Category: Bookkeeping

You can do your own bookkeeping. The question is whether you should.

Most BC business owners should start by doing their own bookkeeping, but need to honestly reassess once they hit roughly 20–30 transactions per month, have employees, or collect PST — because the cost of professional cleanup after years of DIY mistakes almost always exceeds what ongoing bookkeeping help would have cost in the first place.

That’s the short answer. Here’s the longer one.

Every week, we sit down with a small business owner who spent two or three years “handling the books” themselves. They’re not in our office because things went well. They’re there because CRA sent a letter, or their year-end tax bill was a shock, or they just realized they’ve been collecting GST wrong for 18 months.

DIY bookkeeping isn’t bad. For some businesses, it’s the right call. But the decision deserves more than a gut feeling — especially in British Columbia, where the compliance burden is heavier than most provinces.

Can you legally do your own bookkeeping in BC?

Yes. There is no legal requirement in Canada to hire a bookkeeper or accountant to maintain your business records. CRA requires you to keep adequate books and records, but they don’t dictate who does it.

That said, “legal” and “advisable” are different things.

You’re personally responsible for the accuracy of every GST return, every payroll remittance, every PST filing, and every tax return — regardless of who prepares them. If you file your own GST return and get the input tax credits wrong, CRA doesn’t care that you watched a YouTube tutorial. The reassessment and penalties land on you.

So yes, you can do your own bookkeeping. But understand what you’re signing up for.

What you’re actually responsible for in BC

Most “should I do my own bookkeeping?” articles talk about tracking income and expenses as if that’s the whole job. In BC, it’s not even half of it.

Here’s what a BC small business owner with employees is responsible for tracking and filing:

Federal obligations: – GST collection and remittance — quarterly or annual filing depending on revenue. Get the input tax credit categories wrong and you’re looking at a reassessment. – Payroll remittances — CPP, EI, and income tax deductions for every employee, remitted on a schedule set by CRA based on your withholding volume (quarterly for small employers, monthly for most, or more frequently for larger payrolls). – T4s and T4 Summaries — annual employee tax slips, due by the last day of February (or the next business day if that falls on a weekend). – Corporate tax return (T2) — due six months after your fiscal year-end, but taxes owed are due two months after year-end (three months for eligible CCPCs that claimed the small business deduction). – CRA record keeping — you must retain all financial records for six years from the end of the tax year they relate to.

BC provincial obligations: – PST collection and remittance — if you sell taxable goods or services, you must register, collect, and remit PST. This is separate from GST. British Columbia is one of the few provinces that still runs a dual tax system instead of harmonized HST, which means two separate returns. – WorkSafeBC premiums — mandatory for most businesses with employees. Premiums are based on your industry classification and payroll, reported and paid quarterly or annually. – Employer Health Tax (EHT) — under the Employer Health Tax Act, this kicks in when your BC remuneration exceeds $1,000,000 annually (with a graduated rate between $1,000,000 and $1,500,000). A lot of growing businesses miss this threshold and get caught. – BC corporate annual report — filed through BC Registry Services. Miss it and your company can be dissolved.

If you have contractors: – T4A slips for subcontractor payments over $500 in a calendar year (T5018 for construction subcontractors instead) – Proper classification documentation — CRA is increasingly aggressive about worker misclassification

If you sell across provincial lines: – Potentially marketplace facilitator obligations – Different PST/HST rules per province

That’s the stack. Every piece of it requires accurate, categorized, up-to-date books. Miss one, and the penalties compound fast. According to the Excise Tax Act, CRA’s late-filing penalty for GST starts at 1% of the balance owing plus 0.25% for each complete month the return is overdue, up to 12 months — and the penalty doubles for repeat late filers.

When DIY works and when it doesn’t

Here’s a framework based on what we’ve seen with our own clients. It’s not scientific, but after years of seeing what works and what breaks down, these patterns are consistent.

DIY bookkeeping usually works when:

• You’re running a self-employed business, sole proprietorship, or single-director corporation
• You have fewer than 20–30 transactions per month
• You don’t have employees (contractors only, properly classified)
• You’re in a single revenue stream with straightforward sales
• You only collect GST (not PST)
• You’re genuinely willing to spend 3–5 hours per month on it — consistently, not in a year-end panic
• You use proper accounting software (not spreadsheets)

You should seriously consider professional help when:

• You hire your first employee — payroll compliance errors are among the most expensive to fix
• You start collecting PST — it adds a second layer of filing, audit exposure, and categorization complexity
• You cross $1M in BC payroll — Employer Health Tax obligations kick in, and the calculation isn’t straightforward
• Your transaction volume exceeds 50+ per month — the time cost usually exceeds what you’d pay someone
• You have inventory — COGS tracking, valuation methods, and shrinkage all require consistent application of accounting standards
• You’re in a regulated industry (real estate, cannabis, money services) — the compliance burden is significantly higher
• You have foreign transactions — currency conversion, withholding tax, and cross-border reporting requirements multiply your bookkeeping complexity
• You’re consistently behind by more than one month

The signals that DIY has already failed:

• You’re “batching” everything at year-end (this is not bookkeeping — it’s data entry under pressure)
• Your bank balance and your books don’t match, and you don’t know why
• You’ve received a CRA letter about a discrepancy
• You’ve missed a GST or payroll remittance deadline
• You have a shoebox, a folder, or a drawer that you call your “filing system”
• Your accountant charges you more every year because the cleanup takes longer

If two or more of those signals sound familiar, you’ve already passed the threshold.

What cloud accounting systems actually handle (and what they don’t)

There’s a third option most articles skip: using cloud accounting software and doing a semi-DIY approach.

FreshBooks, QuickBooks Online, Xero, and other cloud accounting systems are genuinely good at certain things:

What automation handles well: – Bank feed imports — transactions pull in automatically from your bank – Receipt scanning — snap a photo, the software extracts vendor, amount, and date – Recurring transaction templates — set up monthly entries once – Basic categorization — after you train it, the software learns to categorize similar transactions – Invoice generation and payment tracking – Basic GST calculation on sales invoices

What automation doesn’t handle (and people assume it does): – Correct account categorization — the software guesses, and it guesses wrong often enough to matter. A subscription categorized as “Office Supplies” instead of “Software” won’t break anything today, but across hundreds of transactions it creates a mess. – GST input tax credit eligibility — not every expense with GST on the receipt qualifies for an ITC. Meals and entertainment, personal-use vehicle expenses, and certain memberships have special rules. The software doesn’t know those rules. – PST self-assessment — when you buy from an out-of-province supplier who didn’t charge PST, you may owe it yourself. No software catches this automatically. – Payroll edge cases — statutory holiday pay, overtime calculations, vacation pay accrual, and termination pay all have British Columbia-specific rules that differ from other provinces. – Year-end adjustments — amortization, prepaid expenses, accrued liabilities, and work-in-progress all require journal entries that automation doesn’t generate. – Reconciliation review — the software can match transactions, but someone still needs to investigate the unmatched ones.

In our experience, a cloud accounting system with bank feeds and receipt scanning does save real time on data entry. But the time the software saves is mostly on data entry — the part it doesn’t handle is the part that actually matters for compliance.

If you use these tools properly — meaning you review categorizations weekly, reconcile monthly, and actually understand what the software is doing — they’re a legitimate middle path. If you use them as a “set it and forget it” system, you’re building a more organized mess.

What goes wrong

We do a lot of cleanup work. It’s not the most enjoyable part of our practice, but it’s relevant here because the same mistakes come up over and over.

Scenario 1: The Year-End Scrambler A small business owner runs everything through one bank account, does no bookkeeping during the year, and drops off a year’s worth of bank statements in February expecting a tax return by April. The books need to be built from scratch. Every transaction needs to be reviewed, categorized, and supported. This typically takes several times longer than if the books had been maintained monthly — and costs accordingly.

Scenario 2: The Incorrect GST Filer The owner filed their own GST returns but claimed ITCs on exempt items, or didn’t claim ITCs they were entitled to, or used the wrong reporting period. CRA reassesses. Now we’re amending returns, calculating interest, and sometimes negotiating penalties. The cost of fixing two or three years of incorrect GST filings can easily run into the thousands — on top of whatever CRA assesses in interest and penalties.

Scenario 3: The Payroll Mess An owner started with contractors, shifted to employees, and didn’t change how they were paying people. No source deductions, no T4s, no EI or CPP remittances. CRA’s Trust Examinations group treats payroll non-compliance seriously because those are trust funds — money you withheld (or should have withheld) from employees that belongs to CRA. Directors can be held personally liable for unremitted payroll amounts — this is one area where the consequences extend beyond the corporation. The cleanup involves filing amended returns, calculating retroactive deductions, and significant penalties.

Scenario 4: The PST Surprise A service business didn’t realize their services became PST-taxable (or will become taxable under the Oct 2026 expansion). They collected nothing. Now they owe PST on revenue they already spent, plus penalties. BC’s PST penalty relief provisions are generally more limited than CRA’s Taxpayer Relief Program for federal taxes.

The pattern across all four scenarios

In every one of these scenarios, the cost of cleanup is several multiples of what ongoing monthly bookkeeping would have cost. That’s the part people don’t factor in when they decide to “save money” by doing it themselves.

The October 2026 PST expansion

This is going to catch a lot of BC businesses off guard.

Based on the 2025 BC Budget, the provincial government plans to expand PST effective October 1, 2026, to cover specific professional services that are currently exempt — including accounting services, architectural services, engineering, non-residential real estate, and security services. If you provide any of these services in British Columbia, you need to determine whether you’re affected. (Check the BC Ministry of Finance website for the latest implementation details, as the scope or timing may change before October.)

If your business only collected GST until now, and your services become PST-taxable in October, your bookkeeping just got harder:

• Register as a PST collector with the BC Ministry of Finance
• Configure your accounting software to track PST separately from GST
• Figure out what’s taxable and what’s exempt under the new categories (the rules aren’t always intuitive)
• File PST returns on a monthly, quarterly, or annual schedule depending on your volume
• Determine whether PST applies to services delivered to out-of-province clients

If you were managing your own bookkeeping with just GST, adding PST on top of it is a real jump in complexity. Talk to your accountant or a Chartered Professional Accountant before October. Getting the setup right from day one is far cheaper than fixing it after the fact.

How to tell if your current approach is working

Whether you do your own books, use software, or have a professional, here’s a quick self-assessment:

1. Are your books reconciled within 30 days? If your last reconciled month is more than 30 days ago, you’re falling behind.

2. Do you know your actual profit (not your bank balance) right now? Your bank balance is not your profit. If you can’t state your net income for the current year within a reasonable margin, your books aren’t telling you what you need to know.

3. Are your GST returns filed on time and matching your books? Pull your last GST return. Does the revenue on it match the revenue in your accounting software for the same period? If not, something is wrong.

4. Can you produce a balance sheet that balances? Not just an income statement — a balance sheet. If you don’t know what that means or your software can’t generate one, your books are incomplete.

5. Is your accounts receivable accurate? Do the amounts showing as outstanding actually match what customers owe you? Stale AR is one of the most common signs of neglected books.

6. Do you have a consistent system for receipts and documentation? CRA can ask for supporting documentation for any expense you’ve claimed. “I think I have it somewhere” is not a system.

If you answered “no” to two or more of these, your current approach isn’t working — regardless of who’s doing the work.

Bookkeeper, accountant, CPA: what’s the difference?

This comes up a lot, so here’s the short version:

Bookkeeper: Records day-to-day financial transactions, reconciles bank accounts, manages accounts payable and receivable, and produces basic financial reports. In Canada, “bookkeeper” is not a regulated title — anyone can call themselves one.

Accountant: Prepares financial statements, handles more complex analysis, may prepare tax returns. In BC, under the Chartered Professional Accountants Act, the titles “Chartered Professional Accountant,” “Professional Accountant,” and “CPA” (as well as legacy designations CA, CGA, and CMA) are restricted. The word “accountant” alone is not restricted — anyone can use it.

CPA (Chartered Professional Accountant): The CPA designation is licensed by CPA BC, and holders are subject to professional standards, continuing education requirements, and a code of ethics. CPAs can audit financial statements, provide assurance services, and represent you before CRA. They carry professional liability insurance.

For ongoing bookkeeping, a good bookkeeper is often the right fit. You don’t need a CPA to categorize transactions and reconcile your bank account. But for tax planning, CRA disputes, and financial statement preparation, you want a Chartered Professional Accountant. Some firms (including ours) offer both accounting services under one roof, which keeps the day-to-day work and the year-end tax work aligned.

Frequently asked questions

How much time does bookkeeping actually take per month?

For a simple self-employed business in BC with 20–30 transactions per month, no employees, and one bank account, we typically see clients spending 3–5 hours per month when they’re doing it properly. That includes categorizing transactions, reconciling your bank account, filing receipts, and reviewing your reports. Add employees, PST, or multiple revenue streams and you’re looking at 8–15 hours monthly. The time isn’t just data entry — it’s the research when you don’t know how to categorize something, the CRA website visits to check a filing deadline, and the troubleshooting when your books don’t balance.

Can I just do my bookkeeping once at year-end?

You can, but you shouldn’t. Year-end “bookkeeping” is really just data entry — you’re recording what happened, not managing your finances. You lose all visibility into your business performance during the year. You can’t make informed decisions about spending, pricing, or tax planning if you don’t know your numbers until March. More practically, if you file GST quarterly, you need current books every quarter anyway. And if CRA asks for records mid-year, “I haven’t done my books yet” is not an acceptable answer.

Do I need a bookkeeper if I use QuickBooks Online?

QuickBooks Online is a tool, not a bookkeeper. It automates transaction imports and basic categorization, but it doesn’t know your business. It doesn’t know that a payment to “Amazon” might be office supplies, inventory, or a personal purchase. It doesn’t know which expenses qualify for GST input tax credits, and it doesn’t prepare year-end adjusting entries. Someone still needs to review, correct, and complete the work. Whether that someone is you or a professional depends on the complexity factors discussed above.

What records does CRA require me to keep?

CRA requires you to keep all financial records and supporting documents that allow them to verify your income, deductions, credits, and tax obligations. This includes: sales invoices, purchase receipts, bank statements, cancelled cheques, credit card statements, contracts, and any worksheets or calculations you used to prepare your returns. Per CRA’s guidance on record keeping, records must be kept for six years from the end of the tax year they relate to. They must be kept in an orderly fashion at your place of business (or a designated location that CRA has approved). Electronic records are acceptable as long as they’re readable and accessible.

When should I stop doing my own bookkeeping and hire someone?

The clearest trigger is when your books are consistently more than one month behind. Other signals: you hired your first employee, you started collecting PST, your transaction volume makes it impossible to stay current in under 5 hours per month, or your Chartered Professional Accountant is spending significant time at year-end cleaning up your books before they can prepare your tax return. If your accountant’s year-end bill keeps going up and they’re citing “additional time to organize records,” that’s a polite way of saying your bookkeeping isn’t working.

Related articles

• Bookkeeping Services in Metro Vancouver — what professional bookkeeping includes, how it works, and what to look for in a provider.
• GST Registration for BC Small Businesses — when you need to register, how to file, and common mistakes to avoid.
• Self-Employed Tax Filing in British Columbia — tax obligations for sole proprietors and self-employed individuals in British Columbia.

Next step

Not sure whether your current bookkeeping approach is keeping up? As a Chartered Professional Accountant firm, we can help you figure out where you stand — whether that’s improving your DIY setup, moving to professional bookkeeping, or just getting a second opinion on your compliance obligations.

Book a free consultation to discuss your situation.

Disclaimer: This article is for general informational purposes only. It does not constitute professional accounting, tax, or legal advice and should not be relied upon as a substitute for advice tailored to your specific circumstances. Every business situation is different. For advice specific to your circumstances, please consult directly with a qualified CPA. AL Accounting Inc. is not responsible for any actions taken based on the information in this article.

This article is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Tax rules change frequently. Consult a qualified professional regarding your specific situation.