Updated Checked by the Tax-Services.ca editorial team How we check
Yes, you can do your own bookkeeping in Canada. There’s no rule that says a business owner needs a licence or a bookkeeper to keep their own books. The CRA only asks that your records are complete and organized, and that you can back up every number on your return.
What does the CRA ask you to keep?
The CRA’s wording is that records are all of your accounting and other financial documents, and they must be kept organized. In practice that means income and expense records, and, where they apply, motor vehicle records, property records, GST/HST records and payroll records.
How long to hold on to them is a separate rule: six years from the end of the last tax year they relate to, unless the CRA has given you permission to destroy them sooner. The CRA’s page on where to keep records and for how long also covers the exceptions. Doing the books yourself doesn’t change any of it, and neither does hiring someone later, because you stay responsible for the records either way.
When is doing it yourself a good idea?
When the business is small and the paperwork is thin. A freelancer with a handful of clients, one bank account and no staff can usually keep a clean set of books in an hour or two a week. You know the business better than anyone, and you’ll spot a strange number faster than a stranger would.
It gets harder with volume, staff and sales tax. A shop with hundreds of sales a week, or a company that runs payroll, has more places to slip. Hand it off if the hours you spend on receipts are hours you’d otherwise spend earning money, and keep it if the work takes you twenty minutes and you find it oddly calming.
What does the sales tax side look like?
This is where do-it-yourself books most often go wrong. Take an Ontario business that sells $60,000 in a year. At 13% HST, it collects $7,800 from customers. If it also paid $20,000 for business costs, it paid $2,600 of HST on those. If the business is registered, the amount it sends the CRA is the difference, $5,200, before any other adjustments.
You can check the split yourself with the GST/HST calculator. Do you have to register at all? Not if you’re a small supplier, which means your taxable sales are $30,000 or less in any single calendar quarter and over the last four quarters. Go over either number and you must register. You can also register voluntarily below it, which some owners do to claim tax back on their costs. The CRA’s GST/HST registrant guide has the details.
What should you track each month?
| Task | How often | What it prevents |
|---|---|---|
| Save receipts and invoices | Weekly | Lost deductions |
| Match bank and card statements to your records | Monthly | Errors sitting unnoticed |
| Set aside sales tax collected | Every sale | A surprise bill |
| Remit payroll deductions | Per your schedule | Interest and penalties |
| Back up your files | Monthly | Losing the lot |
Use accounting software or a plain spreadsheet, whichever you’ll actually open. This site hasn’t compared any product and makes no claim about them. The best tool is the one you use every week.
Jordan, who runs a small bike-repair business out of a garage in Saskatoon, uses a spreadsheet and a Sunday-evening habit: log the week’s sales, snap the receipts, match the bank. About forty minutes. At tax time there’s nothing to dig out.
Can you do your own bookkeeping and still use an accountant?
Yes, and many owners do. You keep the books, and an accountant reviews them once a year and prepares the return. That costs less than full service, because the accountant starts with tidy records. Fees vary a lot, so get a written quote before you commit.
If you’re a sole proprietor, the self-employed tax calculator gives you an idea of what your profit will cost you in tax and CPP. One gap: it leaves EI out. If you have staff, the payroll remittance calculator covers what you owe on their pay. And a corporation can see roughly what its profit will cost in the corporate tax calculator. The wider picture is in the guide to self-employed taxes.
Mistakes that hurt later
Mixing personal and business spending is the big one. Get a separate account and card on day one, even if you’re a sole proprietor. The next is leaving everything until March. Twelve months of receipts in a drawer is a weekend of misery, and you’ll forget what half of them were for.
The third is treating the owner’s pay wrongly. In a sole proprietorship, taking money out isn’t an expense. In a corporation, salary and dividends are treated differently. If you’re unsure which you’re in, ask before you record anything.
The fourth is skipping the sales tax set-aside. HST you collect isn’t revenue. Park it in a separate account and the quarterly bill stops being a shock.
Sources, and how we checked them
The description of business records comes from the Canada Revenue Agency‘s business records page. The HST rate for Ontario comes from the CRA’s GST/HST rates page, and the small supplier limit from its registrant guide. The example arithmetic is ours. No government body has reviewed or endorsed what you read here.
Frequently asked questions
Do I need a licence to keep my own books?
We found no rule requiring one for your own business. The CRA asks that your records are complete and organized.
What records must a business keep?
Income and expense records, plus motor vehicle, property, GST/HST and payroll records where they apply.
How long do I keep business records?
The CRA page we loaded didn't state the period. Read the CRA retention page and Information Circular IC78-10.
Should I use software or a spreadsheet?
Either works for a small business. Pick the one you will open every week. We make no claim about any product.
Can an accountant review books I kept myself?
Yes. Many owners keep the books and hire an accountant for the year-end work and the return.
- 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