, including the big names like QuickBooks from Intuit.
What does bookkeeping software actually do?
It replaces the shoebox of receipts and the spreadsheet you never quite trusted, pulling in bank transactions, matching them to invoices and bills, and dropping each item into a category so that, come year end, your accountant gets a profit and loss statement, a balance sheet and a sales tax summary.
That’s the job.
We aren’t rating any product here. We couldn’t confirm prices, discounts or feature claims from an official source, so what follows is a way to choose, plus what to test during a free trial.
What should you compare before you pick?
| Question | Why it matters |
|---|---|
| Does it handle GST, HST and PST or QST? | Rates differ by province, and you must record tax separately from sales |
| Can it import your bank and card feeds? | Manual entry is where errors start |
| Does it run payroll or connect to a payroll service? | Staff mean CPP, EI and income tax remittances |
| Can you export your data? | You may need to switch products or hand files to an accountant |
| Where is the data stored and who can see it? | Records hold customer and tax details |
| What does support include? | Ask about hours, language and whether help is by phone or chat |
| What is the total yearly cost? | Count add-ons, extra users and payroll fees |
If you only check one row, make it the data export. Get that wrong and you’re stuck.
How much sales tax will the software have to track?
Picture an Ontario shop that sells $8,000 of goods in a month. The GST/HST calculator puts HST at 13% at $1,040, so customers pay $9,040 in all. Sell the same goods in Alberta and the GST at 5% is $400, for a total of $8,400. Either way that tax belongs to the government, and your software has to keep it out of revenue.
Margins are the other number worth watching. An item that costs $60 and sells for $100 leaves $40, which is a 40% gross margin and a 66.7% markup, as the profit margin calculator confirms. Your reports should show that for each product line.
Go one step further. Say the Ontario shop also buys $3,000 of stock, with $390 of HST on the invoices. If that tax qualifies for an input tax credit (check the CRA rules for your purchases), the HST you owe for the month is $1,040 less $390, which is $650. Good software should show that number without a spreadsheet on the side. If you have to rebuild it by hand every month, keep looking.
How do you test a free trial properly?
Enter a month of real transactions, import one bank feed, send one invoice to yourself and run the sales tax report. Then try the export. Marcus, who runs a small print shop in Moncton, tested three products this way over a weekend and dropped two of them because the tax report didn’t match his own sums. A ten minute demo hides all of that. Spending a weekend on it can save you from paying a few bucks a month for software that fights you.
Which records does the CRA expect you to keep?
Six years, counted from the end of the last tax year they relate to, unless the CRA gives you permission to destroy them sooner.
Sales invoices, receipts, bank statements and payroll records all count. Cloud software only helps if you can still open the data years later, so test the export before you commit.
If you’re self-employed, your books also decide your tax. A $60,000 profit in Ontario means $14,602.92 of income tax and CPP, according to the self-employed tax calculator. And once you hire people, the payroll remittance calculator shows what each pay period costs you.
When is a spreadsheet enough?
If you have a handful of sales a month, no staff and no sales tax to track, a tidy spreadsheet can do. Once you register for GST/HST, hire someone or want your accountant to work from live books, software starts to pay for itself in saved hours. You can always switch later, as long as you can export. Starting small also keeps the monthly cost down.
Where do people go wrong?
- They pay for features they’ll never touch. Start with the smallest plan that covers tax and invoicing.
- They skip the trial. Enter a month of real transactions before you commit.
- They mix personal spending into business accounts, which forces manual sorting later.
- They trust automatic categories without looking. Review them each month.
- They assume software replaces advice. It records what you type in and doesn’t decide whether an expense is deductible.
When the books get messy, an accountant can review them once a year. More tools for owners sit in the business tax section.
Where this information comes from
Record keeping rules come from Canada Revenue Agency guidance on keeping records. Tax rates and the examples above come from the calculators on this site, which use 2026 data checked on September 29, 2026. No company named here is connected to this website, and no government body is either.
Frequently asked questions
What should bookkeeping software do for a small business?
It should record sales and expenses, keep sales tax separate, pull in your bank feeds and produce the reports your accountant asks for.
How long must I keep my accounting records?
Six years from the end of the last tax year they relate to, unless the CRA lets you destroy them earlier.
Does software handle GST and HST correctly?
Only when it's set to your province. Run a test sale and check the rate, for example 13% HST in Ontario.
Can I switch products later?
Yes, as long as you can export your data. Try the export during the trial.
Do I still need an accountant?
Often, yes. Software records what you enter, while an accountant reviews it and files returns.
- 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