The Financial Checklist for New Entrepreneurs:

Sole ProprietorBookkeepingCorporate Taxation

Dec 1

What to Do in Your First Year as a new business owner

Starting a business in Canada is exciting—especially as the year winds down and you’re reflecting on what’s next. Maybe you’re sipping a peppermint mocha, thinking, “Am I missing anything important for my business finances?” Well, you’re not alone!

December is the perfect time to get your financial ducks in a row, whether you’re a new sole proprietor or the proud owner of a fresh corporation.

Why does this matter?

Because the first year is when habits are formed, and a little proactive planning now can save you stress (and money) come tax time. Let’s break down a practical, step-by-step financial checklist for new entrepreneurs—tailored to both sole proprietors and corporations.

The Core Challenge: Navigating First-Year Finances

Many new business owners underestimate how different the financial landscape is for sole proprietors versus corporations. Both need to budget, track expenses, and register for GST if they cross the $30,000 threshold—but taxes, year-ends, and how you pay yourself are very different.

The biggest first year financial mistakes new entrepreneurs make? Not saving for taxes, missing GST registration, and not getting professional advice early.

Step-by-Step Financial Checklist

for New Sole Proprietors & Corporations

1. Budgeting & Tracking Expenses (Everyone!)

Set up a simple budget: Use a spreadsheet or accounting software to track income and business expenses for startups.
Separate business and personal accounts: This makes business budgeting for startups and tax time much easier.
Review monthly: Regular check-ins help you spot issues early and adjust your budgeting strategies for first year business owners.

2. GST Registration & Compliance

Know the $30,000 rule: If your revenue exceeds $30,000 in a calendar quarter or over four consecutive quarters, you must register for GST. Don’t wait—register as soon as you hit this threshold or even before. This is a key step in GST for new business owners.
Track GST collected and paid: Set aside GST collected so you’re not caught short at remittance time.

3. Taxes: Sole Proprietors vs. Corporations

Sole Proprietors:

Tax deadline: Your business income is reported on your personal tax return, due April 30 (June 15 is filing deadline, but taxes owed are due April 30). This is a crucial tax deadline for new sole proprietors in Canada.
Save for taxes: Set aside 25-30% of your net income from day one. This is the best way to avoid surprises and is a top tip for saving for taxes as a sole proprietor.
Track all business expenses: Every receipt counts for small business tax planning.

Corporations:

Set your year end: Work with an accountant to set up your corporation’s year end. This impacts when your taxes are due and how you plan cash flow.
How to pay yourself: Don’t just transfer money—learn how to pay yourself from your corporation (salary, dividends, or both) and the tax implications.
Professional help is a must: Setting up your corporation’s year end with an accountant ensures compliance and maximizes deductions.

Your first year in business sets the tone for your financial future

Whether you’re a sole proprietor or a corporation, proactive planning, budgeting, and understanding your tax and GST obligations are essential financial steps for new business owners.

Don’t go it alone—get advice early, and you’ll avoid the most common first year financial mistakes new entrepreneurs make.