Updated Checked by the Tax-Services.ca editorial team How we check
Pick digital accounting tools by testing five things before you pay: can you export everything in a common format, does it keep an audit trail, does it handle GST/HST and payroll the way you file, where does the data sit, and what happens when you leave. The CRA doesn’t approve or certify software, so the vendor’s badge tells you nothing. Your own test does.
What does the CRA ask of any accounting system?
The CRA publishes no list of approved products. What it publishes is what your records must do, and any tool you choose has to let you meet that. Its electronic record keeping circular says that before you adopt a new system you should confirm the audit trail of each transaction will be preserved, and that the system can still export the information in a commonly used, non-proprietary format.
The GST/HST guidance adds a practical point. A new system should capture enough detail to check the tax you charged on sales and the tax you paid on purchases. So if a demo can’t show you a sale with its tax split out, keep looking.
How do you test a tool in one afternoon?
Ask for a trial and run real numbers through it. Not the vendor’s sample company, yours. The table below is a short test plan built from the record rules, not a ranking of any product.
| Test | What passes | Why the CRA rules point to it |
|---|---|---|
| Export all transactions | A CSV or similar file opens in a spreadsheet | Copies must be in a non-proprietary, commonly used format |
| Trace one sale | You can follow it from invoice to bank deposit | The audit trail must be preserved |
| Enter a purchase with HST | Tax is stored separately from the price | You need the tax paid on purchases for input tax credits |
| Close a month, then edit it | Changes are logged or blocked | A trail that can be silently rewritten isn’t much of a trail |
| Read the data terms | You know where the files are hosted and how to get them back | Records must be available to the CRA even if a third party holds them |
Here’s how that plays out. Ben runs a small tile business in Barrie and has two trials open on a Saturday. He enters last month’s real invoices into each, exports both, and opens the files in a spreadsheet. One export is tidy and complete. The other is missing the tax column. Ten minutes in, he has his answer, and it had nothing to do with the sales pitch.
Should the tool handle payroll too?
Only if you’ll really use it. Payroll is where a wrong setting costs money fast, because you’re holding back tax, CPP and EI and owing your own share on top. Before you trust any tool’s payroll module, check one pay run against an independent estimate.
Here is one we ran. In Ontario, an employee paid $2,500 every two weeks has about $555.55 held back (income tax $374.06, CPP $140.74, EI $40.75). You add roughly $197.79 of employer CPP and EI. The payroll remittance estimate puts the total to remit at $753.34 per employee per period, or $3,766.69 for five. A tool that lands far from that deserves a question. It’s an estimate, since it leaves out things like benefits and workers’ compensation, but a gap of a few dollars is different from a gap of a few hundred.
Who can see your clients’ and staff data?
Invoices carry names and addresses, and payroll carries worse. The Office of the Privacy Commissioner says you stay accountable for personal information you pass to a service provider, and should make sure, by contract or otherwise, that it gets comparable protection. It also lists what safeguards can look like: passwords, encryption, limits on who has access, and staff training.
In practice, ask three plain questions. Can you give each person their own login with limited rights? Is two-step sign-in available? Who at the vendor can open your data? If the answers come back vague, that’s an answer.
Ask where the servers are too. The CRA expects records to be kept at your place of business or home in Canada unless it gives written permission, and it may allow electronic records elsewhere if copies reach its officials in Canada. A vendor that hosts abroad isn’t automatically a problem, but you should know about it before you sign. The CRA’s page on where to keep your records and for how long sets out the rule.
What should you ask your accountant before you buy?
Quite a lot, and it costs nothing. Which formats can they open without fuss? Do they want read-only access, or would they rather you send an export at year end? Have they seen problems with a product you’re thinking of? Your accountant works in these files every spring and has opinions you won’t find on a vendor’s site. If you have no accountant, ask a friend who runs a similar business what they’d change about theirs. A ten-minute chat can save you a year of grumbling, and it’s cheaper than a few bucks a month for a tool you hate.
What do people get wrong when they choose accounting software?
They buy on price and features, and they skip the exit. Moving out is the expensive part, so check the export before you move in. Another mistake is paying for a tool built for a business ten times your size. Most sole proprietors and very small firms need invoices, expense capture, bank matching and a GST/HST report. The rest is noise.
We didn’t compare product prices or features here. They change often, vendors’ claims vary, and we couldn’t verify them from an official source. If you want a cost check, work out what the tool saves in hours and use the ROI calculator. To see whether the price fits your margins, try the profit margin calculator. And when you’re setting up sales tax, the GST/HST calculator gives you a number to compare with what the software reports.
Where the numbers come from
The record requirements come from CRA Information Circular IC05-1R1, the CRA guidance on GST/HST electronic records and the CRA page on where to keep records. Privacy points come from the Office of the Privacy Commissioner of Canada. The payroll figures come from our calculator using 2026 data. No level of government runs or endorses this site.
Frequently asked questions
Does the CRA approve accounting software?
We found no CRA list of approved products. The CRA sets what your records must do, and your software has to let you meet that.
What should I check in a free trial?
Export your data to a spreadsheet, trace one sale from invoice to bank deposit, and confirm HST is stored apart from the price.
Do I need payroll in the same tool?
Only if you'll use it. Check one pay run against an independent estimate before relying on it.
Can my software provider keep the data outside Canada?
The CRA may allow electronic records abroad if copies are available to its officials in Canada in a format it can read. Ask the vendor where the data sits.
Who is responsible for privacy when a vendor holds my data?
You are. The privacy commissioner says an organization stays accountable for information it hands to a third party.
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