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To set up accounting software for a new business in Canada, get your business number first, pick the fiscal year end, decide if you’ll charge GST/HST, then enter your opening details and connect the bank. That order saves rework. Most of the mess in a first year comes from starting the books before those decisions are made.
What do you need before you open the software?
A business number, for one. The CRA says that if you don’t have one, you get it when you register for a GST/HST account, and the quickest route is Business Registration Online. Save the number when it appears, because the CRA notes it won’t be mailed to you.
Then the boring decisions. Your legal name and type (sole proprietor, partnership or corporation), your fiscal year end, your province and if you’re registered for sales tax. Write them on one page. The software asks for all of them in the first ten minutes.
Should you register for GST/HST now?
Only if you have to, or if you want to. The small supplier threshold in our data is $30,000 in taxable sales, and you must register once you pass it. Below that you may register voluntarily. The CRA pages we read also say some businesses, such as taxi and ride-sharing drivers, must register regardless of size.
Why does it matter for setup? Because the software needs to know. Registered businesses charge tax on each invoice and track the tax they paid on purchases. On a $2,500 Ontario job, the GST/HST calculator shows $325 of HST on top, so $2,825 billed. In Alberta it’s $125 of GST and $2,625. If you’re not registered, your invoices carry no tax line at all.
Already holding a total with tax in it? The HST reverse calculator backs the tax out.
How do you set up the books in a sensible order?
| Step | What to enter |
|---|---|
| 1 | Business name, type, province, fiscal year end |
| 2 | Sales tax status and filing period, if registered |
| 3 | Chart of accounts: income, expenses, assets, liabilities, equity |
| 4 | Opening balances as of your start date |
| 5 | Bank and card accounts, then a bank feed if offered |
| 6 | Customers, suppliers and, if needed, employees |
| 7 | One test invoice and one test expense |
Most packages offer a default chart of accounts. Use it and trim it. Adding forty custom accounts in week one just makes reports harder to read.
A new business often has no opening balances except what you put in. Record that as owner’s money or share capital, the way your accountant tells you, and keep the receipt.
What if you’ll have employees or you’re self-employed?
Payroll can wait until you hire. When you do, you’ll hold back income tax, CPP and EI and send the employer’s part on top. For one person paid $2,000 every two weeks in Ontario, the payroll remittance calculator gives $555.05 per pay period, which is $398.41 held back plus $156.63 from you. Check your software’s payroll against a figure like that before the first pay day.
If you’re a sole proprietor, there’s no payroll for yourself. Net income and CPP both land on your personal return. On $80,000 of net business income in Ontario, the self-employed tax calculator shows $13,233.57 of income tax and $8,892.90 of CPP, $22,126.47 together. It leaves out GST/HST and EI, so it’s a planning figure only. Set money aside as you go, and look at tax instalments if your bill will be large.
Setup mistakes that cost you later
Mixing personal and business spending is the classic. Open a separate account from day one, even a basic one, and run all business money through it.
Another is skipping receipts. The CRA says to keep records for six years from the end of the last tax year they relate to, and you stay responsible even when a bookkeeper keeps them. Scan or photograph as you go.
The last is picking a tool you can’t leave. CRA guidance says that when you change systems you should keep the ability to export the required information in a common non-proprietary format, so ask about exports before you commit.
Where the information comes from
Registration and record keeping points come from the Canada Revenue Agency (business number and GST/HST registration pages, RC188 and IC05-1). The threshold is from the CRA page used in our 2026 sales tax data. Dollar examples come from our own calculators on 2026 data. We don’t rate any software product here.
Frequently asked questions
What do I need before setting up accounting software?
A business number, your legal business type, your fiscal year end, your province and your GST/HST status.
Do I need to register for GST/HST before I start?
Only once you pass the small supplier threshold of $30,000, or if you choose to register. Some businesses, like taxi drivers, must register regardless.
Should I use the default chart of accounts?
Yes, and trim it. Too many custom accounts make your reports harder to read.
How long do I keep the records?
Six years from the end of the last tax year they relate to, unless the CRA gives permission to destroy them earlier.
Do I need a separate bank account?
It isn't a CRA rule we found, but it keeps the books clean and makes bank feeds work properly.
- 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
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.