Shopify Bookkeeping Canada — CPA Step-by-Step Guide (2026)

Shopify bookkeeping in Canada is not standard bookkeeping. Shopify Payments bundles your gross sales, refunds, shipping charges, and platform fees into a single net deposit that hits your bank account every few days. If your bookkeeper records that deposit as revenue, your financial statements are wrong — your gross revenue is understated, your expenses are incomplete, and your GST/HST return is likely inaccurate. This guide walks you through exactly how to set up proper Shopify bookkeeping as a Canadian seller, from choosing the right accounting software to automating your reconciliation and staying compliant with the CRA.

Whether you are just starting your Shopify store or processing hundreds of orders per month, the principles here apply. We use this exact workflow with our e-commerce accounting clients at LedgerLogic, and it is the foundation of our e-commerce accounting approach for Canadian sellers.

Affiliate Disclosure: LedgerLogic is an A2X and Synder partner. We may earn a commission if you sign up through our links at no extra cost to you. We only recommend tools we use with our own clients.

Why Shopify Bookkeeping Is Different from Standard Bookkeeping

Most small business bookkeeping follows a straightforward pattern: revenue comes in, expenses go out, and your bank transactions map cleanly to your chart of accounts. Shopify breaks this pattern in several ways that trip up both business owners and general bookkeepers.

The payout problem. Shopify Payments sends you a net deposit every 1–3 business days. That single deposit is the result of dozens (sometimes hundreds) of individual transactions: gross sales, refunds, chargebacks, shipping collected from customers, Shopify transaction fees, and sometimes currency conversions. Recording the net deposit as "sales" means you are understating your revenue and hiding your true cost structure.

Multi-province GST/HST. If you ship physical goods across Canada, the tax rate depends on where your customer is located, not where you are. A seller in Alberta (5% GST) shipping to Ontario must charge 13% HST. Shopify collects this automatically at checkout, but your bookkeeping system needs to track what was collected by province so your GST/HST return is accurate. For a complete breakdown, see our e-commerce GST/HST guide.

Fees that look like expenses but are actually contra-revenue. Shopify transaction fees, payment processing fees, and chargeback fees reduce your payout but are not operating expenses in the traditional sense. How you classify them affects your gross margin, which affects how you evaluate your business health.

Refunds and chargebacks. These need to be recorded as reversals of the original transaction, not as expenses. A common mistake is booking refunds as a cost, which inflates both your revenue and your expenses.

The Three Methods for Recording Shopify Revenue

There are three approaches to recording Shopify data in your accounting software. We recommend Method 3 for any seller doing more than $5,000 per month in revenue.

Method 1 — Bank Deposit Method (Not Recommended)

You record the net deposit from Shopify as it appears in your bank account. This is the simplest approach but the least accurate. Your books will show lower revenue than reality, your fees are invisible, and your GST/HST collected is not broken out. If the CRA audits you, this method will not hold up.

Pros: Minimal effort.
Cons: Inaccurate revenue, invisible fees, GST/HST not tracked, audit risk.

Method 2 — Shopify Reports Method (Acceptable for Small Sellers)

You manually pull summary data from Shopify's built-in financial reports each month and enter journal entries in your accounting software. This gives you better accuracy than Method 1 but is time-consuming and error-prone as transaction volume grows.

Pros: More accurate, breaks out fees and taxes.
Cons: Manual, time-consuming, error-prone at scale, requires accounting knowledge.

Method 3 — Automated Reconciliation with A2X or Synder (Recommended)

You connect a middleware tool like A2X or Synder between Shopify and your accounting software (Xero is our recommendation). These tools automatically create properly categorised journal entries that match each Shopify payout to its underlying transactions.

A2X creates summary journal entries grouped by payout period. It maps gross sales, refunds, fees, shipping, and taxes into separate accounts. This is the industry standard for e-commerce accounting — most CPA firms that specialise in e-commerce use A2X.

Synder offers transaction-level detail rather than summaries. If you need to see individual order-level data in Xero, Synder is the better choice. It also handles Stripe, PayPal, and Amazon in one connector.

Pros: Accurate, automated, CPA-approved, GST/HST mapped correctly.
Cons: Monthly cost ($19–69 USD/month depending on plan).

Setting Up Xero and A2X for Shopify (Step by Step)

If you have decided on Method 3 (and you should), here is the exact workflow we use when onboarding Shopify sellers at LedgerLogic.

Step 1 — Set Up Your Xero Organisation

If you do not already have Xero set up for your Canadian business, start there. Choose the Standard plan at minimum — the Starter plan's 20-invoice cap is too restrictive for e-commerce. Configure your GST/HST registration number and default tax codes.

Step 2 — Configure Your E-commerce Chart of Accounts

Your chart of accounts needs e-commerce-specific revenue and expense categories. At minimum, you need separate accounts for: gross sales, refunds/returns (as contra-revenue), shipping revenue, Shopify fees, payment processing fees, and GST/HST collected. See our e-commerce chart of accounts template for the complete setup.

Step 3 — Connect A2X to Shopify and Xero

Install A2X from the Shopify App Store or directly from a2xaccounting.com. Connect it to both your Shopify store and your Xero organisation. A2X will pull your Shopify payout data and create journal entries mapped to your chart of accounts.

Step 4 — Map Your Accounts in A2X

A2X needs to know which Xero account each line item maps to. Map your sales, refunds, fees, shipping, and tax accounts. This is the step where most people make mistakes — if your mappings are wrong, every journal entry will be wrong. We audit these mappings for every client before the first posting.

Step 5 — Reconcile in Xero

Once A2X posts a journal entry for each Shopify payout, go to Xero's bank reconciliation screen and match the Shopify deposit in your bank feed to the A2X journal entry. If the amounts match, you are reconciled. If they do not, there is a mapping issue to investigate.

Step 6 — Set Up Dext for Expense Capture

Your Shopify-related expenses (shipping supplies, packaging, advertising, app subscriptions) still need to be captured. Dext automates receipt capture and pushes expense data into Xero. Snap a photo of receipts, forward email invoices, or let Dext fetch bills from supplier portals automatically.

GST/HST for Shopify Sellers in Canada

This is where most Shopify sellers in Canada get into trouble with the CRA. The rules are straightforward but the execution requires attention.

Registration threshold. If your worldwide taxable revenues exceed $30,000 in the last four consecutive calendar quarters, you must register for a GST/HST account. Even if you are below the threshold, voluntary registration lets you claim input tax credits on your business expenses. See the CRA's GST/HST registration page for full details.

Place of supply. The GST/HST rate you charge depends on where your customer receives the goods, not where you are located. Shopify handles this automatically at checkout if you configure your tax settings correctly. Your bookkeeping system needs to track what was collected by province so your return is accurate.

What Shopify collects vs. what you owe. Shopify calculates and collects the correct tax at checkout, but you are still responsible for remitting it to the CRA. The tax Shopify collects flows through your Shopify payouts — A2X or Synder will separate it into the correct tax accounts in Xero.

For a comprehensive breakdown of GST/HST rules for online sellers, see our complete e-commerce GST/HST guide.

Five Common Shopify Bookkeeping Mistakes (and How to Avoid Them)

These are the errors we see most frequently when onboarding new Shopify clients at LedgerLogic.

1. Booking Net Payouts as Revenue

The net deposit in your bank is not your revenue. It is your gross sales minus fees, refunds, and taxes. If you record $4,200 in bank deposits as revenue when your gross sales were $5,000, your financial statements are meaningless. Use A2X or Synder to break the payout into its components.

2. Ignoring Refunds Until Year-End

Refunds should be recorded when they occur, not batched at year-end. Under accrual accounting, a refund reverses the original sale. Delaying this distorts your monthly P&L and can affect your GST/HST return if the refund crosses a filing period.

3. Using the Wrong GST/HST Tax Codes in Xero

Xero offers multiple tax codes: GST at 5%, HST at 13%, HST at 15%, zero-rated, exempt, and out-of-scope. Assigning the wrong default to your revenue or expense accounts means every transaction posted through A2X will carry the wrong tax amount. We audit tax code defaults before any client's first filing period.

4. Not Reconciling Shopify Payouts to Bank Deposits

Shopify pays out every 1–3 business days. Each payout should match a corresponding A2X journal entry in Xero. If you are not matching these, errors compound silently. Reconcile weekly, not monthly.

5. Mixing Personal and Business Expenses

If your Shopify Payments deposit goes into a personal bank account, or you pay for business expenses on a personal card without reimbursement tracking, your books will be unreliable and the CRA will have grounds to question your expense claims in an audit.

When Should You Hire a Shopify Accountant?

You can handle your own Shopify bookkeeping if you are below $30,000 in annual revenue, sell in a single province, and are comfortable with Xero and A2X. Beyond that, the complexity escalates quickly.

Signs you need professional help:

• Your revenue exceeds $30,000 and you need to register for GST/HST
• You sell across multiple provinces with different tax rates
• You sell in both CAD and USD (multi-currency adds foreign exchange tracking)
• Your monthly transaction volume exceeds 200 orders
• You are behind on your bookkeeping by more than two months
• You need financial statements for a loan, investor, or business sale
• The CRA has contacted you about a review or audit

If any of these apply, our e-commerce accounting team can help. We handle Shopify reconciliation, GST/HST filing, and year-end tax preparation for Canadian sellers — fixed monthly fee, no hourly billing. You can also explore our bookkeeping services for a broader overview of what we offer.

Frequently Asked Questions