Most e-commerce sellers track their bank balance. Fewer track what is inside it. A month-end close is the process of verifying that every transaction in the period has been recorded correctly, that platform revenue matches payout reports, that fees are categorized correctly, that inventory reflects actual units moved, and that the financial statements at the end of the period can be trusted.
For marketplace sellers, month-end close has a specific challenge: revenue does not arrive daily or in a predictable pattern. Amazon generally settles seller accounts every two weeks, but reserves and deferred transactions can change cash timing. Shopify payouts happen on a schedule tied to your payout settings, settlement time, and bank processing. Walmart and Etsy have their own cycles. Closing the month correctly means reconciling each platform’s payout cycle against your books, not just looking at the bank total.
This checklist covers what a month-end close involves for a multi-channel e-commerce seller, why each step exists, and the most common places things go wrong.
Step 1: Reconcile platform revenue
Before recording anything as revenue, reconcile what each platform reports as settled to what actually landed in your bank account.
Amazon. Amazon generally settles seller accounts every two weeks. Each settlement includes gross sales, returns, FBA fees, referral fees, advertising charges, and any reserve amounts. The Amazon Seller account generates a settlement report for each pay period. The deposit to your bank is the net figure after all Amazon fees, adjustments, reserves, and deferred transactions have been deducted or held. Month-end reconciliation for Amazon means matching the settlement reports covering the period to the corresponding bank deposits, verifying that every deposit corresponds to a settlement report and that no settlements are unrecorded.
Shopify. Shopify Payments for Canadian stores has a three-business-day minimum settlement time, before any additional bank processing time. Your actual cash timing also depends on your payout schedule and payment method. Each payout appears as a single bank deposit covering multiple orders and their associated payment processing fees. The Shopify Payouts report in your admin panel shows the gross order amount and the processing fees deducted before payout. The deposit amount is net of those fees. Reconciliation means matching each payout deposit in your bank to the corresponding Shopify payout report and recording gross sales and processing fees separately.
Walmart. Walmart Canada generally pays sellers on a bi-weekly cycle, subject to the seller agreement, new-seller holds, and other payment holds. Each payment represents net proceeds from sales after marketplace fees have been deducted. The payment details report in Walmart Seller Centre shows the gross sales, fees, and adjustments that produced each deposit. Reconcile each payment against its corresponding report before recording revenue.
Etsy. Etsy deposits funds according to the schedule shown in the seller’s Payment Account, subject to reserves, holds, and other adjustments. The Etsy Payments deposit summary shows gross sales, Etsy fees, payment processing fees, and any offsets. The deposit amount is net of all Etsy deductions. Record gross sales and fee deductions separately, reconciling each deposit to its summary.
For any platform, the key question is whether the gross sales figure recorded in your books matches the platform’s report for the period, and whether the fees deducted before payout are recorded in the correct expense categories.
Step 2: Categorize platform fees
Platform fees should not be recorded as a single line item. Each fee type has a different cost character and belongs in the appropriate expense account.
Referral fees and marketplace selling fees. The percentage-of-sale fees charged by the platform for each transaction. These belong in a selling expenses or merchant fees account.
FBA fees. Amazon FBA fees include fulfillment fees per unit, storage fees, and other operational charges. Storage fees and fulfillment fees can be tracked separately if you want to analyze the cost of the FBA model versus alternatives.
Payment processing fees. Shopify payment processing, Etsy payment processing, and similar per-transaction fees are a cost of accepting payment, separate from the platform’s selling fee. Recording them in a dedicated payment processing account makes it easier to analyze your blended processing rate across channels.
Advertising spend. Amazon Sponsored Products, Meta ads, and Google Ads are marketing costs, not selling fees. These belong in an advertising expense account, separate from marketplace fees. Blending advertising with marketplace fees makes it impossible to analyze either correctly.
Subscription and monthly platform fees. Shopify monthly plan costs, professional seller plans, and any per-month platform fees are a fixed monthly cost that does not vary with sales volume. Keep these separate from variable transaction-based fees.
Step 3: Record COGS and update inventory
Cost of goods sold must reflect units sold during the period, at the correct landed cost per unit.
Match units sold to COGS. Every unit sold during the month needs a corresponding COGS entry. If your accounting software integrates with your inventory management system, this may happen automatically. If not, a manual COGS journal entry is required based on units sold multiplied by landed cost per unit.
Review inventory levels. Confirm that the inventory balance on your balance sheet reflects the units actually on hand at month end. For FBA sellers, Amazon provides an inventory report showing units at each fulfillment centre. For sellers using a third-party logistics provider or in-house fulfillment, confirm units with the warehouse.
Record new inventory received. Any inventory that arrived during the month and was not yet recorded should be added to the inventory balance at full landed cost: purchase price plus freight, duties, brokerage, and import costs, less recoverable import GST/HST.
Return and reimbursement adjustments. Customer returns, lost inventory reimbursements, and damaged goods reimbursements all affect inventory and revenue. Amazon reimbursements for lost or damaged FBA inventory are compensation for an asset loss, not ordinary product sales. Record them in the appropriate account.
Step 4: Review GST/HST and sales tax
For Canadian GST/HST registrants, each month-end is an opportunity to confirm that tax obligations are being tracked correctly.
GST/HST on Canadian sales. If you are registered for GST/HST, you should be tracking GST/HST collected on each taxable Canadian sale. Most accounting software handles this automatically when transactions are coded correctly. At month-end, verify that the GST/HST collected balance is consistent with the volume of taxable sales for the period.
Marketplace-collected GST/HST. Platform treatment is not uniform. Amazon.ca and Etsy may collect and remit GST/HST on certain Canadian marketplace transactions, often depending on whether your GST/HST registration number is on file and how the transaction is structured. Shopify storefront sales are different: Shopify Tax can help calculate tax and monitor liabilities, but it does not file or remit GST/HST for a normal Shopify merchant. At month-end, separate amounts the marketplace remitted from amounts collected by your business and still payable. Amounts collected and remitted by a platform should not be recorded as your GST/HST liability. Amounts that flow through to you for remittance should be recorded as a liability, not revenue.
Input tax credits. Review GST/HST paid on business expenses during the month. Supplier invoices, freight bills, customs brokerage fees, and software subscriptions often carry GST/HST that may be recoverable as an input tax credit (ITC) if you are registered, the expense relates to commercial activity, and you have the required support. Record these separately and track them for your next GST/HST return.
US and international sales tax. If you have US sales tax nexus, confirm that your platforms are collecting the applicable state sales tax where required. For marketplace sales, Amazon, Walmart, and Etsy may collect and remit in states where marketplace facilitator rules apply. For Shopify direct-to-consumer sales, verify that your tax settings are configured correctly in the states where you have nexus, because a standard Shopify storefront is not the same as a marketplace-facilitated sale.
Step 5: Clear accounts payable
Supplier invoices received. Any supplier invoices received during the month that have not yet been paid should be recorded as accounts payable. Record invoices when received, not when paid. Recording them on receipt gives you an accurate view of what the business owes.
Freight and logistics invoices. Freight forwarder invoices, customs brokerage statements, and third-party logistics storage invoices often arrive weeks after the corresponding shipment. Record them in the period they relate to, not the period they are paid, to avoid distorting landed cost and COGS.
Advertising invoices. Confirm that advertising platform invoices for the month have been recorded. Google Ads and Meta often charge on a rolling threshold basis, so the billing date may not correspond to when the charges were incurred. Record the expense in the period the ads ran.
Step 6: Bank reconciliation
The bank reconciliation confirms that your accounting records match the bank statement for the period.
Match each bank transaction for the month to a recorded transaction in your books. At month end, the accounting balance should equal the bank statement ending balance, adjusted for any deposits in transit not yet cleared and any outstanding payments not yet processed by the bank.
For e-commerce sellers, the most common reconciling items are platform deposits in transit (settlements initiated before month-end but deposited after), and supplier payments that have not yet cleared.
For credit cards used for business expenses, reconcile each card separately against its statement. Record all charges in the correct expense categories during the reconciliation, not afterward.
Step 7: Produce month-end reports
After the reconciliation steps are complete, generate the following:
Profit and loss for the month. Review gross revenue, COGS, gross margin, operating expenses, and net income. Compare to the prior month and prior year if available.
Gross margin by channel or SKU. If you track sales by channel or product, generate a margin report showing revenue, COGS, and gross margin for each. This is where the work of tracking landed cost and categorizing fees separately pays off.
Cash flow summary. Review cash movement for the month: cash from operations, inventory purchases, advertising spend, and any financing payments.
Accounts receivable and payable aging. Confirm that no outstanding amounts have been overlooked and that nothing has aged past its expected settlement date.
Common mistakes
Recording net settlements instead of gross sales and fees separately. When a net deposit from Amazon, Shopify, or another platform is recorded as a single revenue line, gross revenue is understated and the fee expense disappears. Margin analysis, fee-rate calculations, and category reporting all depend on recording gross sales and fees as separate line items.
Missing platforms. Sellers often have revenue from a channel that does not flow through their primary accounting workflow. Etsy deposits, Walmart payments, or a direct wholesale channel may be recorded inconsistently or missed entirely. Every revenue source needs a reconciliation step.
Ignoring inventory movement. Skipping the COGS and inventory step does not mean inventory is unchanged. It means the balance sheet shows a stale number while the income statement shows overstated gross profit.
Treating all advertising as a single category. Amazon PPC, Meta ads, and Google Ads have different cost structures and drive revenue through different paths. Combining them into a single advertising line prevents meaningful channel-level profitability analysis.
Reconciling the bank balance rather than each transaction. Many sellers confirm that the ending balance is roughly correct rather than going transaction by transaction. Errors accumulate when individual transactions are not matched. The test is not that the ending balance is close but that every transaction has a corresponding record.
Related Guides
- How to Read a Shopify Payouts Report explains how Shopify payout reports are structured and how to match them to bank deposits.
- Advertising Spend and True Profitability covers how advertising costs should be tracked to produce meaningful channel and SKU profitability data.
- Landed Cost for Canadian E-Commerce Sellers explains how to calculate and record landed cost so that COGS reflects full acquisition cost per unit.
- Multi-Channel Reconciliation: Amazon, Shopify, and Walmart covers the reconciliation challenge when revenue arrives from multiple platforms in different cycles.
Scope of This Guide
This guide covers the month-end close process for marketplace sellers operating in Canada. It does not cover:
- Payroll accounting or payroll tax remittances
- GST/HST return preparation or filing mechanics
- US sales tax return preparation
- Year-end financial statement preparation
- Audit or review engagement requirements
A month-end close done consistently produces a set of books that are current, reconciled, and usable for decisions. A year-end reconciliation done once at tax time, working backward through twelve months of unreconciled transactions, is a different exercise. It costs more, produces lower-confidence numbers, and provides no useful information during the year when decisions actually need to be made.
The difference is not accounting software or automation. It is a consistent process applied at the end of each period before the next one begins.