Accounting for ecommerce and marketplace sellers

An online store is a retailer whose customers are everywhere. That single fact turns sales tax from one rate into several, turns a bank deposit into a figure that no longer matches any invoice, and turns inventory into a number that has to be built rather than read off a shelf. None of it is exotic, but almost none of it appears in general small business guidance.

What is different about ecommerce accounting

Sales tax follows the customer, not the seller

Place-of-supply rules mean the rate charged is generally determined by where the goods are delivered. A registered seller in BC shipping to Ontario charges the Ontario rate, and to Alberta a different one again. One registration covers GST/HST across the participating provinces, but the rate applied has to vary order by order — which is a configuration problem in the storefront long before it is an accounting one.

Provincial sales taxes are separate registrations

British Columbia’s PST, and the equivalent taxes in Saskatchewan, Manitoba and Quebec, sit outside the GST/HST system entirely. Selling into those provinces can create a registration obligation with its own thresholds, returns and rules about what is taxable. A seller who assumes one GST/HST number covers the whole country will be wrong in at least four provinces.

Marketplaces may collect the tax, but the obligation stays yours

Under the marketplace facilitator rules, platforms are often required to collect and remit GST/HST on sales made through them. That does not eliminate your own registration or filing responsibilities, and it means marketplace sales and direct-website sales are reported differently on the same return. Reporting platform-collected tax as if you had collected it is a common and awkward error to unwind.

Exports are zero-rated, which changes the whole return

Goods shipped outside Canada are generally zero-rated: no tax charged, input tax credits still recoverable. A seller with substantial US or international volume therefore tends to file for refunds rather than remittances, and the evidence of export — shipping records, customs documents — is what supports the treatment on review.

The deposit is not the revenue

Payment processors and marketplaces settle net: gross sales less commissions, advertising, refunds, chargebacks, shipping labels and reserve. Booking the deposit as revenue understates both sales and expenses, misstates GST, and makes gross margin meaningless. Every payout has to be decomposed back to its components, which is why ecommerce bookkeeping is fundamentally a reconciliation exercise.

Inventory has to be costed, not guessed

Cost of goods sold is the largest number on most ecommerce income statements, and it depends on landing costs correctly: product cost plus freight, duty and any non-recoverable tax. Add multi-currency purchasing, goods in transit at year end and stock held in a fulfilment warehouse, and a physical count at the year-end date stops being a formality.

The guides, tools and pages for this vertical

Sales tax across provinces and borders

• Marketplace facilitator rules — when the platform collects the tax and what you still have to report. Read it if you sell on a marketplace at all.
• Place of supply rules — which province’s rate applies to which order. Read it before configuring tax in your storefront.
• BC PST for small business — the provincial tax that runs alongside GST, with its own registration and rules.
• Exports and non-resident customers — why international orders are usually zero-rated, and the records that prove it.
• Zero-rated versus exempt supplies — the distinction that decides whether you can still recover input tax.
• Input tax credits — recovering tax on inventory, software, freight and ad spend.
• GST/HST registration — the $30,000 small-supplier threshold and when a growing store crosses it.

Calculators

• GST/HST calculator — works out the tax on an order at any provincial rate. Useful while setting up storefront tax settings.
• Quick method versus regular — compares the two filing methods. Rarely the answer for an inventory business, but worth checking.
• Corporate tax estimator — a first estimate of the year’s corporate tax, useful once margins are known.

Inventory, margin and year end

• Inventory accounting — landed cost, valuation methods and how inventory drives cost of goods sold.
• The year-end inventory count — what has to be counted and documented, including stock in a third-party warehouse.
• Writing off bad debts — chargebacks and uncollectible accounts, and when the deduction is available.
• Advertising and promotion — platform ads, influencer spend and sponsorship — and the tax on ads bought from non-residents.
• Foreign property reporting — the T1135 obligation that can follow a US bank account or foreign-held funds.
• Cash versus accrual — why an inventory business cannot sensibly run on cash-basis numbers.

Service and city pages

• Accounting for online sellers — the service page: what an engagement covers for a store or marketplace seller.
• Ecommerce accountant, Vancouver — framed for sellers based in the Lower Mainland.
• Inventory businesses, Langley — for wholesalers and distributors where stock is the core asset.
• Retail accountant, Edmonton — for Alberta retailers, where no provincial sales tax applies.
• QuickBooks versus Xero — choosing the ledger that your storefront and payment processor will connect to.
• GST/HST hub — the wider sales tax hub, if the tax questions are the whole problem.

Who this fits

This hub is written for incorporated online retailers running their own storefront, marketplace sellers on the large platforms, wholesalers and distributors selling to retailers, subscription-box and direct-to-consumer brands, and dropshippers who never touch the goods. It also fits a bricks-and-mortar retailer adding an online channel, where the new complication is that sales are suddenly leaving the province. Sellers of digital products or services face the same place-of-supply questions with none of the inventory ones.

How this runs remotely

EverStone CPA is a sole-practitioner CPA firm at 32615 South Fraser Way in Abbotsford, BC, working fully remotely — which suits a business that is already entirely digital. Storefront, marketplace and processor reports are exported or connected directly to the ledger, so there is nothing to deliver anywhere. Meetings happen by video, and GST/HST, PST and corporate returns are filed electronically. Because none of the work depends on location, a seller shipping from a Vancouver warehouse and one shipping from Ontario are handled the same way.