Tech startup accountant in Vancouver

Founders who have not yet incorporated can start with incorporating versus staying a sole proprietor in BC. For the national rules on first filings, see the starting a business hub.

A research claim that pays in a loss year

Most Vancouver startups spend two or three years losing money on purpose. The federal research program is built for that stage. A company that is a Canadian-controlled private corporation files its claim on Form T661 and can earn an enhanced credit that is refundable, so the company receives cash instead of a carry-forward it may not use for years. BC runs its own research credit on the same work, so a single set of project records feeds both claims.

The technical write-up gets the attention. The financial side decides the size. Which engineers worked on which uncertainty, for how many hours, and at what salary: that is the claim. Build it into the monthly books with project codes and a simple timesheet, and year-end becomes an extraction exercise instead of a reconstruction. The expenditure limit update explains how the enhanced rate is capped.

When the money comes from more than one place

A seed round, a federal innovation grant, a provincial program and a university partnership can all land in the same year. Each one needs to be labelled when it arrives. Assistance tied to research work generally reduces the expenditures the SR&ED credit is calculated on, so a grant booked as ordinary revenue inflates the claim. Equity money has no effect on the base, but a convertible note or SAFE has its own accounting and shows up on the balance sheet investors review.

Keep a register: source, amount, the project it funded, the period it covers and any repayment conditions. It takes minutes a month and saves a painful review later. Investors and lenders will ask for it too, and the Vancouver fractional CFO page covers what a board pack needs.

BC PST on software, and GST on everything else

BC is one of the few provinces where a software company deals with a provincial sales tax as well as a federal one. PST at 7% applies to software sold to BC customers, including many subscription and downloaded products, and a Vancouver seller of software generally has to register and collect it. GST at 5% applies separately, with its own registration once taxable sales pass $30,000 in four consecutive calendar quarters. Many exports of services and intangibles to non-residents are zero-rated for GST.

Two taxes mean two returns, two sets of rules and two places a billing system can be wrong. Tag every customer by location in the subscription platform from day one. The BC PST guide sets out what is taxable, and GST filing in Vancouver covers the federal side.

Paying founders and early staff

Founders in Vancouver often take very little in the first years, then shift to salary once a round closes. A salary paid for time spent on qualifying development can form part of the SR&ED wage base; a dividend never does. Salary also runs through payroll: CPP, EI, source deductions and a T4 by the last day of February. BC adds WorkSafeBC coverage for staff and, once payroll passes the exemption, the Employer Health Tax.

Early hires usually get options instead of market pay. In a CCPC, the option benefit is generally taxed when the employee sells the shares rather than at exercise, and it is reported on the T4 for that year. Keep a clean record of each grant, exercise price and exercise date. A founder advance or an expense paid personally belongs on a shareholder loan tracker, because a balance owed to the company and not repaid within one year after its year-end is generally taxed as income.

Year-end when a raise is coming

A priced round brings due diligence, and due diligence reads the financial statements. Revenue recognition on annual subscriptions, deferred revenue, capitalised development costs and the SR&ED receivable all need to be right before an investor sees them. A startup that closes its books monthly can answer data-room questions in days. One that closes once a year spends the raise fixing history. See financial statements in Vancouver.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 corporate return with Form T661 and the SR&ED schedules
• Project coding and time tracking for the research claim
• Grant and funding register kept current
• GST and BC PST registration and filings
• Founder pay, payroll and stock option records
• Monthly close and investor-ready statements

Fixed fees, fully online

EverStone is a CPA firm in Abbotsford, an hour up the Fraser Valley, serving Vancouver founders entirely online on Pacific time: video calls, a secure upload link and e-signature. Monthly bookkeeping starts from $300 a month with GST filing included. Fractional CFO support starts from $2,500 a month. The research claim and the T2 are quoted after a free consultation. See what it costs.

Remote startup accounting from Abbotsford

EverStone is a sole practitioner CPA firm based in Abbotsford, serving Vancouver owners entirely online. There is no Vancouver office and no local staff. Meetings are held by video or phone, documents come in through a secure upload link and are signed by e-signature, and no visit is required at any point. Project time, funding records and both sales tax accounts are kept in the same monthly file, so the research claim and the returns agree.