How to keep your books in your first year

Updated October 1, 2026

Bookkeeping sounds bigger than it is. For a one-person business it comes down to three habits: keep business money separate, record every sale and expense with proof, and set money aside for tax. A little each week is far easier than sorting a shoebox of receipts in April.

Set up on day one

• A separate bank account and card for the business. A sole proprietor isn't legally required to have one, but it makes every other step simpler, and it's the first thing an accountant will ask for.
• One place for your records. A spreadsheet, an app or a bookkeeper. What matters is that it's the same place every week.
• A savings account for tax. Move money into it every time a customer pays you.

What to record

• Every sale: the date, the customer, the amount, any HST you charged, and whether it's been paid.
• Every expense: the date, the supplier, the amount, any HST you paid, and what it was for.
• Proof: copies of the invoices you send and the receipts you get. CRA accepts electronic records, so a clear photo or PDF is fine as long as it's readable and backed up.
• Vehicle and home office: if you plan to claim them, keep a log of business kilometres and note what share of your home you use for work.

How long to keep records

As a general rule, CRA expects you to keep records and receipts for six years from the end of the tax year they relate to. Keep them somewhere you can still reach if your phone or laptop dies.

A weekly routine (about 20 minutes)

1. Check your business bank and card transactions.
2. Label each one: which sale it was, or what kind of expense.
3. Attach a receipt or invoice to each line.
4. Follow up on invoices that haven't been paid.
5. Move your tax set-aside into the savings account.

Setting money aside for tax

A sole proprietor pays income tax and CPP contributions on business profit through their personal tax return. Many owners set aside about 25–30% of profit, plus all of the HST they collect, which belongs to CRA rather than to you. An accountant can give you a better number once you have a few months of results.

Key dates for a sole proprietor

• April 30: any income tax you owe for last year is due, even though the return itself can wait.
• June 15: the deadline to file your personal return with your business income (form T2125).
• HST returns: most new small businesses are set up to file once a year, unless they choose to file more often.
• Instalments: once you owe more than $3,000 at tax time in more than one year, CRA may ask you to pay during the year in quarterly instalments.

When to bring in an accountant

A good time is before your first tax season, or sooner if you're incorporating, hiring, or getting close to the $30,000 HST threshold. Tidy, complete books make their work faster and their bill smaller.

General information, not tax advice.

Official sources

• CRA: Keeping records
• CRA guide T4002: Self-employed business income
• CRA: GST/HST for businesses