Updated Checked by the Tax-Services.ca editorial team How we check
When you retire legacy systems and move to new accounting software in Canada, the CRA still expects you to keep your records for six years from the end of the last tax year they relate to. That includes the electronic ones, and the CRA’s rule for system changes is short: you must still be able to get at the data, and the move can’t lose, destroy or alter information.
What must survive the switch?
Everything the CRA could ask for in an audit. The CRA lists records from accounting systems, point of sale systems, internet based systems and tax return software as records you keep alongside paper. Its wording on electronic records also says you must keep them in a readable form even when you have a paper copy.
So a printed year-end report isn’t a substitute for the ledger behind it. Keep the data.
Think of Greg, who has run a small auto-repair shop in Thunder Bay on the same desktop accounting package since 2012. The software is no longer sold, the old computer is on its last legs, and he’s moving to a newer program. His worry isn’t the new system. It’s the fourteen years of data trapped in the old one, and which of it the CRA could still ask about.
How long is six years in real dates?
Six years from the end of the last tax year the record relates to. For a business with a December year end, that gives these dates. The CRA’s page on where to keep your records and for how long states the six-year rule, and the dates below are our own arithmetic from it, so read the CRA page for special cases.
| Tax year ending | Keep the records until at least |
|---|---|
| December 31, 2020 | December 31, 2026 |
| December 31, 2022 | December 31, 2028 |
| December 31, 2024 | December 31, 2030 |
| December 31, 2025 | December 31, 2031 |
Say you switch systems in October 2026. Your 2020 records are near the end of their period, but 2021 through 2026 must come across in a form you can open. Destroying anything earlier than six years needs the CRA’s permission.
What should you test before you turn the old system off?
Run a trial import before you cancel anything. Then check the boring things: opening balances, customer and supplier lists, unpaid invoices, tax codes and payroll history. Compare two or three totals by hand. A trial balance that matches at the cutover date is worth more than any promise in a sales page.
Payroll deserves an extra look. Year-to-date deductions have to carry across correctly or your remittances and slips will drift. The payroll remittance calculator gives you a figure to check against, and the payroll deductions calculator covers one employee at a time.
Sales tax is the other one. If your old system coded HST or GST on each line and the new one maps codes differently, a rate change can hide in there. Spot check a few invoices with the GST/HST calculator.
Can legacy systems data sit in a format nobody can open?
That’s the trap. The CRA says backed up files kept in an encrypted or proprietary format must be restorable later to a state you can access and use. If the old package needs a licence you’re about to cancel, export the data to something plain first, then prove you can open it.
The CRA also asks you to keep an adequate, dated record of the changes you make to the system. A short log will do: what moved, when, who signed it off, and where the export lives.
If you scan paper into the new system, the CRA points to national standards for imaging and wants to see who authorized and did the imaging, what was imaged, and whether the source documents were destroyed afterward.
What if the old software won’t run any more?
This happens more than people admit. A program that only works on a retired operating system, or on one machine with a dying hard drive, is a risk in itself. Don’t wait for the failure. Get the data out while it still opens: export everything, in the most open format the program offers. Even a rough export of every transaction as a spreadsheet beats a perfect database nobody can read. Then keep that file, with a note saying which program made it and which years it covers. If you have to ask a friend with an old laptop to help, do it before the weekend the machine finally dies, not after.
Mistakes that cost money later
Deleting the old system the week you go live. Leave it read only for a full cycle, at least until a year end and a filing have run on the new one. The corporate tax calculator gives a quick reasonableness check on the first return you prepare from the new books.
Another is assuming your accountant has it covered. The CRA says you remain responsible for adequate records even when a bookkeeper, accountant or service provider keeps them for you. Ask where the data lives, and ask for a full copy.
What we couldn’t confirm is any fee, vendor feature or ranking, so this page names no product. Pick software by asking what it can export and how it handles your tax codes, then test with your own data.
How we checked the figures
The retention period and the rules for electronic records and system changes come from the Canada Revenue Agency‘s guidance on keeping records and electronic record keeping. The date table is our own arithmetic from the six year rule. Nothing here is a ruling on your business, and this site isn’t connected to the CRA.
Frequently asked questions
How long must I keep records after switching software?
The CRA says six years from the end of the last tax year they relate to, unless it gives permission to destroy them earlier.
Is a printed report enough?
No. The CRA expects electronic records to be kept in a readable electronic form even when a hard copy exists.
Can I keep backups in a proprietary format?
Only if they can be restored later to a state the CRA can access and use. Export to a plain format before you cancel the old software.
Should I log the migration?
Yes. The CRA says adequate documentation of system changes must be kept as a dated record.
Who is responsible if my accountant keeps the books?
You are. The CRA says you remain responsible for adequate records even when someone else keeps them for you.
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