QuickBooks is the most widely used accounting software for small businesses in Canada. But “widely used” doesn’t mean “correctly set up.”
I’ve seen hundreds of QuickBooks files over the years. The majority have at least one significant setup error — and many have errors that have been silently distorting the owner’s financial picture for months or years.
The most common culprit? Incorrect GST/QST configuration.
Step 1: Choose the Right Version
For most Quebec small businesses, QuickBooks Online (QBO) is the right choice. It’s cloud-based, automatically updates, and integrates with hundreds of other tools. Within QBO, the Essentials or Plus plan covers most small business needs.
Step 2: Set Your Fiscal Year and Currency
Go to Settings → Account and Settings → Advanced. Set your fiscal year start month to match your actual fiscal year. If you invoice in USD or other currencies, enable multi-currency in the same settings panel.
Step 3: Configure GST/QST — The Critical Step
Go to Taxes → Set up taxes. Select “Canada” as your country and “Quebec” as your province. QuickBooks will create the following tax codes automatically:
| Tax Code | Rate | Description |
|---|---|---|
| GST/HST | 5% | Federal Goods and Services Tax |
| QST | 9.975% | Quebec Sales Tax |
| GST + QST | 14.975% | Combined rate for most Quebec transactions |
| Zero-rated | 0% | Taxable at 0% (e.g., basic groceries, exports) |
| Exempt | N/A | Not subject to GST/QST |
Step 4: Set Up Your Chart of Accounts
Review and customize the default chart of accounts. Create separate revenue accounts for each major revenue stream, and make sure you have separate expense accounts for vehicle expenses, meals & entertainment, professional fees, and home office.
Step 5: Connect Your Bank and Credit Card Accounts
This is the single biggest time-saver in QuickBooks. Once connected, transactions import automatically every day. Go to Banking → Connect account and follow the prompts for your bank.
Common Mistakes to Avoid
Mistake 1: Using personal accounts for business transactions. Open a dedicated business bank account and credit card before you start.
Mistake 2: Miscategorizing owner draws as expenses. Owner draws should be coded to an equity account, not an expense account.
Mistake 3: Ignoring the reconciliation feature. Use it every month. It’s the only way to catch errors, duplicate entries, and missing transactions.
At Safer Transitions, QuickBooks setup is included in all our bookkeeping packages. We set it up right the first time — so you never have to fix it later.
