Chart of Accounts for Canadian Small Business: Complete 2026 Guide + Template

What is a Chart of Accounts?

A Chart of Accounts (CoA) is the master list of every account used in your accounting system. It is the foundational structure that determines how every financial transaction is recorded, categorized, and ultimately reported on your financial statements.

Every transaction your business makes — every sale, expense, payment, deposit — is posted to a specific account in your CoA. If your CoA is well-designed, your financial statements give you clear visibility into where money is coming from and going. If it's poorly designed, you'll have a mess that costs hundreds of dollars in CPA cleanup fees at year-end.

This guide covers exactly how to set up a Chart of Accounts for a Canadian small business in 2026, with a downloadable template.

The Five Core Account Types

Every CoA is organized around five account types, which map directly to the two main financial statements:

Standard Canadian Account Numbering Convention

Most Canadian small businesses use a 4-digit numbering system based on the IFRS / GIFI structure:

The numbers don't matter to CRA — they matter for you and your accountant. Consistent numbering makes the books readable.

A Sample Canadian Small Business Chart of Accounts

Below is a starter CoA for a typical Canadian service business (consulting, agency, professional services). Adapt as needed.

Assets (1000-1999)

• ●1000 — Operating Bank Account (CAD)
• ●1010 — Savings Account
• ●1020 — USD Bank Account
• ●1050 — Petty Cash
• ●1100 — Accounts Receivable
• ●1150 — Allowance for Doubtful Accounts
• ●1200 — Inventory (if applicable)
• ●1300 — Prepaid Expenses
• ●1310 — Prepaid Insurance
• ●1400 — Refundable GST/HST (ITC)
• ●1500 — Computer Equipment
• ●1510 — Accumulated Depreciation — Computer Equipment
• ●1600 — Office Furniture & Equipment
• ●1610 — Accumulated Depreciation — Furniture
• ●1700 — Vehicles
• ●1710 — Accumulated Depreciation — Vehicles

Liabilities (2000-2999)

• ●2000 — Accounts Payable
• ●2100 — Visa / Credit Card
• ●2110 — Mastercard
• ●2200 — GST/HST Payable
• ●2210 — GST/HST Owing (Net)
• ●2220 — Provincial Sales Tax Payable (PST/QST/RST)
• ●2300 — CPP Payable
• ●2310 — EI Payable
• ●2320 — Federal Income Tax Withheld
• ●2330 — Provincial Income Tax Withheld
• ●2340 — WCB / WSIB Payable
• ●2350 — Vacation Pay Payable
• ●2400 — Salaries & Wages Payable
• ●2500 — Shareholder Loans
• ●2600 — Bank Loans Payable
• ●2700 — Deferred Revenue (customer deposits)

Equity (3000-3999)

• ●3000 — Common Shares
• ●3100 — Retained Earnings
• ●3200 — Dividends Declared
• ●3300 — Owner's Capital (sole prop)
• ●3310 — Owner's Draws (sole prop)

Revenue (4000-4999)

• ●4000 — Sales — Service A
• ●4010 — Sales — Service B
• ●4020 — Sales — Product Sales
• ●4100 — Consulting Revenue
• ●4500 — Late Payment Fees
• ●4900 — Sales Discounts (contra-revenue)

Cost of Goods Sold (5000-5999)

• ●5000 — Materials
• ●5100 — Direct Labour
• ●5200 — Subcontractor Costs
• ●5300 — Shipping & Freight In
• ●5500 — Inventory Adjustments

Operating Expenses (6000-6999)

• ●6000 — Salaries & Wages
• ●6010 — CPP Expense (employer)
• ●6020 — EI Expense (employer)
• ●6030 — Vacation Pay Expense
• ●6040 — Employer Health Tax (EHT)
• ●6050 — WCB / WSIB Premiums
• ●6060 — Employee Benefits
• ●6100 — Rent
• ●6110 — Utilities
• ●6120 — Internet & Phone
• ●6200 — Office Supplies
• ●6210 — Software Subscriptions
• ●6220 — Computer Hardware (under $500)
• ●6300 — Advertising & Marketing
• ●6310 — Website Hosting
• ●6320 — Professional Memberships
• ●6400 — Professional Fees — Accounting
• ●6410 — Professional Fees — Legal
• ●6420 — Bookkeeping Fees
• ●6500 — Travel
• ●6510 — Meals & Entertainment (50% deductible)
• ●6520 — Vehicle — Fuel
• ●6530 — Vehicle — Repairs
• ●6540 — Vehicle — Insurance
• ●6600 — Insurance — Business
• ●6700 — Bank Fees
• ●6710 — Credit Card Processing Fees
• ●6720 — Interest Expense (operating)
• ●6800 — Depreciation Expense
• ●6900 — Bad Debts Expense

Other Income / Other Expenses (7000-8999)

• ●7000 — Interest Income
• ●7100 — Foreign Exchange Gain
• ●8000 — Interest Expense (long-term debt)
• ●8100 — Foreign Exchange Loss

Income Tax (9000-9999)

• ●9000 — Corporate Income Tax Expense — Federal
• ●9100 — Corporate Income Tax Expense — Provincial

How to Customize Your Chart of Accounts

A good CoA balances detail (so reports are useful) with simplicity (so data entry is consistent). General principles:

• ●Group similar expenses. Don't create separate accounts for "Office Pens" and "Office Paper" — both go in "Office Supplies."
• ●Split expenses that have different tax treatments. Meals & Entertainment is 50% deductible — it must be its own account.
• ●Track revenue by product line, not by customer. Customers belong in your CRM; revenue lines belong in the CoA.
• ●Use sub-accounts for legal/regulatory tracking. Vehicle expenses, payroll deductions, and GST/HST need granular tracking for CRA.
• ●Don't over-engineer. Start lean and add accounts as a real need emerges.

GST/HST Setup in the Chart of Accounts

For HST/GST-registered Canadian businesses, set up these three accounts:

• ●2200 — GST/HST Payable: Liability account. Increases when you collect HST on sales. Decreases when you remit to CRA.
• ●1400 — Refundable GST/HST (ITC): Asset account. Increases when you pay HST on business expenses (Input Tax Credits). Decreases when you remit to CRA.
• ●2210 — GST/HST Owing (Net): Net of the above two. This is what you actually pay to CRA.

QuickBooks and Xero automate this if you enable GST/HST tracking on the company file. If your software doesn't handle it, your bookkeeper should reconcile these accounts every filing period — see our [HST Filing Deadlines guide](/blog/hst-filing-deadlines-ontario) for filing details.

Mapping Your CoA to GIFI Codes (T2 Tax Filing)

For corporate tax (T2), CRA requires that your financial data be reported using GIFI (General Index of Financial Information) codes. GIFI is essentially a standardized chart of accounts CRA uses to read your financials.

Modern accounting software (QuickBooks, Xero) handles GIFI mapping automatically — every account in your CoA is tagged with a GIFI code. When your CPA prepares the T2, they use the GIFI report rather than your CoA directly.

If you're using a non-Canadian or generic accounting software, talk to your CPA about manual GIFI mapping at year-end.

Common Chart of Accounts Mistakes

1. Using a generic US template. Most templates from US sources don't account for HST/GST, EHT, vacation pay, or GIFI mapping. 2. Too many accounts. A 200-account CoA in a small business creates inconsistent data entry — different people categorize the same expense to different accounts. 3. Too few accounts. A 15-account CoA buries everything in "General Expenses" and loses all visibility. 4. Mixing personal and business accounts. Personal vehicle gas, personal meals, owner's groceries — these need to go to a "Shareholder Loan" or "Owner's Draw" account, not to expenses. 5. Not separating Meals (50% deductible) from Entertainment events. CRA treats them differently. 6. Skipping HST/GST accounts entirely. Without these, your HST returns require manual reconstruction every quarter.

How Outsource Bookkeeping Sets Up Your CoA

For new clients, the first thing we do is review and rebuild your Chart of Accounts to match your industry, your reporting needs, and your tax obligations. We:

1. Map your existing accounts to a clean Canadian CoA structure 2. Set up GST/HST tracking with proper account flows 3. Configure GIFI codes for T2 tax filing 4. Add industry-specific accounts (e.g., construction job costing, medical OHIP reconciliation) 5. Document the CoA so any future bookkeeper can pick it up cleanly

[Book a free consultation](/contact) to get a clean, CPA-ready Chart of Accounts.

Related Resources

• ●[Monthly Bookkeeping Checklist](/blog/monthly-bookkeeping-checklist)
• ●[HST Filing Deadlines in Ontario](/blog/hst-filing-deadlines-ontario)
• ●[Tax Season 2026 Checklist](/blog/tax-season-2026-small-business-checklist)
• ●[What Does a Bookkeeper Do](/blog/what-does-a-bookkeeper-do)