Accounting & Bookkeeping Services for Technology Companies
We handle accounting for SaaS companies, IT consultancies, software firms and tech startups. SR&ED tax credits, SaaS revenue recognition, zero-rated HST on US revenue, stock option planning, contractor classification, investor-ready financials. From $100/month. 1300+ five-star reviews.
Tech Accounting Requires a CPA Who Understands Your Business Model
Technology companies operate on business models that most accountants have never seen. Recurring SaaS revenue must be recognized over the subscription period, not when the invoice is sent. Developer salaries qualify for SR&ED tax credits worth up to $105,000 per year in refundable cash from CRA. Revenue from US and international clients is zero-rated for HST, producing quarterly refund cheques. Stock option plans have complex tax implications under section 7 of the Income Tax Act. And CRA targets tech companies for contractor reclassification more aggressively than almost any other industry.
We provide accounting and bookkeeping services specifically structured for technology companies. From day one, we track SR&ED-eligible expenditures, recognize revenue correctly, file HST to maximize zero-rated refunds, manage payroll with stock option implications, and produce the financial statements your investors or acquirers require. CRA audit defence is FREE for every client, every year.
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Why Technology Companies Need a Specialized CPA
| Challenge | What Makes Tech Different | What We Do |
|---|---|---|
| SR&ED tax credits | The largest non-dilutive funding source for Canadian tech companies. 35% refundable credit on the first $300,000 in eligible R&D expenditures ($105,000 cash back from CRA). The 18-month filing deadline is absolute: miss it and the entire claim is forfeited permanently. | Eligible expenditures tracked from the first developer hire. T661 technical narrative and financial schedules prepared. Filed on time every year. We have never missed an SR&ED deadline. |
| SaaS revenue recognition | SaaS subscriptions billed annually must be recognized monthly over the subscription term. A $12,000 annual contract billed in January produces $1,000/month in recognized revenue and $11,000 in deferred revenue. Recognizing the full amount in January overstates revenue and misrepresents financial performance to investors. | Revenue recognized monthly over the subscription period. Deferred revenue tracked on the balance sheet. Expansion revenue, churn and downgrades reflected accurately. Investor-ready financials every month. |
| Zero-rated HST on US/international revenue | Software, SaaS and digital services sold to customers outside Canada are zero-rated (0% HST). You charge $0 but claim full ITCs on all Canadian expenses. This produces monthly HST refund cheques from CRA. Most tech companies leave thousands on the table by not filing monthly. | HST registered at incorporation. US and international revenue classified as zero-rated. All Canadian ITCs claimed. Monthly filing for monthly refund cheques. A tech company with $300,000 in Canadian expenses recovers $39,000/year. |
| Contractor vs. employee classification | Tech companies use contractors heavily: offshore developers, freelance designers, contract QA. CRA targets IT staffing and tech companies for worker reclassification. If CRA determines your contractors are employees, you owe back CPP, EI, income tax and penalties for all years. | Every contractor relationship reviewed against CRA criteria (control, tools, financial risk, exclusivity). Contracts structured correctly. T4A slips issued. Documentation maintained. CRA audit defence FREE. |
| Stock option plans (ESOP) | Employee stock options under section 7 of the ITA have specific tax rules: timing of the benefit, the $200,000 annual vesting limit for the stock option deduction, exercise price requirements, and the difference between CCPC and non-CCPC treatment. The wrong structure costs employees and the company. | ESOP structure advised. Grant agreements documented in the minute book. s.7 deduction eligibility confirmed. $200,000 vesting limit tracked. Exercise price documented at fair market value. Cap table updated with every grant. |
| Capitalized vs. expensed development costs | Under ASPE (Section 3064), development costs that meet specific criteria (technical feasibility, intent to complete, ability to use/sell) can be capitalized as an intangible asset rather than expensed. Capitalizing increases assets and net income; expensing reduces taxable income immediately. | We advise on the capitalize vs. expense decision based on your stage, financial strategy and investor expectations. Pre-revenue startups typically expense everything for maximum SR&ED and loss carry-forwards. Growth-stage companies may capitalize to show stronger financials. |
| Investor-ready financial statements | VCs, angels and acquirers require GAAP-compliant financials with proper revenue recognition, deferred revenue, capitalization policies and clean equity sections showing every share class, option pool and convertible instrument. | Monthly financial statements in QBO or Xero. Annual financials prepared for due diligence. Revenue recognition reviewed. Cap table maintained. Data room ready at any time. |
| International revenue and multi-currency | Tech companies with US and international clients receive revenue in USD, EUR and other currencies. Foreign exchange gains and losses must be tracked. Transfer pricing rules apply if you have international subsidiaries or intercompany transactions. | Multi-currency accounting configured in QBO or Xero. FX gains and losses tracked. Invoicing in foreign currencies supported. Transfer pricing documented for intercompany transactions. |
SR&ED Tax Credits for Technology Companies
How SR&ED Works for Tech
| Component | Details |
|---|---|
| Credit rate (CCPC, first $300,000) | 35% refundable. CRA sends a cheque even if you have zero taxable income. $300,000 in eligible expenditures = $105,000 cash. |
| Credit rate (above $300,000) | 15% non-refundable. Applied against tax owing. Carried forward if unused. |
| Eligible expenditures | Developer salaries, contractor costs (at 80% or via proxy method), materials consumed in R&D, cloud infrastructure used for R&D (not production). Overhead calculated using the proxy method (65% of labour). |
| Filing deadline | 18 months after the fiscal year-end. Absolute. No extensions. December 31, 2025 year-end: file by June 30, 2027. |
| CRA review rate | Approximately 20% of claims are reviewed. Tech companies with large claims relative to revenue are flagged more frequently. |
SR&ED Credit by Expenditure Level
| Eligible Expenditures | Refundable Credit (35%) | Non-Refundable Credit (15%) | Total Credit |
|---|---|---|---|
| $150,000 | $52,500 | $0 | $52,500 |
| $300,000 | $105,000 | $0 | $105,000 |
| $500,000 | $105,000 | $30,000 | $135,000 |
| $750,000 | $105,000 | $67,500 | $172,500 |
| $1,000,000 | $105,000 | $105,000 | $210,000 |
What Qualifies for Tech Companies
| Eligible (Technological Uncertainty) | Not Eligible (Routine Development) |
|---|---|
| Developing a new algorithm to process data in a way not previously achieved. | Using established algorithms with known inputs and outputs. |
| Building a software architecture that requires overcoming unknown scalability challenges. | Building a CRUD application using documented frameworks (React, Django, Rails). |
| Creating a novel machine learning model or training methodology. | Fine-tuning an existing pre-trained model on new data without modifying the architecture. |
| Developing a real-time data pipeline that pushes beyond known processing limits. | Setting up a standard ETL pipeline using existing tools (Airflow, dbt). |
| Engineering a novel hardware-software integration with undefined performance parameters. | Integrating with a third-party API using published documentation. |
| Developing new cryptographic methods or security protocols. | Implementing TLS, OAuth or standard encryption libraries. |
The 18-Month SR&ED Deadline Is Absolute. There are no extensions. There is no late filing. If the deadline passes, the entire claim is forfeited permanently regardless of eligibility. A tech company with $500,000 in eligible expenditures that misses the deadline forfeits $135,000 in credits. We track the deadline for every client and file every claim on time. Bookkeeping Services →
What Our Tech Accounting Service Includes
| Service | What We Deliver | Frequency |
|---|---|---|
| Monthly bookkeeping | Bank reconciliation, expense categorization (R&D vs. G&A vs. COGS), SaaS revenue recognition with deferred revenue, subscription metrics. Connected to QBO or Xero with automated bank feeds. | Monthly |
| SaaS revenue recognition | Annual and multi-year contracts recognized monthly. Deferred revenue tracked on the balance sheet. Expansion, contraction, churn and upgrades reflected accurately. | Monthly |
| SR&ED claim preparation | Eligible expenditures identified and tracked from the first developer hire. T661 technical narrative prepared. Financial schedules completed. Filed within the 18-month deadline. | Annual |
| HST filing (zero-rated tech refunds) | US and international revenue classified as zero-rated. All Canadian ITCs claimed. Monthly filing for monthly refund cheques. $300,000 in Canadian expenses = $39,000/year in refunds. | Monthly |
| Payroll for founders and developers | Salary-dividend split for founders. CPP/EI calculations (40%+ shareholders exempt from EI). Stock option tracking. T4 preparation. ROE filing. | Per pay period |
| Contractor management and T4A | Contractor payments tracked. T4A slips issued. Classification reviewed against CRA criteria. Documentation maintained for audit defence. | Per payment / Annual |
| Monthly financial statements | Income statement, balance sheet, cash flow. Tech-specific: MRR, ARR, burn rate, runway, gross margin, deferred revenue balance, R&D as % of revenue. Investor-ready format. | Monthly |
| Cap table and equity tracking | Shareholder register updated with every equity event: founder shares, option grants, SAFE conversions, convertible notes, preferred rounds. Maintained in the minute book. | As needed |
| T2 corporate tax return | From $400. SR&ED integration. Non-capital loss carry-forwards. CCA on equipment. Immediate Expensing. Salary-dividend optimization. | Annual |
| CRA audit defence | FREE for all clients. SR&ED reviews, contractor reclassification, HST audits, T2 audits. Full representation. Every audit, every year. | As needed (FREE) |
Technology Company KPIs We Track Every Month
| KPI | Target | Why It Matters |
|---|---|---|
| Monthly Recurring Revenue (MRR) | Growing 10% to 20% MoM (early stage) | The #1 SaaS metric. Investors value companies on MRR growth rate. We calculate new MRR, expansion MRR, contraction MRR and churned MRR separately. |
| Annual Recurring Revenue (ARR) | $1M+ for Series A | MRR x 12. The baseline for valuation. Seed: $100K to $500K ARR. Series A: $1M to $3M ARR. Growth: $5M+ ARR. |
| Gross margin | 70% to 85% (SaaS) | Revenue minus direct costs (hosting, infrastructure, customer support) divided by revenue. Below 60%: investors question scalability. |
| Monthly burn rate | Depends on stage | Total cash spent per month. Pre-revenue: $10K to $50K. Post-seed: $30K to $100K. Growth: $100K+. We calculate and report monthly. |
| Runway (months) | 12 to 18 months minimum | Current cash divided by monthly burn. Below 6 months: start fundraising immediately. We flag when runway drops below the threshold. |
| Net Revenue Retention (NRR) | Above 100% | Revenue from existing customers this period vs. last period (including expansion, minus churn). Above 110%: strong product-market fit. Below 90%: retention problem. |
| R&D as % of revenue | 20% to 40% (growth stage) | Total R&D spend divided by revenue. Early stage: 80% to 100% (normal). Growth: 20% to 40%. Mature: 15% to 25%. Also determines SR&ED eligible pool. |
| Deferred revenue balance | Track monthly | Revenue collected but not yet recognized. Annual prepaid contracts create large deferred balances. Growing deferred revenue signals strong forward bookings. |
We Report These KPIs in Your Monthly Financial Package. Every month you receive MRR, ARR, burn rate, runway, gross margin, NRR and deferred revenue. When burn accelerates or MRR growth slows, you see it immediately. This is what separates tech-specific accounting and bookkeeping from generic bookkeeping.
Technology Company Client Results
SaaS Company, Toronto ($800K ARR)
A B2B SaaS company with $800,000 ARR, 8 developers and 85% US revenue was using a general bookkeeper who was recognizing annual contracts in the month of invoice (not spreading over the subscription term), was not filing SR&ED, and was filing HST quarterly instead of monthly. We corrected revenue recognition ($142,000 in deferred revenue reclassified), filed the SR&ED claim on $620,000 in eligible expenditures ($105,000 refundable + $48,000 non-refundable = $153,000 total), switched to monthly HST filing ($31,200/year in zero-rated ITC refunds), and implemented monthly MRR, ARR and burn rate tracking.
IT Consulting Firm, Mississauga (Contractor Defence)
CRA audited a 12-person IT consulting firm for contractor classification. CRA proposed reclassifying 6 offshore and local contractors as employees: $96,000 in back CPP, EI and source deductions for 3 years. We reviewed every contractor agreement, demonstrated that each contractor used their own equipment, worked for multiple clients, bore risk of loss on fixed-price deliverables and controlled their own schedule. We provided client lists, invoices from other clients and contractor-owned equipment documentation. Result: 5 of 6 maintained as independent. Reduced from $96,000 to $16,200. CRA Audit Services →
AI Startup, Toronto (Pre-Revenue SR&ED)
A pre-revenue AI company with 5 developers, $480,000 in eligible developer salaries and $0 revenue was not claiming SR&ED because their previous accountant told them they needed revenue first (incorrect). We filed the SR&ED claim: $105,000 refundable on the first $300,000 + $27,000 non-refundable on the remaining $180,000 = $132,000 total. We also registered for HST (zero-rated on planned US revenue), accumulated $68,000 in non-capital losses for carry-forward, and prepared investor-ready financials for a seed round.
E-commerce Platform, Hamilton (HST + Incorporation)
A marketplace platform with $360,000 in GMV processing payments for 200+ vendors was operating as a sole proprietor. Revenue (platform commission): $72,000 growing to $180,000. We incorporated ($35 service fee + $273 government filing), registered for HST with zero-rated treatment on US vendor commissions (40% of revenue), implemented proper marketplace revenue recognition (commission only, not GMV), set up payroll for 2 staff, and identified $12,000 in retroactive ITC claims on prior platform development costs.
Contractor vs. Employee: The #1 CRA Audit Risk for Tech
| Factor | Supports Independent Contractor | Supports Employee (CRA Risk) |
|---|---|---|
| Control over work | Contractor determines how, when and where they work. Delivers outcomes, not hours. | Company controls daily schedule, work methods and requires on-site or specific hours. |
| Equipment and tools | Contractor uses own laptop, software licenses, development environment. | Company provides all equipment, software and tools. |
| Financial risk | Fixed-price contracts. Contractor bears cost of rework and delays. | Paid hourly or by time. No risk of loss. Guaranteed compensation. |
| Multiple clients | Contractor works for other companies simultaneously. | Works exclusively for one company. No other clients. |
| Integration | Works on defined projects with clear start and end dates. | Integrated into the team: attends standups, uses company Slack, has company email. |
| Invoicing | Contractor submits invoices per milestone or period. | Paid on regular payroll schedule without invoicing. |
Cost of Reclassification for Tech Companies
| Contractors | Avg Annual Pay | Years | Estimated CRA Reassessment |
|---|---|---|---|
| 3 contractors | $85,000 | 2 years | $42,000 to $58,000 |
| 6 contractors | $90,000 | 3 years | $96,000 to $138,000 |
| 10 contractors | $95,000 | 3 years | $168,000 to $240,000 |
CRA Audit Defence Is FREE for All Tech Clients. When CRA initiates a contractor reclassification audit, SR&ED review or HST examination, we handle everything at no additional charge. We review every contractor relationship at onboarding. We attend every CRA meeting. We negotiate every proposed adjustment. We have saved tech clients over $200,000 in reclassification disputes.
Technology Company Accounting Pricing
| Service | Fee | What Is Included |
|---|---|---|
| Monthly bookkeeping | From $100/month | Bank reconciliation, SaaS revenue recognition, deferred revenue, HST filing (zero-rated refunds), monthly financials with MRR, ARR, burn, runway, gross margin. |
| Payroll (first founder/employee) | $125/month | Pay stubs, CPP/EI/tax, stock option tracking, remittances, T4 prep. EI exemption for 40%+ shareholders. |
| Payroll (each additional) | $75/month | Same per additional. 8 developers: $125 + (7 x $75) = $650/month. |
| SR&ED claim (T661) | 15% to 20% contingency + $1,000 retainer | Contingency on refund received. $0 if denied. Technical narrative, financial schedules, CRA filing. Retainer applied against contingency. |
| Incorporation | From $35 (one-time) | Articles, 3+ investor-ready share classes, minute book, BN, HST, payroll. Government fee additional. Bookkeeping clients: FREE. |
| T2 corporate tax return | From $400 | SR&ED integration. Loss carry-forwards. CCA on equipment. Immediate Expensing. Salary-dividend optimization. |
| CRA audit defence | FREE (all clients) | SR&ED reviews, contractor reclassification, HST audits. Full representation. Every audit, every year. |
Example: SaaS Company, 2 Founders + 6 Developers. Bookkeeping $100/month + payroll $650/month (1 first + 7 additional) = $750/month. SR&ED: contingency (you pay only when you receive the credit). T2 from $400. CRA audit defence FREE. Monthly financials with all SaaS metrics included. Know Your Exact Fee →
How We Onboard a Technology Company
Incorporate
Federal incorporation with investor-ready share classes. Minute book, BN, HST (zero-rated for US revenue), payroll. ESOP structure documented if applicable.
Configure
QBO or Xero with tech chart of accounts. Revenue recognition rules for SaaS. Bank feeds connected. R&D vs. G&A expense separation configured.
Track
Monthly financials with MRR, ARR, burn, runway, deferred revenue. SR&ED-eligible expenditures tracked from the first developer. Contractor documentation maintained.
Scale
SR&ED filed annually. HST refunds flowing monthly. Investor-ready financials for due diligence. Stock options documented. Cap table current. CRA audit defence active.
Technology Companies We Serve
Frequently Asked Questions: Technology Company Accounting
Meet Your Experts
Sharad Gondaliya, CPA
Founder & Managing Director
Gondaliya CPA Professional Corporation
Sharad leads technology company accounting strategy: SR&ED claims, SaaS revenue recognition, contractor classification defence, investor-ready financials, stock option structuring and CRA audit defence.
Vandana Goel, CPA
Senior Accountant
Gondaliya CPA Professional Corporation
Vandana manages monthly bookkeeping, SaaS revenue recognition, HST filing, payroll, deferred revenue tracking and financial statement preparation for technology clients.
What Our Clients Say
1300+ five-star reviews from business owners across Ontario and Canada.
Tech Accounting from $100/Month. SR&ED Experts.
SR&ED tax credits, SaaS revenue recognition, zero-rated HST refunds, stock options, contractor compliance, investor-ready financials. 1300+ five-star reviews.