Starting a business in Canada is one thing. Running it every day — keeping your books current, staying compliant with CRA, managing cash flow, and maintaining client relationships — requires a different set of habits. This guide covers the ongoing operational essentials for Canadian freelancers and self-employed individuals.
Monthly Financial Routine
Spending 45–60 minutes on bookkeeping at the end of each month prevents year-end chaos and keeps your records audit-ready. The monthly checklist:
- Issue outstanding invoices and record all client payments received
- Categorize all business transactions in your accounting software
- Photograph and file receipts — scan at the time of purchase, not in batches
- Reconcile your bank account — every statement transaction should match a software entry
- Transfer 25–30% of net revenue to your tax savings account
- Review revenue against the $30,000 GST/HST threshold if you are not yet registered
GST/HST Compliance (If Registered)
Most freelancers with revenues under $1.5 million file GST/HST annually:
- Payment deadline: April 30 — same as income tax payment
- Filing deadline: June 15 — same as T1 filing for self-employed
- Collect the correct rate on Canadian client invoices (Ontario 13%, Alberta 5%, Nova Scotia 14%, etc.)
- Zero-rate invoices to international clients (0%)
- Track ITCs monthly — GST/HST paid on business expenses is recoverable
Tax Instalment Obligations
Quarterly tax instalments are required when net tax owing (income tax + CPP) exceeds $3,000 in the current year and either of the two prior years. 2026 instalment dates:
- March 15
- June 15
- September 15
- December 15
Pay through your bank’s CRA bill payment or CRA My Account. Use the prior-year method (pay ¼ of last year’s total) to avoid interest.
Annual Obligations
| Obligation | When |
|---|---|
| RRSP contribution deadline (for prior year) | First 60 days of new year (~March 1) |
| Pay income tax + GST/HST balance | April 30 |
| File T1 return + T2125 | June 15 (self-employed) |
| File annual GST/HST return | June 15 (annual filers) |
| Renew provincial business name registration | Every 5 years (Ontario, Quebec); annually (Alberta); indefinite (BC) |
Client Relationship Management
Ongoing business operations include client management that directly affects cash flow:
- Invoice promptly — issue invoices immediately after project completion or on the agreed billing date, not weeks later
- Follow up on overdue invoices — email reminder the day after the due date, again at day 7, then by phone if still unpaid
- Collect deposits on new projects — 25–50% upfront on projects over $1,000 reduces non-payment risk
- Keep contracts current — revisit contract terms when client work scope or billing structure changes significantly
Record Keeping Requirements
The CRA requires you to keep all business records for 6 years from the end of the last tax year to which they relate. Maintain:
- All invoices issued (with invoice number, client, date, amount)
- All business expense receipts (digital copies acceptable)
- Bank statements and accounting software records
- GST/HST returns and supporting documentation
- Vehicle mileage logbook (if claiming vehicle expenses)
Frequently Asked Questions
How do I know if my business is actually profitable?
Run a profit and loss report from your accounting software monthly. Net income = gross revenue minus all deductible expenses. Compare to your prior month and prior year same month. Track your effective hourly rate: net income ÷ hours worked. If your effective rate is declining, either your rates need to increase or your expenses need to be reviewed.
When should I review my pricing?
Annually at minimum — inflation, skills growth, market rate changes, and the addition of more overhead (insurance, accounting fees) all justify price reviews. Many Canadian freelancers set rates based on early-career benchmarks and fail to adjust for years. A 10–15% increase per year compounded is not unusual for experienced professionals who consistently deliver value.
What does it mean if I receive a CRA letter?
CRA letters range from routine notices (assessment confirmation, RRSP room notification) to specific inquiries (asking for documentation on a deduction) to formal audit notifications. Read carefully and respond within the specified deadline. For routine notices, no action is needed. For inquiries requesting documentation, provide exactly what is asked within the timeframe. For audit notifications, engage a CPA experienced with CRA audits before responding.