E-commerce Accounting for Sellers Who’d Rather Sell Than Do Bookkeeping

Shopify, Etsy, eBay, and Amazon accounting and bookkeeping for sellers across Canada

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Our Range of Services

Assistance with Tax Account Registration in Canada

Certified on the tools you’re already using: QuickBooks Elite ProAdvisor, Xero Platinum Partner, A2X Partner, FreshBooks Certified, Sage Gold Partner

Why E-commerce Bookkeeping Is Different

Standard bookkeeping assumes one sale, one invoice, one payment. E-commerce doesn’t work that way: a single order can involve platform fees, currency conversion, shipping charged separately, refunds processed days later, and sales tax collected by the platform itself in some cases. Getting this wrong doesn’t just mean messy books. It means misreported income and sales tax exposure that surfaces at the worst time: a CRA review.

• Multi-channel reconciliation: matching what the platform pays out against what actually sold, after fees
• Sales tax by province: GST/HST registration once you cross the small-supplier threshold ($30,000 in worldwide taxable supplies in a single calendar quarter or over the last four consecutive quarters), plus PST obligations in BC, Saskatchewan, and Manitoba where applicable. We handle GST return filing and HST return filing directly for e-commerce clients
• Inventory and cost of goods sold: tracking what inventory actually costs when you’re buying from multiple suppliers at different prices
• Cross-border sales: GST/HST treatment differs when you’re selling to customers outside Canada

How We Actually Reconcile Your Payouts

Most sellers record their books one of three ways. Only one holds up if the CRA ever asks questions. This is part of our broader bookkeeping services.

Platform-by-Platform Accounting

Mistakes We See Most Often

Why Work with an E-commerce Accountant Instead of Doing It Yourself

This sits alongside our full financial accounting services for businesses that need more than platform-specific bookkeeping.

The tax rules behind selling online in Canada

GST/HST: who charges it, you or the marketplace

Once your worldwide taxable sales pass $30,000 over four consecutive calendar quarters, you stop being a small supplier and have to register for GST/HST. Cross the line in a single quarter and you register within 29 days. After that, who actually collects the tax depends on where you sell.

Why this matters: a lot of sellers assume Amazon or Etsy handles all their sales tax. That is only true while you are below the threshold and unregistered. Once you register, the responsibility for your own sales comes back to you, and getting that handoff wrong is a common source of reassessments. BC also has its own marketplace rules and a separate 7 percent PST, which we cover in BC PST for online marketplaces.

The rate follows your customer, not your office

For goods, the place of supply is generally the province where the item is delivered to the customer, so the rate is set by their address, not yours. A store shipping across Canada charges different rates on the same product:

Your store or marketplace settings have to be configured to charge the destination rate. Because your treatment costs are on the input side, note that you can generally claim input tax credits for the GST/HST you pay on advertising, software, rent, and supplies used in the business.

Selling into the United States

Since the 2018 South Dakota v. Wayfair decision, US states can require a remote seller, including a Canadian one, to register and collect state sales tax once it passes that state’s economic nexus threshold. A widely used baseline is US$100,000 in sales or 200 transactions into the state in a year, but the dollar figure, whether a transaction count applies, and how sales are measured all vary by state, and several states have changed their tests.

Why this matters: there is no single national US rule and no single number that is safe to assume. If a meaningful share of your orders ship to one US state, that state’s current threshold has to be checked on its own. We map your sales by state so you register only where you actually have to.

Inventory is where product sellers differ from service businesses

You do not deduct stock when you buy it. Inventory is carried on the books and flows into cost of goods sold as items sell, which is what makes an accurate year-end count matter for a product business.

• Value each item at the lower of its cost or fair market value, or value the whole inventory at fair market value, and keep using the same method year to year.
• Use landed cost, the product plus freight and duty, as the basis, not just the supplier invoice.
• Amazon FBA stock sitting in a fulfillment centre is still your asset and has to be counted and valued at year-end, even though you never physically hold it.

Incorporating: the tax rate, and the income-splitting edge

A Canadian-controlled private corporation pays about 11 percent on active income up to $500,000, 9 percent federal plus 2 percent in BC, and about 27 percent above the limit. The benefit is deferral: income left in the business is taxed at about 11 percent rather than your personal rate.

The bigger point for an online seller is one that professional practices do not get. The tax on split income rules normally block paying dividends to a spouse, but the excluded shares exception is open where all of three tests are met:

• Less than 90 percent of the corporation’s gross business income comes from providing services.
• The corporation is not a professional corporation.
• The shares represent 10 percent or more of the votes and value.

Why this matters: an e-commerce business sells goods, so it is usually not a professional corporation and usually earns well over 10 percent of its income from products rather than services. That can leave the income-splitting door open, exactly the door that is closed to doctors, lawyers, and accountants. It is a fact-specific test that turns on your real goods-versus-services mix, so it is worth measuring rather than assuming.

If you run an online store in BC, Alberta, Saskatchewan, Manitoba, or Ontario, we can tell you where your GST/HST, US exposure, and structure actually stand.

Frequently Asked Questions