Bookkeeping for Montreal businesses

Two tax accounts, one return to Quebec

Most provinces give a bookkeeper either one harmonised tax or a federal tax plus a provincial one that goes somewhere else. Quebec does something in between. The GST and the QST are separate taxes with separate rates and separate recovery, but for most Quebec businesses Revenu Québec administers both, so they are reported on the same schedule to the same authority.

In the ledger that means two liability accounts, not one. The GST paid on purchases comes back as an input tax credit; the QST paid comes back as an input tax refund, and the two are tracked line by line because they do not always move together. Coding a supplier bill as a single blended tax amount is the most common error in a Montreal file, and it only surfaces when the return does not balance. Input tax credits covers what is recoverable on the federal side.

Registration comes before the first invoice

GST registration becomes mandatory once taxable sales pass $30,000 in four consecutive calendar quarters, and a business registered for GST in Quebec is normally registered for the QST at the same time. The filing period follows revenue: annual at $1.5 million or less, quarterly up to $6 million, monthly above that. A new Montreal company that crosses the threshold mid-year and keeps invoicing without tax ends up paying the tax it never charged, so the check belongs in the monthly close, not the year-end.

Payroll entries that feed two sets of slips

Every Quebec pay run produces more journal lines than one elsewhere. QPP replaces CPP, QPIP premiums sit alongside a reduced EI rate, and Quebec income tax is withheld and remitted to Revenu Québec while federal tax goes to the CRA. The employer’s own costs — its share of the deductions, the Health Services Fund contribution and CNESST premiums — are accrued as payroll runs rather than recognised when a bill arrives. Kept that way, the T4s and RL-1s at the end of February agree with the books without a reconstruction exercise. The Montreal payroll service runs the deductions themselves.

Owner draws and the shareholder loan account

Owners of small Montreal companies often pay personal costs from the business account and sort it out later. The ledger records those amounts against the shareholder loan account, and the timing matters: a loan not repaid within one year after the corporation’s year-end is generally taxed as the owner’s income. Because the owner files both a T1 and a TP-1, an unplanned inclusion hits both returns. Keeping the account current each month turns that into a decision the owner makes, with a salary or dividend declared in time, rather than a surprise at filing. The shareholder loan tracker shows the running balance.

A year-end that feeds two corporate returns

The last month of the fiscal year is where monthly bookkeeping earns its fee. Accruals for bonuses and unpaid bills, the inventory count where there is stock, capital purchases separated from repairs, and a final reconciliation of the GST and QST accounts against what was actually filed with Revenu Québec. The closed books then support two corporate returns, the federal T2 and the Quebec CO-17, and both have to tell the same story. A trial balance that was adjusted after the fact for one return and not the other is how the two drift apart. Closing once, cleanly, avoids it. The year-end document checklist lists what to gather.

What each Montreal industry does to the ledger

The same monthly engagement looks different depending on the business. A restaurant needs daily POS totals, card deposits and cash counts matched before the month can close. An apparel brand lives or dies on inventory costing, with import duties added to the cost of the goods. An online store records gross sales and fees rather than the net payout that lands in the bank. A contractor needs job costing and holdbacks tracked by project. A tech startup needs salaries tagged to development work from the first month, because that is what supports an SR&ED claim later.

Catching up a file that has fallen behind

A lot of Montreal owners arrive with a year or two of unfiled sales tax returns and a shoebox of receipts. The catch-up runs oldest period first: bank and card accounts reconciled, GST and QST recalculated from the actual transactions, and returns filed in order so that interest stops growing. Records have to be kept for six years, so the reconstruction is also a chance to put them somewhere they can still be found when the six years are up. Catch-up work explains how the work is sequenced.

Books kept in English, from Abbotsford

EverStone is a one-CPA firm in Abbotsford, British Columbia, and keeps Montreal books remotely. There is no Montreal office and no local staff. Bank and card feeds arrive electronically, documents come through a secure upload link, and the file sits in cloud accounting software you hold your own login to. EverStone works in English: the monthly questions, the reports and the year-end conversation are all in English. One CPA keeps the monthly ledger and prepares the year end from it.

Keeping the books accurately and knowing what they mean are different jobs, and it is worth being deliberate about whether books are still the binding constraint.