There’s a special kind of grit you get from running an e-commerce business out of a place like Prince George, Terrace, or anywhere in the Cariboo. You’re not just a shop owner, are you? You’re the marketer, the shipper, the product designer, and the customer service rep. You do it all while juggling the unique logistics of life in the heart of British Columbia. It’s an incredible hustle. But when you’re wearing that many hats, one crucial piece often gets shoved to the bottom of the pile: your bookkeeping.
Let’s be real—nobody launches an online store because they’re passionate about reconciling bank statements. Yet, messy books are like a shaky foundation for a house. Sooner or later, cracks start to show up, usually right when tax season hits. Sound familiar? Don’t worry, you’re not alone. Let’s walk through some of the most common BC e-commerce bookkeeping mistakes and, more importantly, how you can fix them.
Mistake #1: Are You Mixing Up Platform Payouts with Actual Revenue?
This one is the absolute biggest trap. You see a $1,500 deposit from Amazon or Shopify hit your bank account, so you log it as $1,500 in sales. Simple, right? Nope. Unfortunately, it’s not that easy.
That deposit is your net amount. It’s what’s left after the platform has already taken its cut. Think of it like your own paycheque—your gross pay is always way higher than the cash that actually lands in your account after taxes and other deductions. To get a real picture of your business’s health, you have to track the gross sales. This means breaking down every single transaction into its parts:
- Gross Sales: The total amount your customer actually paid.
- Platform Fees: What Shopify, Amazon, or Etsy is charging you.
- Transaction Fees: The slice taken by the payment processor (like Stripe or PayPal).
- Shipping Costs: If you buy shipping labels directly through the platform.
- Refunds: Any money you’ve given back to customers.
Only when you track the gross revenue and properly categorize all these expenses can you truly understand if you’re making a profit.
Mistake #2: Is BC Sales Tax (PST & GST) a Total Mystery?
Sales tax can feel like you’re trying to navigate a maze blindfolded, especially here in BC. So many e-commerce sellers, particularly those on Amazon, make critical accounting errors with this. Here’s the simplified breakdown for anyone running an online store in northern British Columbia.
First, you’ve got the federal GST/HST. In Canada, you generally don’t have to register for, collect, or remit GST/HST until your worldwide taxable sales top $30,000 in four straight calendar quarters. This is known as the ‘small supplier’ threshold. Once you cross that line, you absolutely must register.
Then there’s BC’s Provincial Sales Tax (PST). And the rules are totally different. If you’re located in BC and sell taxable goods to customers who are also in BC, you are required to register, collect, and remit PST. That $30,000 small supplier threshold for GST/HST? It does not apply to PST in the same way. Assuming it does is a common and very costly mistake.
Here’s the crucial part: The sales tax you collect is not your money. You’re just holding it in trust for the government. The smartest thing you can do is open a separate savings account and transfer the tax you’ve collected into it regularly. Don’t touch it!
Mistake #3: Is Your Inventory Value More of a ‘Good Guess’ Than a Hard Number?
When you sell a product, the amount you originally paid for it becomes an expense called the Cost of Goods Sold (COGS). If you don’t accurately track what your inventory is worth, you can’t calculate your COGS correctly. And if your COGS is wrong, your profit is wrong. What does that mean? Your income tax filing will be wrong, too.
For many sellers, especially if you’re using Amazon FBA, your inventory is scattered everywhere. Some of it’s in your home office in Kamloops, some is in a warehouse in Ontario, and some is currently in a truck somewhere. Just ‘guesstimating’ its value at the end of the year simply won’t cut it. Inaccurate inventory tracking is one of the fastest ways to misunderstand your own profit margins and get into hot water with the CRA.
Mistake #4: Does Your Business Bank Account Also Pay for Your Personal Coffee Habit?
We get it. When you’re a solopreneur, the line between your personal and business life gets incredibly blurry. But your bank accounts can’t be.
Using your personal chequing account to buy inventory and then using your business credit card to pay for groceries is a practice called ‘commingling funds.’ It creates a massive, tangled-up headache for your bookkeeping. It makes it nearly impossible to see if your business is actually profitable and can throw up huge red flags for the CRA during an audit. This isn’t just a ‘best practice’—it’s a non-negotiable rule for any serious business owner.
Your Simple Action Plan: From Financial Fog to Bookkeeping Clarity
Feeling a little overwhelmed? Don’t be. Fixing these problems is just about creating a few simple systems. Here’s a checklist to get you on the right track.
Step 1: Separate Everything, Starting Today
If you haven’t already, march into your bank and open a dedicated business chequing account and get a business credit card. From this moment on, all business income goes into that account, and all business expenses come out of it. Period. No exceptions.
Step 2: Choose Your Tech Wisely (Spreadsheet vs. Software)
A detailed spreadsheet is definitely better than nothing, but it’s so easy to make mistakes, and it gets messy as you grow. Think about using user-friendly accounting software like QuickBooks Online or Xero. They can sync directly with your business bank account and e-commerce platforms, automating a huge chunk of the work.
Step 3: Create a Monthly ‘Money Date’ for Reconciliation
Set aside one or two hours every single month to sit down with your books. This is your ‘money date.’ During this time, you’ll categorize your transactions, double-check your sales tax numbers, and look over your profit and loss statement. A little bit of time each month will save you from a mountain of stress at year-end.
Step 4: Build Your BC Sales Tax Cheat Sheet
Create a simple document that answers these key questions:
- When do I charge GST/HST? (For sales outside BC)
- When do I charge PST + GST? (For sales inside BC)
- When do I charge nothing? (For sales outside Canada)
Keep this somewhere handy so you always know you’re charging the right amount.
Getting It Right is Easier Than You Think
Fixing your books isn’t about becoming an accounting wizard overnight. It’s about putting strong, simple systems in place so you can trust your numbers and get back to what you do best—growing your amazing business. The clarity you get from clean financials is the best tool you have for making smarter decisions.
While this guide is a fantastic starting point, every business is unique. To make sure your bookkeeping and tax strategies are perfectly tailored to your situation, it’s always best to get personalized advice. A professional can help you cut through the complexity and set you up for long-term success. If you’re ready to get clear on your numbers, reach out to a professional accountant to see how they can help with your taxes, bookkeeping, and advisory needs.
Frequently Asked Questions
I’m a small seller in Prince George. Do I really need to register for PST if I only sell a few things within BC each month?
In British Columbia, if you’re located in the province and you sell or lease taxable goods as part of your business, you generally have to register to collect PST. This is true regardless of your sales volume. While there are a few specific exemptions, it’s always safest to assume you need to register if you’re making sales to BC customers.
How do I properly record sales and fees from Amazon US in my Canadian books? Do I need to worry about currency conversion?
Yes, you absolutely do. For all your bookkeeping and tax needs in Canada, every transaction has to be recorded in Canadian dollars (CAD). When you get a payout from Amazon.com in USD, you have to convert the gross sale, all the fees, and the net deposit to CAD using the exchange rate from the date of the transaction. The Bank of Canada website is a great, reliable source for daily exchange rates.
I use Shopify Payments. Where can I find a report that breaks down the gross sale, fees, and net deposit for my books?
Shopify makes this pretty easy. Inside your Shopify admin, just go to ‘Finances’ and then click on ‘Payouts.’ If you click on any specific payout, you’ll see a detailed breakdown. It lists the gross sales, refunds, Shopify fees, and transaction fees—exactly what you need to record everything correctly.
What’s the difference between an expense and a Cost of Goods Sold (COGS) for my Etsy shop? Like, where do shipping supplies fit?
Great question! COGS refers to the direct costs of the actual products you sell. For your Etsy shop, this would be the cost of raw materials like fabric, beads, or wood. An expense, on the other hand, is a cost of running your business that isn’t directly tied to making a specific product. Shipping supplies (like boxes, mailers, and tape) are typically considered a business expense, not COGS. Your Etsy listing fees and marketing costs are also business expenses.