A chart of accounts (COA) is the list of every category your business uses to record money coming in and going out, grouped into five types: assets, liabilities, equity, revenue and expenses. Each account gets a number (usually 1000s for assets, 2000s for liabilities, 3000s for equity, 4000s for revenue and 5000s to 6000s for expenses). Canadian businesses also need accounts for GST/HST, PST, payroll deductions and the shareholder loan. A sample you can copy is below.
On this page
- What Is a Chart of Accounts? (Quick Definition)
- The Five Account Types and How They’re Numbered
- Sample Chart of Accounts for a Canadian Small Business (Free Template)
- Canada-Specific Accounts You Need: GST/HST, PST, Payroll Liabilities, Shareholder Loan
- How to Set Up and Customize Your Chart of Accounts
- FAQ: Chart of Accounts
- Get Your Books Set Up Properly From Day One
What Is a Chart of Accounts? (Quick Definition)
Think of it as the filing cabinet for your books. Every transaction you record, whether a sale, a rent payment or a loan, goes into one of these accounts. Your financial statements (balance sheet and income statement) and your tax returns are built directly from it.
A clean chart of accounts means:
- Reports you can actually read
- Faster, cheaper year-end work from your accountant
- Correct GST/PST returns
- Fewer surprises if the CRA asks questions
The Five Account Types and How They’re Numbered
| Number range | Account type | What it tracks | Shows up on |
| 1000 to 1999 | Assets | What the business owns (cash, receivables, equipment) | Balance sheet |
| 2000 to 2999 | Liabilities | What the business owes (payables, loans, taxes owing) | Balance sheet |
| 3000 to 3999 | Equity | Owner’s or shareholders’ stake (share capital, retained earnings) | Balance sheet |
| 4000 to 4999 | Revenue | Money earned from sales and services | Income statement |
| 5000 to 6999 | Expenses | Cost of sales and operating costs | Income statement |
Numbering tips:
- Leave gaps (1000, 1010, 1020) so you can add accounts later without renumbering
- Keep related accounts together (all bank accounts in 1000 to 1099)
- Use sub-accounts only when you’ll actually look at the detail
Sample Chart of Accounts for a Canadian Small Business (Free Template)
Assets (1000s)
| # | Account |
| 1000 | Chequing account |
| 1010 | Savings account |
| 1050 | Petty cash |
| 1100 | Accounts receivable |
| 1200 | Inventory |
| 1300 | Prepaid expenses |
| 1400 | Due from shareholder |
| 1500 | Computer equipment |
| 1510 | Accumulated amortization – computer equipment |
| 1520 | Furniture and equipment |
| 1530 | Accumulated amortization – furniture and equipment |
| 1540 | Vehicles |
| 1550 | Accumulated amortization – vehicles |
Liabilities (2000s)
| # | Account |
| 2000 | Accounts payable |
| 2050 | Credit card payable |
| 2100 | GST/HST collected |
| 2110 | GST/HST paid (ITCs) |
| 2150 | PST payable (BC / Saskatchewan / Manitoba) |
| 2200 | Payroll liabilities – CPP |
| 2210 | Payroll liabilities – EI |
| 2220 | Payroll liabilities – income tax |
| 2230 | Vacation pay payable |
| 2240 | WCB / WorkSafeBC payable |
| 2300 | Corporate income tax payable |
| 2400 | Due to shareholder (shareholder loan) |
| 2500 | Bank loan |
Equity (3000s)
| # | Account |
| 3000 | Share capital (corporations) / Owner’s capital (sole props) |
| 3100 | Retained earnings |
| 3200 | Dividends declared / Owner’s drawings |
Revenue (4000s)
| # | Account |
| 4000 | Sales – products |
| 4100 | Revenue – services |
| 4200 | Interest income |
| 4300 | Other income |
Cost of sales (5000s)
| # | Account |
| 5000 | Cost of goods sold |
| 5100 | Subcontractors |
| 5200 | Materials and supplies |
| 5300 | Freight and shipping |
Operating expenses (6000s)
| # | Account |
| 6000 | Advertising and marketing |
| 6050 | Bank charges and merchant fees |
| 6100 | Insurance |
| 6150 | Interest expense |
| 6200 | Meals and entertainment |
| 6250 | Office supplies |
| 6300 | Professional fees (accounting, legal) |
| 6350 | Rent |
| 6400 | Repairs and maintenance |
| 6450 | Salaries and wages |
| 6460 | Employer CPP and EI |
| 6470 | WCB / WorkSafeBC premiums |
| 6500 | Software and subscriptions |
| 6550 | Telephone and internet |
| 6600 | Travel |
| 6650 | Utilities |
| 6700 | Vehicle expenses |
| 6750 | Licences, dues and memberships |
| 6800 | Amortization |
Canada-Specific Accounts You Need: GST/HST, PST, Payroll Liabilities, Shareholder Loan
American templates miss these, and they cause the most problems at year-end:
| Account | Why you need it |
| GST/HST collected and GST/HST paid (ITCs) | Tracks what you owe and what you can claim. The net becomes your GST/HST return. See input tax credits. |
| PST payable | BC, Saskatchewan and Manitoba PST is a separate liability with no credits. Never mix it with GST. |
| Payroll liabilities (CPP, EI, income tax) | Holds deductions until you remit them to the CRA. |
| Vacation pay payable | Tracks vacation pay owed but not yet paid. |
| WCB / WorkSafeBC payable | Premiums owing for workers’ compensation. |
| Due to / due from shareholder | Tracks money between you and your corporation. A balance owed to the company can become taxable income if not repaid. See shareholder loans. |
| Meals and entertainment (separate) | Only 50% deductible, so keep it on its own line. |
How to Set Up and Customize Your Chart of Accounts
- Start from your software’s Canadian template. QuickBooks Online, Xero and Wave all have Canadian versions. Pick the one for your industry.
- Delete what you’ll never use. Fewer accounts = cleaner books.
- Add industry accounts:
- Construction: holdbacks receivable and payable, subcontractors, equipment rentals
- Restaurants: food cost, beverage cost, tips payable, delivery app fees
- E-commerce: platform fees (Shopify, Amazon), payment processor fees, returns
- Professional corporations: professional dues, continuing education, malpractice insurance
- Set up your sales tax codes so GST and PST post to the right accounts automatically.
- Ask your accountant to review it before you start. It takes 20 minutes and saves hours at year-end.
Related: Best accounting software for small businesses in Canada
FAQ: Chart of Accounts
How many accounts should a small business have?
Most small businesses do well with 40 to 80. More than that usually means too much detail.
Can I change my chart of accounts later?
Yes, but try to make changes at the start of a new fiscal year so year-over-year reports still compare.
Is the chart of accounts the same as the general ledger?
No. The chart of accounts is the list of accounts. The general ledger is all the transactions recorded in them.
Does a sole proprietorship need different accounts than a corporation?
Mostly the same. The difference is in equity: a sole prop uses owner’s capital and drawings, while a corporation uses share capital, retained earnings and dividends.
Should I have a separate account for each bank account and credit card?
Yes. Each one should match a real statement so you can reconcile it every month.
Get Your Books Set Up Properly From Day One
