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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 whether 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’ll be asked for it when you register for a GST/HST account, and registering online is the fastest and easiest way to get one. Save or print the number when it appears, because the CRA says it won’t be sent to you.
Then the boring decisions. Your legal name and type (sole proprietor, partnership or corporation), your fiscal year end, your province, and whether you’re registered for sales tax. Write them on one page. The software asks for all of them in the first ten minutes, and you don’t want to be guessing with the cursor blinking.
Should you register for GST/HST now?
Only if you have to, or if you want to. The small supplier threshold is $30,000 in taxable sales, either in a single calendar quarter or over four consecutive quarters, and you must register once you pass it. Below that you may register voluntarily. The CRA’s page on who needs to register for GST/HST also says self-employed taxi and commercial ride-sharing drivers must register even if they’re small suppliers.
Once you cross the line, things move fast. Go over $30,000 in a single quarter and the same page says you have to charge GST/HST on the sale that put you over. Creep over it across several quarters and you stop being a small supplier at the end of the month following the quarter in which you exceed $30,000. Either way, if sales are climbing, set the software up for tax early rather than in a panic later.
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 ballpark like that before the first payday.
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.
What should your first week with the software look like?
Keep it small. Day one, enter the basics from your one-page list. Day two, connect the business bank account and sort the first ten transactions by hand, so you see how the software handles them. After that, send yourself a test invoice, check that the tax line matches what you expected, and delete the test.
Then pick a weekly slot, even twenty minutes on Friday, to match receipts to bank lines. Sam in Calgary does hers with a coffee on Sunday night. Small and regular beats a big, grim cleanup in March.
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. The CRA’s circular on electronic record keeping says that when your system changes, your ability to access and retrieve data has to be preserved, and a system should be able to export the required information in a commonly used non-proprietary format. Ask about exports before you commit.
The sources behind this page
Registration and record keeping points come from Canada Revenue Agency pages (GST/HST registration pages, RC188 and IC05-1), read on 11 October 2026. Dollar examples come from our own calculators on 2026 data. This site doesn’t rate any software product and has no link with the CRA.
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