Written for the Person Who Has to Make the Decision.

SaaS & Software

Recurring revenue, heavy payroll in engineering, and customers on both sides of the border.

1. 01
   Most of your dev payroll may qualify for SR&ED

   Work that resolves technical uncertainty counts, not just “R&D projects.” The claim is won or lost on contemporaneous documentation.

2. 02
   Annual prepay is cash, not revenue

   Booking a 12-month contract upfront flatters one quarter and hides churn in the next. Deferred revenue keeps the numbers honest for investors.

3. 03
   US customers can create US tax obligations

   State sales tax nexus and federal filings can apply long before you open a US entity. Map it before your first big US deal closes.

AI & Machine Learning

Research-heavy teams, expensive compute, and IP that investors will diligence closely.

1. 01
   Model development can be strong SR&ED

   Experimenting with architectures, training methods or data pipelines to overcome technical uncertainty often qualifies. Prompting an off-the-shelf API usually doesn’t.

2. 02
   Compute is your biggest line item, so track it

   Cloud and GPU spend belongs in your unit economics and your SR&ED file. Tag it by project from the start, not at year-end.

3. 03
   Where your IP sits shapes your tax

   Hiring researchers abroad, licensing models or selling to US enterprises raises transfer pricing and cross-border questions. Settle ownership before you raise.

E-commerce & DTC

Thin margins, inventory tying up cash, and sales tax in every jurisdiction you ship to.

1. 01
   GST/HST registration kicks in at $30,000

   Once taxable sales pass $30K over four consecutive quarters, you must register, and marketplaces don’t always collect on your behalf.

2. 02
   Inventory is where your cash goes to wait

   Track your cash conversion cycle, not just gross margin. Growth funded by inventory can run a profitable store out of money.

3. 03
   Shipping into the US has its own thresholds

   Many states set economic nexus at around US$100,000 in sales. Know which ones you’ve crossed before you scale ad spend there.

Manufacturing

Capital-intensive, process-driven, and often doing more eligible R&D than it realizes.

1. 01
   Process improvement can be SR&ED

   New tooling, materials or methods that required experimentation often qualify, even on the shop floor.

2. 02
   Equipment timing changes your tax bill

   Capital cost allowance rules reward planning when you buy. Decide the timing with your advisor, not just your supplier.

3. 03
   Standard costs drift

   If your costing hasn’t been updated since the last price increase, your margins per product line are probably wrong.

Professional Services

Consultancies, agencies and firms where the product is people’s time.

1. 01
   Watch for personal services business risk

   A one-client corporation that looks like employment can lose the small business rate. Structure and contracts matter.

2. 02
   Unbilled work is a cash leak

   Track work-in-progress weekly. Firms that bill monthly in arrears are lending to their clients for free.

3. 03
   Your pay mix should change as you grow

   Salary versus dividends depends on RRSP room, CPP and family income. Revisit it every year.

Construction & Trades

Progress billing, subcontractors, and holdbacks that sit on the balance sheet for months.

1. 01
   T5018 reporting is on you

   If construction is your main business, payments to subcontractors must be reported to CRA annually.

2. 02
   Holdbacks are real cash you don’t have yet

   Ontario’s Construction Act holds back 10% of each payment. Forecast when it releases, not just when it’s earned.

3. 03
   Job costing beats year-end surprises

   Track labour and materials by job as you go. It’s the only way to know which contracts actually made money.

Healthcare & Clinics

Physicians, dentists and allied health clinics running a practice as a business.

1. 01
   Exempt services mean no input tax credits

   Most healthcare services are GST/HST exempt, so the tax you pay on rent and equipment is a real cost. Price it in.

2. 02
   A professional corporation needs a plan

   Incorporating helps only if you leave money in it. Set a retained-earnings and remuneration strategy from day one.

3. 03
   Associate or employee?

   How you engage associates and contractors affects payroll remittances, CPP and liability. Put the terms in writing.