Tech startup accountant in North Vancouver

Founders who have not incorporated yet can start with incorporating versus staying a sole proprietor in BC; the enhanced refundable research credit described here needs a Canadian-controlled private corporation.

The startup file covers the T2 with Schedule 1 and Schedule 50, Form T661, the small business deduction, payroll with T4 slips, GST returns with input tax credits, and the PST return where software is sold in BC.

SR&ED when there is no profit yet

Early-stage companies lose money by design, and the federal research incentive is built for that stage. A CCPC files Form T661 with its T2, and the enhanced credit is refundable. That means the company can receive cash for qualifying work rather than a credit it might not use for years. For a two-founder company burning savings, that refund can fund the next stretch of development.

The technical narrative gets the attention, but the numbers decide the size of the claim. Who worked on which technical uncertainty, for how many hours, at what pay, is the claim. A project code on every timesheet and every contractor invoice, recorded monthly, turns the year-end into a summary. Leaving it until the T2 is due turns it into memory work. The SR&ED expenditure limit update explains the current cap.

Grants, SAFEs and money from several places

A young company can receive a government grant, a founder loan, a friends-and-family round and a SAFE in the same twelve months. Each is accounted for differently. Government assistance tied to research generally reduces the expenditures SR&ED is calculated on, so a grant recorded as sales overstates the claim. Founder loans are liabilities of the company. Equity is share capital, and a SAFE or convertible note has its own treatment until it converts.

Labelling each one on arrival takes minutes. Untangling them during an investor’s due diligence takes days. A simple funding register, with the source, amount, terms and the project it supports, keeps the claim and the balance sheet consistent. A loan-balance tracker covers money moving between founders and the company.

PST on software, GST on the rest

BC charges PST on software, including many downloaded and subscription products, sold to customers in the province. A North Shore company selling software to BC businesses generally has to register for PST and collect 7%, as well as GST. It also pays PST on much of the software it buys, which is a cost rather than a credit. See the BC PST guide.

GST registration is mandatory once taxable sales pass $30,000 in four consecutive calendar quarters, and many startups register earlier to recover GST on their costs. Sales of services and intangibles to non-residents are often zero-rated. Tag every customer’s location in the billing system from the first invoice, because both taxes depend on it. GST on exports and non-residents covers the foreign side.

Paying founders and the first hires

Founders often pay themselves little or nothing at first, then move to a salary after a raise. The choice matters beyond personal tax. Salary paid for time spent on qualifying development can count towards the SR&ED claim; dividends never do. Salary runs through payroll, with CPP, EI premiums and income tax withheld and a T4 filed by the last day of February.

The first employee brings WorkSafeBC registration, BC vacation and statutory holiday pay, and a payroll account in My Business Account. Many early hires are offered stock options. The rules for options in a CCPC differ from those in a public company, so keep a clean record of each grant and exercise. The North Vancouver payroll page covers the payroll side.

Clean records before a raise

An investor’s accountant will read the statements, the share register and the minute book. Annual subscriptions recorded as revenue on day one, development costs with no consistent policy, or a share issuance that never made it into the minutes all slow a round down. A monthly close, deferred revenue handled properly and a minute book kept current make due diligence a matter of sending files. See financial statement preparation. For board reporting and runway modelling, a fractional controller starts from $1,500 a month and a fractional CFO from $2,500 a month; see contract CFO support.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• Form T661 and the SR&ED schedules with the T2
• Project codes and timesheets set up for the claim
• A funding register for grants, loans, SAFEs and equity
• GST and BC PST registration and returns
• Founder pay, payroll and option records
• Monthly close and statements an investor can read

Fixed fees, fully online

Founders reach EverStone by email first, with a video meeting when a question needs a screen. Monthly bookkeeping starts from $300 a month with GST filing included. The research claim and the T2 are quoted after a free consultation, so the fee is known before any work starts. See what it costs.

Remote startup accounting from Abbotsford

EverStone is a one-CPA firm based in Abbotsford, working with North Vancouver founders online. There is no North Vancouver location and no local staff. Questions go by email, meetings run by video, and timesheets, invoices and funding agreements come in through a secure upload link. Project time, the funding register and both sales tax accounts sit in the same monthly file, so the research claim and the returns agree.