Making Your Tech Startup Work for You 

When you launch a tech company, it’s easy to focus on product, pitching, or fundraising – and leave “back-office stuff” for later.

But that approach can cost you.

From missed tax credits to messy financials during due diligence, the wrong systems (or no systems) can hold you back when it matters most. The good news? Setting things up properly doesn’t have to be overwhelming – and it pays off fast.

Here’s what every Canadian (and BC-based) tech startup should have in place from day one.

  1. Choose a Cloud Accounting Platform

If you’re still using spreadsheets or a shoebox of receipts – it’s time to upgrade.

We recommend Xero with Hubdoc integration:

  • ✅ Track income, expenses, and cash flow in real time,
  • ✅ Automate receipt capture and document storage,
  • ✅ Simplify collaboration with your accountant or bookkeeper,
  • ✅ Prepare clean records for investors, lenders, or grants, and
  • ✅ Stay SR&ED audit-ready with digital logs and cost breakdowns.

Why it matters: Most grants and tax credits (like SR&ED) require clean, accessible financial data. Cloud-based systems ensure your startup is both agile and compliant.

  1. Register for GST/HST (and PST in BC)

Even if you’re pre-revenue, you may be legally required – or strategically motivated – to register for sales tax accounts.

GST/HST

You must register for GST/HST once your worldwide taxable supplies exceed $30 000 either (a) in a single calendar quarter or (b) over the four previous consecutive calendar quarters. Registration is due by the first day of the month after you cease to be a small supplier (small suppliers have worldwide revenue below $30,000).

Benefits of registering early:

  • Charge the correct tax on services (e.g., software subscriptions, consulting), and
  • Claim Input Tax Credits to recover GST/HST paid on business expenses.

Invoices must include:

  • GST/HST number,
  • Tax amount (listed separately), and
  • Clear description of the product/service.

BC PST

Located in B.C.? You must register to collect PST as soon as you sell (or lease) taxable goods, software – including software as a service (SaaS) – or taxable services in the ordinary course of business; no dollar-threshold applies to in-province sellers.

Located outside B.C.? Remote sellers of digital software/telecom services must register once B.C. revenues exceed $10 000 in the previous 12 months.

Invoices should also show:

  • PST registration number,
  • PST charged (separate from GST), and
  • Breakdown of taxable vs non-taxable items.

  1. Set Up a Payroll System (Even for One Hire)

If you plan to hire employees – or even if you’re paying yourself – setting up a proper payroll program is essential.

You’ll need to:

  • ✅ Register a CRA Payroll Account,
  • ✅ Deduct and remit income tax, CPP, and EI,
  • ✅ Issue T4 slips annually,
  • ✅ Issue ROEs as needed, and
  • ✅ Track all compensation, benefits, and bonuses.

We recommend Wagepoint for startups:

  • Automates payroll tax calculations & remittances,
  • Issues ROEs, T4s, and direct deposits, and
  • Integrates with Xero for seamless reconciliation.

Important: SR&ED claims require proof of time tracking, compensation, and CRA remittances – a proper payroll system makes this simple.

  1. Separate Your Business and Personal Finances

Open a dedicated business bank account and credit card as soon as possible.

Why?

  • Keeps your records clean for tax and audit purposes,
  • Simplifies reconciliations,
  • Makes it easier to identify deductible expenses, and
  • Supports business credit history as you grow.

  1. Build the Right Chart of Accounts (COA)

A startup-specific Chart of Accounts prepares you for programs like SR&ED, IRAP, and provincial innovation grants. We include a custom COA for tech companies in our onboarding process.

It tracks:

  • Eligible R&D costs,
  • Software subscriptions,
  • Investor-related legal fees,
  • Marketing and launch expenses, and
  • Contractor and consultant payments.

 Let’s Get You Set Up Right

At Virtual Heights Accounting, we help tech startups launch and scale with clarity and compliance. Our team specializes in setting up financial systems that work for:

  • SR&ED & IRAP eligibility,
  • Investor readiness,
  • Cloud accounting,
  • Tax filing and year-end, and
  • Contractor and payroll compliance.

Get Your Free Technology Startup Playbook

If you’re serious about launching your company the right way, download our Technology Startup Playbook. It’s packed with practical guidance for Canadian founders – especially those building in British Columbia – including insights on incorporation, tax strategy, grants, SR&ED, and more.

[→ Download the Playbook Here]

Need more help? At Virtual Heights Accounting, we specialize in supporting tech entrepreneurs with the financial systems and strategy they need to grow. From cloud accounting and SR&ED tax credits to grant readiness and year-end planning, we help innovative companies scale with clarity and compliance, right from day one. You can book us for a SR&ED call here: SR&ED Intro call. You can also visit our Contact Us page.