Bookkeeping for Vancouver businesses

Foreign currency is recorded twice

An invoice raised in US dollars and paid weeks later is two amounts in Canadian dollars, not one. The sale is recorded at the rate on the transaction date and the receipt at the rate on the day the money arrives, and the difference between them is a foreign exchange gain or loss that belongs in its own account rather than buried in revenue. Doing this properly matters for more than accuracy: it separates what the business earned from what the currency did, which is the only way to tell whether a margin actually moved. Foreign exchange gains and losses covers the treatment.

Payment platforms deposit a net figure

A processor pays out the total of several transactions less its fees, sometimes less refunds and chargebacks, on its own settlement cycle. Recording that deposit as revenue understates both sales and expenses, and it makes the payout impossible to tie back to the orders behind it. What works is a clearing account: gross sales in, fees and refunds out, deposits out, and the account returns to nil. When it does not return to nil, something has gone missing — which is the point of running it that way. This becomes essential once more than one processor is involved.

Revenue billed before it is earned

Subscriptions, retainers, annual licences and deposits are all cash received for work not yet done, and none of them are revenue on the day they arrive. Recorded as deferred revenue and released as the service is delivered, they produce a monthly result that reflects the business. Recorded as revenue on receipt, they produce a spike followed by months of apparent decline, and they overstate income in any period where a large annual invoice happens to land. For a Vancouver business with recurring contracts, the deferred revenue schedule is often the difference between usable monthly figures and noise.

Sales tax on services that cross a border

Whether GST applies to a service depends on place-of-supply rules rather than on where the invoice was typed, and services supplied to non-residents can be zero-rated in defined circumstances — which is not the same as being exempt, because zero-rated supplies still allow input tax credits to be claimed. Coding those sales as though no tax existed loses the distinction and can put the input tax credit claim on shaky ground. For a business with customers outside Canada this is worth settling once and applying consistently. Zero-rated versus exempt supplies explains the difference.

PST in a service business

British Columbia charges 7% PST as a separate tax with its own registration and returns. Service businesses often assume it does not concern them, and it usually concerns them on the purchasing side: PST paid on software, telecommunications, hardware and office equipment is generally not recoverable, so it belongs in the expense or the asset rather than in a sales-tax receivable. Some services are themselves subject to PST, which is a registration question rather than a coding one. Either way the two taxes need separate accounts, because combining them makes both returns unreliable.

Contractors, and getting the paperwork before you pay

Vancouver businesses use a lot of contract labour — designers, developers, editors, consultants — and the bookkeeping consequences begin at the first payment, not at year end. Payments to non-residents for services performed in Canada can carry a withholding obligation, and payments to individuals raise the classification question that determines whether source deductions were required. Both are far easier to handle before money moves. Collecting the business number, the address and the terms at onboarding costs nothing; establishing them retroactively across a year of payments is genuinely difficult.

Remote bookkeeping from Abbotsford

EverStone is a sole practitioner CPA firm at 32615 South Fraser Way in Abbotsford. There is no Vancouver office, no downtown location and no local staff. Bank, card and processor feeds arrive electronically, documents are exchanged securely, and the clearing and deferred revenue schedules are maintained monthly rather than rebuilt at year end. The person reconciling the merchant account is the CPA who will prepare the corporate return from it, so the revenue figure is settled once.