Setting Up Your Chart Of Accounts

Your chart of accounts is the DNA of your financial system. If it’s disorganized, your reports, taxes, and audits will be too. A properly structured chart of accounts ensures accurate categorization of revenue, expenses, and assets, helping CRA and Revenu Québec understand your filings easily and preventing audit discrepancies. Mackisen CPA Auditors Montreal sets up clean, compliant charts of accounts tailored to your business type, ensuring every transaction is clear, traceable, and useful for decision-making.

Legal and Regulatory Framework
Income Tax Act (Canada) Section 230(1): Requires clear categorization of income and expenses for verification.
CRA Policy IC78-10R5: Validates digital ledgers if structured with audit traceability.
Taxation Act (Quebec) Section 34: Mandates accurate expense and asset classification for QST compliance.
CPA Canada Handbook Section 5050: Outlines principles for account grouping and reconciliation.
Financial Administration Act (Quebec): Requires standardized financial recordkeeping for reporting entities.

Key Court Decisions
Beaudoin v. The Queen (2020): Denied deductions where expense classification was unclear.
Simard Beaudry Construction v. Canada (2019): Reinforced importance of proper account segmentation.
Lincora Group v. Quebec (2019): Penalized inconsistent chart structures during audit.
Royal Bank v. Canada (2019): Recognized CPA-verified ledgers as valid evidence for loans.
Tremblay Holdings v. The Queen (2021): Highlighted need for consistent account naming and structure.

Why CRA Targets / Issues / Enforces
Inconsistent charts of accounts cause CRA confusion during audits and lead to incorrect tax filings. Improperly grouped expenses can result in denied deductions or inflated tax liabilities. Mackisen CPA Auditors Montreal prevents these issues by designing charts that align with CRA’s audit logic and your business goals.

Mackisen Strategy
Account Structuring — Build a hierarchy covering assets, liabilities, income, and expenses.
Customization — Tailor account names and codes to industry-specific needs.
GST/QST Mapping — Link tax codes to correct categories for compliance.
Financial Reporting Integration — Connect to P&L and balance sheet templates.
CPA Oversight — Validate chart design for audit accuracy and clarity.
Ongoing Optimization — Adjust structure as your business grows or regulations evolve.

Powering Client Needs and Clarity
A Montreal construction firm reduced CRA adjustments by 80 percent after Mackisen redesigned its chart of accounts. A Quebec retailer improved profitability tracking using separate revenue streams. An Ontario consulting agency improved efficiency through a simplified chart integrated with QuickBooks.
How Mackisen Clients Benefit

• Accurate reporting and audit clarity

• Organized structure for faster reconciliations

• GST/QST compliance built in

• CPA-verified setup and maintenance

• Scalable accounting foundation for growth

Common Questions
Do I need a custom chart of accounts? Yes—every business has unique reporting needs.
Can I import my old chart? Yes, Mackisen cleans and restructures existing data.
How often should it be reviewed? Annually or after major operational changes.
Does CRA require specific naming? No, but categories must be consistent and logical.
Can Mackisen integrate with software? Absolutely—QuickBooks, Xero, Sage, and more.

Why Mackisen
Mackisen CPA Auditors Montreal builds the financial foundation every business needs—organized, compliant, and audit-proof. We design charts of accounts that simplify bookkeeping and support smarter financial decisions.