Running a small business in Canada can be both exciting and overwhelming especially when it comes to keeping your books in order. Between managing clients, staff, and daily operations, bookkeeping often ends up at the bottom of the to-do list.
But staying organized financially isn’t just about compliance with the CRA it’s what keeps your business healthy and ready to grow.
Here are the top 10 bookkeeping questions most Canadian small business owners ask (and the answers you’ve been looking for).
1. Do I really need a bookkeeper, or can I do it myself?
It depends on the size and complexity of your business. Many startups start off doing their own books, but as transactions increase, hiring a bookkeeper saves time and costly mistakes. Think of it this way: your time is better spent growing your business than reconciling receipts at midnight.
2. What’s the difference between bookkeeping and accounting?
Bookkeeping is about recording daily transactions invoices, payments, expenses, payroll, etc.
Accounting takes those records and turns them into financial insights and reports.
In short: bookkeepers keep things organized; accountants interpret what it all means.
3. How often should I update my books?
Ideally every week, but at the very least once a month. Regular updates make tax season smoother and help you catch errors before they snowball. Waiting until year-end often leads to stress, missing receipts, and late-night panic
4. What’s deductible for my small business?
A lot more than many realize from office supplies and equipment to business meals and travel. Even part of your home office may qualify. Keep digital copies of every receipt, and when in doubt, check CRA guidelines or ask your bookkeeper before claiming.
5. How do I separate personal and business expenses?
This is a big one. Always keep separate bank accounts and credit cards for business. Mixing them not only complicates your books but can also raise red flags with the CRA. Treat your business like its own person it needs its own wallet.
6. Do I need to charge GST/HST right away?
If your business earns over $30,000 in revenue in any 12-month period, yes you must register for GST/HST. Below that threshold, it’s optional. But even if you’re under, registering early can look more professional and allow you to claim input tax credits.
7. What bookkeeping software works best in Canada?
Popular choices include QuickBooks Online, Xero, and Wave Accounting.
Each integrates with Canadian banks and supports multi-currency transactions. Choose one that fits your comfort level and make sure it plays nicely with your accountant’s system.
8. How long should I keep my records for the CRA?
The CRA requires you to keep your records for at least six years from the end of the last tax year they relate to. Digital copies are fine just make sure they’re clear, complete, and backed up safely (cloud storage is your friend here).
9. What happens if I fall behind on bookkeeping?
First, don’t panic it happens. Gather your receipts, invoices, and bank statements, then contact a bookkeeper to help you catch up. The sooner you do it, the less stressful tax season will be. Ignoring it only makes the snowball bigger.
10. How can good bookkeeping actually help my business grow?
Accurate books show you where your money’s really going. You’ll spot trends, understand cash flow, and make better decisions like when to hire, invest, or expand. Bookkeeping isn’t just paperwork; it’s a window into your business’s future.
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