Updated Checked by the Tax-Services.ca editorial team How we check
When you integrate financial systems in a Canadian business, the tax rule that bites first is about records, not software: the CRA expects you to keep the books and supporting documents for six years from the end of the last tax year they relate to. Every tool you connect, from invoicing to payroll to a bank feed, has to hold up to that.
What does the CRA ask of your connected systems?
Nothing about brands. The CRA doesn’t approve accounting software. It cares that the records exist, can be read, and can be shown to an officer on request. That sounds easy until you run three tools that each keep a piece of the story.
If you keep records electronically, they need to stay readable in electronic form for the full six years, and a paper printout doesn’t replace them. The CRA generally wants records kept in Canada. It may give permission to keep electronic records outside the country, but then they have to be available to its officials in Canada in a format its own software can read. The CRA spells this out in its circular on electronic record keeping. So if your new system runs on a server abroad, ask the vendor where the data sits before you sign anything. Ask about exports too. A system that holds your only copy and can’t produce a clean file is a risk the day you switch vendors.
And don’t delete old data to save space. Destroying records early needs written permission from the CRA (there’s a form for it, T137), and doing it without permission can lead to prosecution.
Which systems usually need to agree with each other?
Start with the money that has a deadline attached. The table shows the flows where a mismatch turns into a filing problem, and the tool to sanity check each one.
| Flow | What has to match | Check it with |
|---|---|---|
| Sales to the ledger | Tax charged on invoices equals the GST/HST you report | GST/HST calculator |
| Payroll to the ledger | Pay, deductions and employer share equal the remittance | Payroll remittance calculator |
| Ledger to the return | Profit on the books leads to taxable income on the T2 | Corporate tax calculator |
| Bank to the ledger | Every deposit has a source document | Your own reconciliation |
How do you test the link with real numbers?
Run one employee through the chain by hand and compare. Say you pay $3,000 every two weeks in Ontario. Our payroll remittance calculator shows $732.62 held back from the employee per period (income tax, CPP and EI) and $228.41 of employer CPP and EI on top, so $961.03 goes to the CRA each period. If your payroll tool and your ledger show a different total, find out why before year end, not in March.
Do the same with a sale. Put a known price through the GST/HST calculator and see if your invoicing tool and your books agree on the tax line. Then push a rough year of profit through the corporate tax calculator to see the ballpark you should expect on the T2. It ignores associated companies and passive income rules, so treat it as a sense check and not a filing number.
What does a one-hour integration test look like?
Before you connect anything for real, pick one customer and one supplier and send one invoice and one bill through the whole chain. Follow each into the ledger, then into the tax report, then into the bank match. Write down every place a person had to retype something. Those are the spots that will break at 200 transactions a month.
Also test going backwards. Switch a connection off for a day and see what happens to the entries that were in flight. Some tools queue them and some quietly drop them, and you want to learn which kind you have on a quiet Tuesday, not during a deadline week.
What goes wrong most often?
Duplicate entries top the list. Two tools that each post the same bank deposit give you revenue that never happened. Next is a chart of accounts that differs between the sales tool and the ledger, so categories get remapped by hand every month. Third is tax codes. If the invoicing tool treats an item as taxable and the ledger treats it as exempt, your return will follow one of them and be wrong against the other.
Fix these before you add more connections. Each new link multiplies the places a number can drift.
Also be honest about what you can’t buy your way out of. No integration tool changes filing dates or makes a wrong tax code right. It only moves the data faster, including the mistakes. We couldn’t confirm any product claims about specific software, so we don’t make any. Judge a tool by whether it exports clean files, keeps an audit trail and lets you store the data where the CRA rules allow.
Our sources
The record keeping rules come from the Canada Revenue Agency page on where to keep records and for how long. The payroll and corporate examples come from our own calculators, which use 2026 CPP, EI and corporate rate data from the CRA. The Ontario small business rate in the corporate tool is a blend for a calendar year, so your own year end changes it.
Frequently asked questions
How long must I keep electronic records in Canada?
Generally six years from the end of the last tax year they relate to. A paper copy doesn't replace the electronic file.
Can my accounting data sit on a server outside Canada?
Only with CRA permission, and the records must be available to CRA officials in Canada in a format its software can read.
Do I need CRA approval for my accounting software?
We found no CRA approval list for software. What counts is that your records exist, are readable and can be produced on request.
Can I delete old records to free up space?
Not before the retention period ends, unless the CRA gives written permission. Destroying records without it may lead to prosecution.
Which link should I test first?
Payroll to the ledger, because the remittance has a deadline and the CRA can compare it with what you report.
- 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