Quick Answer
E-commerce bookkeeping in Canada requires tracking gross sales (not payouts), platform fees as expenses, GST/HST separately, COGS by unit, and all other business expenses. The goal is CRA-compliant monthly financial statements that show actual profit and support accurate tax filing.
E-commerce bookkeeping differs from traditional retail bookkeeping in several important ways: you don't issue invoices to most customers, payment happens before you ship, platforms pay you in bulk net amounts, and different platforms follow different rules for GST/HST.
Setting Up Your Chart of Accounts
For a typical Canadian e-commerce business, you need at minimum:
- Revenue: Product Sales (by platform if useful), Shipping Revenue
- COGS: Cost of Products Sold, Shipping Out
- Expenses: Platform Fees, Advertising, Payment Processing, Storage Fees, Professional Fees, Software
- Liabilities: GST/HST Payable
- Assets: Inventory
Monthly Bookkeeping Workflow
- Download each platform's monthly sales/payout report
- Reconcile payouts to gross sales (remove fees, add them to expenses)
- Post gross sales to revenue, platform fees to expenses
- Post GST/HST collected to the liability account
- Post all business expense receipts with correct categories
- Reconcile bank statements — verify everything ties out
- Run a Profit and Loss report for the month
The Difference Between Cash and Accrual Accounting
Most small e-commerce sellers use cash accounting — recording income when received and expenses when paid. The CRA generally accepts cash accounting for businesses under $1M in revenue. Larger sellers, or those with significant inventory, should use accrual accounting — which records revenue when earned (order placed) and expenses when incurred (purchase made). Your accountant can help determine which is right for you.
Professional E-Commerce Bookkeeping in Canada
MaxRefund provides monthly bookkeeping for Canadian online sellers — reconciled books, GST/HST filings, and year-end tax prep, all from one team.
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