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Good accounting packages for a Canadian small business do four jobs: track GST/HST, work out payroll remittances, keep records the CRA will accept for six years, and hand your accountant clean files at year end. Everything else is decoration. Sage is one name you’ll run into (we use it as an example only, and we haven’t confirmed prices or features for it or any other product).
What should accounting packages do for a Canadian business?
Start from the deadlines, because the software has to serve them. Here is what the CRA sets, and what each item means for your choice.
| Job | CRA rule | What to look for |
|---|---|---|
| Keeping records | Six years from the end of the last tax year they relate to | Exports you can open without the software |
| GST/HST return, revenue up to $1.5 million | Annual period by default, quarterly or monthly by choice | Tax reports by period |
| GST/HST return, $1.5 million to $6 million | Quarterly by default, monthly by choice | Same, with filing reminders |
| Payroll remittance, average withholding under $25,000 a month | 15th of the following month (regular remitter) | A remittance summary per period |
| Small employer under $3,000 a month | Quarterly, on 15 April, 15 July, 15 October and 15 January | Quarterly totals |
A sole proprietor with no staff can ignore the last two rows. Most people in that position just need invoices, expenses and a tax report.
Do you need accounting software at all?
Not on day one. Picture Jess, a freelance photographer in Saskatoon with a dozen invoices a month. A spreadsheet, a separate bank account and a folder of receipts will carry her a long way. The tipping point is usually GST/HST registration, hiring a first employee, or a tax time that ate three weekends. Once one of those happens, software pays for itself in saved hours.
Will the software get sales tax right?
Mostly, but you should test it. Set up three or four real invoices and compare the tax with a separate tool. In Ontario, HST is 13%, so a $100 sale comes to $113.00 with $13.00 of tax, and you can confirm that on the GST/HST calculator. If a customer’s invoice ever shows a different figure, find out why before you file.
Watch the odd cases. Zero-rated and exempt sales, sales to another province, and Quebec’s separate QST all need the right tax code on each line. The GST and QST calculator shows what a Quebec sale should look like. A wrong code on one recurring invoice repeats every month until someone notices, so check your template once, not just a single sale.
Do I need payroll inside the same package?
Only if you have employees, and even then it can live somewhere else. What matters is that the numbers match what you actually remit.
Take one employee in Ontario paid $3,000 gross each month. Our payroll remittance calculator puts income tax held back at $292.37, employee CPP at $161.15 and employee EI at $48.90. You add $161.15 of CPP and $68.46 of EI (1.4 times the employee amount). The total to send the CRA is about $732 a month, and the full cost of that person is $3,229.61 with your share included.
Run the same pay through your package. If it differs by more than a few cents, the tax tables may be out of date. The payroll deductions calculator is a quick second opinion. Late payments cost real money too: the CRA lists penalties from 3% for a payment one to three days late up to 10% when it’s seven days or more, plus interest.
How do I test a package before I commit?
Use the free trial period if one exists, and check a few plain things.
- Can you export every transaction to a spreadsheet? Try it on day one.
- If you stop paying, can you still open your old years? The CRA says electronic records must stay readable for the full retention period.
- Does it keep a log of who changed what and when?
- Can your accountant log in, or does she need you to email files?
- Does it connect to your bank, and can you undo a wrong match?
Ask your accountant before you buy. She’ll be the one cleaning up after a bad setup, so her preference counts for more than any review you read.
What if you want to switch later?
People do, and it’s easier when you plan for it. Before you leave a package, export the full transaction history, the chart of accounts, customer and supplier lists, and the last tax reports. Keep them with your other records for the six years. Start the new package at the beginning of a month or a tax period, so the old and new books each cover clean stretches.
What mistakes cost the most?
Buying too much is the common one. A business with ten invoices a month doesn’t need inventory tracking or multi-currency support. The second is skipping the bank reconciliation: if the software’s balance doesn’t match your bank statement at month end, something is missing, and it’s easier to find in week five than in month eleven.
Third, mixing personal and business spending in the same account. No package fixes that. And the profit shown on screen isn’t your tax bill. To see what a corporation with $200,000 of taxable income might owe, try the corporate tax calculator. For a sole proprietor, the self-employed tax calculator adds CPP.
We couldn’t confirm what any package costs, which features it has or how it ranks against others. Check the vendor’s own page for that, and get the price in Canadian dollars with tax shown.
Where the numbers come from
Record keeping, GST/HST reporting periods, payroll remittance dates and penalties come from Canada Revenue Agency pages, read in September 2026. The worked example uses our own calculators with 2026 Ontario and federal payroll rates. The Ontario corporate rate in the calculator is a blend across the 1 July 2026 change, so treat it as an estimate.
Frequently asked questions
How long must I keep accounting records in Canada?
Generally six years from the end of the last tax year they relate to. Some records, such as those about property you bought or sold, may need to be kept longer.
Can I keep my books in the cloud?
Yes, as long as you can produce readable electronic records for the whole retention period. Check that you can still export your data if you cancel.
Does accounting software file my GST/HST return?
That depends on the product. Whatever it does, the CRA return is your responsibility, so compare the totals with your own records before you send it.
Do I need payroll in the same package?
Only if you have employees. What matters is that the CPP, EI and tax figures match what you remit to the CRA.
Should my accountant choose the software?
Ask her before you buy. She works in your files every year, so her preference saves you time and fees.
- 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