What Records Should a Small Business Keep?

Good records protect you from guessing.

They show what you sold, what you spent, what you collected, what you paid, what you owe, and what happened if a number is questioned later. Without records, bookkeeping becomes memory work. Tax season becomes cleanup. A CRA request becomes stressful because the proof is scattered.

A small business does not need a complicated filing system. It needs records that are complete, readable, backed up, and easy to connect to the numbers in your books.

What Counts as a Business Record?

The CRA says records are anything that contains financial information, including ledgers, journals, financial statements, returns, correspondence, charts, and tables.

In practice, if a document explains business income, expenses, assets, liabilities, tax filings, payroll, GST/HST, ownership, contracts, or major business decisions, keep it.

Records can be paper or electronic. They can come from accounting software, point-of-sale systems, online payment platforms, bank accounts, spreadsheets, email, contracts, supplier portals, payroll systems, and tax software.

The format matters less than whether the record is readable, complete, and available when needed.

Keep Income Records

Income records show where business money came from.

Keep sales invoices, receipts issued to customers, cash register summaries, e-commerce reports, payment processor reports, deposit records, bank statements, customer contracts, subscription records, and any notes that explain unusual payments.

If you receive money through several channels, such as cash, e-transfer, debit, credit card, marketplace payouts, cheques, or online payment processors, make sure each channel can be reconciled to the bank account.

The goal is to be able to answer a simple question: if money entered the business, where did it come from and what was it for?

Keep Expense Records

Expense records support the costs you claim.

Keep supplier invoices, receipts, credit card statements, bank statements, loan interest records, lease payments, insurance documents, professional fees, software subscriptions, advertising invoices, shipping records, equipment purchases, repair bills, and office expenses.

A bank or credit card statement alone may show that money left the account, but it may not explain what was purchased or whether it was for business. Keep the receipt or invoice that describes the transaction.

If an expense has both business and personal use, keep the calculation that supports the business portion.

Keep Bank, Credit Card, and Loan Records

Financial account records help connect your bookkeeping to real money movement.

Keep monthly bank statements, credit card statements, cancelled cheques where available, line of credit statements, loan agreements, repayment schedules, merchant statements, and payment processor summaries.

These records are useful for reconciliations. They also help explain transfers, owner contributions, shareholder loans, refunds, chargebacks, loan payments, deposits, and withdrawals.

If the business uses personal accounts during startup, label the business transactions carefully and move to separate business accounts as soon as practical.

Keep GST/HST Records if They Apply

If your business is registered for GST/HST, your records need to support what you collect, what you pay, and what you claim.

The CRA says GST/HST records must describe related goods and services in enough detail to determine whether GST/HST applies. Your records must let you calculate GST/HST collected, paid, refunded, rebated, or deducted from net tax.

If you claim input tax credits, keep copies of purchase invoices or receipts for business purchases. Those documents need enough detail to support the claim.

Keep sales invoices, purchase receipts, GST/HST returns, filing confirmations, payment confirmations, adjustment notes, bad debt records, and any calculation used to prepare the return.

Keep Payroll Records if You Have Workers

Payroll records are separate from general expense records.

If you deduct income tax, CPP contributions, or EI premiums from amounts paid, the CRA says payroll records have to include employee hours worked and the amounts withheld for CPP, EI, and tax.

You also need to keep records such as employee TD1 forms, information slips issued, returns filed, registered pension information where relevant, payroll registers, remittance confirmations, employment agreements, vacation pay records, taxable benefit calculations, and records of employment where required.

Payroll can also involve provincial employment standards, workers’ compensation, and Quebec-specific requirements if employees work in Quebec. Confirm the rules that apply in your province or territory.

Keep Corporate and Ownership Records

If your business is incorporated, you need more than tax receipts.

Keep articles, certificates, annual filings, corporate registers, shareholder records, director records, resolutions, minutes, share transfers, dividends, loans, major decisions, and any documents that show who owns and controls the corporation.

These records are often needed for banks, investors, lawyers, accountants, buyers, lenders, and government filings.

If your corporation is inactive, do not assume record-keeping no longer matters. Corporations may still have filing and record obligations.

Keep Contracts, Licences, and Insurance Documents

Operational records explain the rights and responsibilities around the business.

Keep customer contracts, supplier agreements, leases, contractor agreements, statements of work, change orders, warranties, service agreements, insurance policies, licences, permits, professional registrations, financing agreements, privacy documents, and renewal notices.

These records may not all go into your tax return, but they explain business obligations and can be needed if there is a dispute, audit, claim, renewal, sale, or financing request.

Store signed versions where you can find them. Drafts are useful only if you can tell which version was accepted.

Keep Asset, Vehicle, and Inventory Records

Some business purchases affect more than one tax year.

Keep records for equipment, computers, tools, vehicles, furniture, leasehold improvements, machinery, property, and other assets. The record should show the purchase date, cost, tax paid, financing, business use, repairs, sale or disposal, and any depreciation or capital cost allowance calculation.

If you use a vehicle for business, keep mileage logs, fuel and repair receipts, insurance records, lease or financing documents, and the calculation for business use.

If you carry inventory, keep purchase records, sales records, counts, shrinkage notes, write-offs, and year-end inventory values.

Keep Electronic Records in a Usable Format

Digital storage is fine, but it has to work when records are requested.

The CRA says computerized accounting records and third-party records must be available on request. CRA guidance also says electronic records need to be in an electronically readable and usable format so they can be processed on CRA equipment.

If you scan paper documents, make sure the image is readable and does not hide details. If you use cloud software, know how to export the records if you change providers or close the account.

Back up records in more than one place. Losing access to a software subscription should not mean losing the business history.

Know How Long to Keep Records

The CRA says records should generally be kept for six years from the end of the last tax year they relate to, unless the CRA gives permission to destroy them earlier.

Some records should be kept longer because they support future years. That can include asset records, property records, shareholder loan history, contracts still in effect, corporate records, loss carryforward support, and documents tied to an unresolved dispute or audit.

If you are unsure, keep the record and ask your accountant before destroying it.

Remember That You Are Still Responsible

Hiring a bookkeeper, accountant, payroll provider, app, or software company does not remove your responsibility for records.

The CRA says you are responsible for making sure adequate records are kept even if a third party keeps the records for you.

That means you should know where records are stored, who has access, how backups work, and how to export them. You should also keep copies of filings, confirmations, and key documents instead of assuming someone else will always have them.

Good outside help makes records easier to manage. It should not make you blind to where the records are.

Build a Simple Filing System

A useful system is one you will actually maintain.

Separate income, expenses, bank and credit card statements, GST/HST, payroll, contracts, corporate records, licences, insurance, assets, vehicle records, and tax filings.

Use consistent file names with dates, supplier or customer names, and short descriptions. Reconcile accounts monthly if you can. Attach receipts to transactions in your accounting software when possible. Review uncategorized transactions before they pile up.

Do not wait until tax season to discover missing receipts. Ten minutes each week is easier than ten hours months later.

Before You File Anything Away

Before storing a document, ask whether it explains income, expenses, tax, payroll, GST/HST, ownership, assets, contracts, licences, insurance, or a business decision.

If it does, keep it where you can find it. The best record system is not the one with the most folders. It is the one that lets you prove the numbers without rebuilding the business from memory.

Sources

• https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc188/keeping-records.html
• https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/keeping-records/gst-hst-payroll-records.html
• https://www.canada.ca/en/revenue-agency/news/cra-multimedia-library/businesses-video-gallery/managing-books-and-records.html
• https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4001/employers-guide-payroll-deductions-remittances.html