Bookkeeping for E-Commerce Businesses in Canada and USA

Why e-commerce books are different

A bricks-and-mortar business collects money at the register and records it. An e-commerce business collects through Stripe, Shopify Payments, PayPal and Amazon Seller Central — each netting out fees, holdbacks and refunds before depositing a lump sum every few days. Reconciling that correctly is a different discipline from standard bookkeeping.

Add multi-province or multi-state sales tax obligations, inventory across several fulfilment centres, and a cost-of-goods figure that shifts with every reorder, and you have a picture most generalist bookkeepers handle badly.

Payment processor reconciliation

Every Shopify payout is a net figure — gross sales minus refunds, chargebacks, processing fees and any Shopify Capital repayments. If your bookkeeper records the deposit as "sales," revenue is understated by the fees and refunds vanish as separate line items. Neither error survives a tax review or investor look.

The right approach records gross sales, then cost of goods, then processing fees as a separate expense, then refunds individually. That structure gives a true gross margin — the number that actually drives decisions on pricing and ad spend.

Inventory and COGS

Canadian sellers on QuickBooks Online choose between average cost and FIFO — and the choice matters when costs are rising. Every purchase order needs a landed cost (product, freight, duties, import fees) carried through to cost of goods sold when the unit ships.

Amazon FBA adds a wrinkle: Amazon holds inventory, charges fluctuating fees and occasionally loses stock. We use a settlement-import tool such as A2X to automate categorisation, cutting reconciliation time and eliminating manual error.

Sales tax and GST/HST nexus

The 2018 US Wayfair decision created economic nexus — exceed a state threshold (often $100,000 or 200 transactions) and you owe sales tax there regardless of warehouse location. Canadian sellers shipping into USA must monitor this state by state.

In Canada, GST/HST registration triggers at $30,000 in annual revenue, with provincial layers (QST, PST) on top. A seller shipping nationwide without proper collection is quietly accumulating a liability that surfaces later as a penalty-laden assessment.

What good e-commerce books look like

Monthly: gross revenue by channel, refunds separately, COGS by product line, processing fees, fulfilment costs and a real gross margin you can act on. Quarterly: sales tax position by jurisdiction against thresholds. Annually: inventory reconciled to physical counts and a clean year-end package your CPA can file from.