7 Costly E-Commerce Accounting Mistakes Canadian Sellers Make

Mistake 1: Booking Payout Deposits as Revenue

Amazon and Shopify deposits are net amounts after fees and refunds. Recording them as gross revenue understates your sales and misrepresents your expenses. Always reconcile to gross sales from platform reports.

Mistake 2: Missing the $30,000 GST/HST Threshold

Many sellers only track one platform's revenue. The $30,000 threshold applies across all channels combined. Missing registration triggers penalties of $500+ plus interest, with back-registration and retroactive filing required.

Mistake 3: Treating GST/HST Collected as Income

GST/HST you collect from customers belongs to the CRA — it's never your income. Spending it is an easy way to create a cash-flow crisis at remittance time.

Mistake 4: Poor COGS Tracking

Deducting all inventory purchases in the year of purchase (instead of the year of sale) incorrectly overstates expenses. The CRA requires proper opening/closing inventory tracking.

Mistake 5: Mixing Personal and Business Accounts

Personal expenses paid from business accounts create audit nightmares. Every transaction must be clearly business or personal — not both.

Mistake 6: Ignoring Platform Fee ITCs

Amazon, Shopify, and most advertising platforms charge GST/HST on their fees. As a registered business, you can claim these back as Input Tax Credits. Many sellers miss thousands of dollars in ITC refunds annually.

Mistake 7: Not Keeping Records for 6 Years

The CRA can audit up to 6 years back. Delete your old Amazon or Shopify reports and you lose the ability to substantiate deductions if reviewed.