BC Agency + Consultancy Chart of Accounts for Xero (Free)

An agency is the mirror image of a construction company in BC’s tax system: its revenue and its people costs sail through at GST-only 5%, while the provincial 7% concentrates in one modern place, the software stack. This Xero chart of accounts is arranged around that inversion, with the client-province billing map and contractor checks built into the accounts that need them.

Services in, services out, 5% both ways

Services income defaults to the custom GST on Sales (5%) rate: agency work is outside PST, so BC clients pay 5%, Ontario clients pay 13% via the seeded HST rate (place of supply follows the client), and qualifying export clients land on Zero Rated. Freelancer and contractor costs mirrors it at GST on Purchases (5%), with the out-of-scope alternative for unregistered small suppliers and the onboarding registration check in the note. Pass-through media and ad spend keeps client-billed platform money separate, its per-vendor tax story (creditable GST versus unclaimable simplified-regime tax) visible per campaign.

The 12% island: your tools

Software subscriptions defaults to BC - GST/PST on Purchases, because BC taxes software: the creative suite, the project tracker, the CRM, all cost sticker plus an unrecoverable 7% beyond the GST credit. Telephone and internet shares the treatment, telecom being PSTable. Computer equipment likewise, with the PST capitalizing into the asset. For a business whose costs are mostly people, these accounts are where the province actually collects, and where an out-of-province bookkeeper most often miscodes.

The judgment accounts

• Legal and professional fees: GST-only default with the 12% alternative, legal services being PSTable while accounting and consulting are not.
• Professional dues and memberships: 5% with the credit; recreational club dues never produce an ITC.
• Professional liability insurance: exempt, no PST line on premiums.
• Home office costs: out of scope, an income tax claim rather than a supply.
• Meals and entertainment: GST-only (BC exempts restaurant food from PST) at the federal half-credit.

Standing it up

1. Create the five custom rates under the Tax menu, Tax settings, Tax rates; the services economy runs on the two 5% rates Xero does not seed.
2. Import via Accounting, Chart of accounts, Import.
3. Put the readable CSV in the onboarding pack; its one-line notes are the difference between a new bookkeeper coding BC correctly in week one or quarter two.
4. Reconcile the client map quarterly: every retainer’s rate against its province, every rebill line carrying your service’s treatment rather than the original vendor’s.

Retainers keep their usual GST timing, tax landing at the earlier of invoice and payment, so deferred-revenue visibility keeps filings aligned with invoicing rather than delivery.

Remote contractors elsewhere in Canada change nothing structurally: their services arrive at 5% GST like local ones, PST never attaching to services bought, and the registration check matters identically. What does change with growth is the studio itself, because every new workstation, monitor, and camera is a 12% purchase whose provincial share capitalizes into the asset. The equipment accounts are where an expanding BC agency actually meets the province.

Retainer-funded hardware bought for a client project deserves the billable treatment: the goods carry their 12% on your purchase, and the rebill line to the client carries your service’s code.

Agency documents are small, constant, and full of judgment calls that look identical until they are not. Hubdoc captures and files them. ExpenseFlow reads each invoice, applies the services-at-5, software-at-12 split, the contractor registration logic, and the client-province rates, and posts coded entries into Xero against this chart. Dext holds the recurring stack to supplier rules.

The QuickBooks build is at BC agency chart of accounts for QuickBooks; rate mechanics live in the BC Xero tax rates reference.