Wholesale Business Year-End Accounting Checklist: Prepare Your Books for Corporate Tax Filing in Canada
Wholesale Year-End Accounting: Complete Checklist and Corporate Tax Preparation Guide by Gondaliya CPA
Wholesale year-end accounting is essential for accurately closing your books and meeting tax obligations. Gondaliya CPA offers a detailed wholesale accounting checklist and guidance on wholesale corporate tax preparation to help your business stay compliant and organized.
Distribution runs on volume, credit terms and stock that is often in transit rather than on a shelf. Those three features are what make wholesale business accounting and tax services different from ordinary retail, and they are where a year end goes wrong.
Quick Summary
A wholesale year end turns on four things: where the cut-off falls, what your inventory actually cost, whether receivables and payables are complete, and whether the GST/HST on imports has been handled correctly. Everything else follows from those.
Reading time: 51 minutes.
Table of Contents
- Year End, Deadlines and What Actually Matters
- Cut-Off: Where the Year Really Ends
- What Your Inventory Actually Cost
- Receivables, Payables and Foreign Exchange
- GST/HST on Imports and Input Tax Credits
- Payroll, Assets, the Close and Working With Us
- Frequently Asked Questions
- The Year-End Checklist
- Wholesale Businesses We Serve
- Professional Guidance and Quick Reference
The Numbers That Matter
This article covers Canada, with Ontario and Toronto context, and reflects rules current to 2026. It applies to incorporated wholesalers, distributors, importers and business-to-business suppliers across food, consumer goods, industrial, electronics and building products. Figures marked illustrative are examples, not quotes, and any masked engagement notes end with “Figures changed for privacy.” This is educational information only and not tax or legal advice. Tariff classification, customs valuation and origin determination are matters for the Canada Border Services Agency and a licensed customs broker, and sit outside accounting scope.
Year End, Deadlines and What Actually Matters
Year End, Deadlines and What Actually Matters
The Framework
The Deadlines
| Obligation | Deadline | If Missed |
|---|---|---|
| T2 corporate return | Six months after fiscal year-end | 5% plus 1% per complete month, to twelve |
| Balance owing | Three months after year-end for eligible CCPCs, otherwise two | Interest from the due date |
| GST/HST return | Per your assigned reporting period | Penalty plus interest |
| Payroll remittances | Per your remitter type | Penalty and director liability |
| T4 and T4A slips | Last day of February | Penalty by slip count |
Two points that trade guidance regularly gets wrong. The balance owing is due measured from your year end, not from when you file, and the extra month is conditional on being an eligible CCPC rather than automatic. Assuming otherwise produces interest nobody budgeted for.
Records must be kept for six years from the end of the tax year they relate to. Guidance quoting seven years is not describing the Canadian requirement.
Choosing the Date
Most wholesalers use 31 December, but you are not required to. A year end falling after your peak shipping season closes with stock at its lowest and receivables collected, which makes the count faster and the picture more representative.
An importer with a heavy pre-Christmas cycle counting on 31 December is counting at the worst possible moment. Changing the year end later requires approval, so it is worth thinking about at the start.
The Four Things That Decide the Outcome
- Cut-off: Which transactions belong in the year, particularly stock in transit
- Inventory value: What the stock actually cost, landed and after rebates
- Complete ledgers: Whether receivables and payables capture everything
- Import tax: Whether GST/HST on imported goods and services has been handled
Everything else on a year-end checklist is administration. These four move the number.
Getting the Ledger Ready
Before any of that, the chart of accounts needs to support the analysis. Freight-in belongs separated from outbound freight, because one is inventory cost and the other is a selling expense. Supplier rebates need their own treatment rather than sitting in other income.
A wholesaler with a single “shipping” account and a single “purchases” account cannot produce a defensible cost of goods sold, and the gross margin that results means nothing.
Wholesalers arrive worried about deductions. The money is in the cut-off and the landed cost, and both are usually settled in the first afternoon. Figures changed for privacy.
Risk Warning: The balance owing runs from your year end, not from filing. Please confirm whether you qualify for three months or only two.
Cut-Off: Where the Year Really Ends
Cut-Off: Where the Year Really Ends
The Boundary
Cut-off is deciding what belongs in the year. For a wholesaler importing containers and shipping on credit terms, the boundary is not obvious, and errors here move both sides of the balance sheet at once.
Goods in Transit
Stock on a vessel at your year end is either yours or the supplier’s, and the answer comes from the shipping terms rather than the location.
| Situation | In Your Inventory? | Payable Recorded? |
|---|---|---|
| Title passed at the supplier’s port | Yes, wherever the container is | Yes |
| Title passes on delivery to your warehouse | No, still the supplier’s | No |
| Goods received, invoice not yet arrived | Yes | Yes, accrued |
| Invoice received, goods not yet shipped | No | Prepayment, not a purchase |
| Goods shipped to a customer before year end | Depends on your own terms | Revenue follows the same test |
| Goods sold and awaiting pickup | Depends on the terms of sale | Same |
The commercial terms on the purchase order settle it. Contracts commonly specify an internationally recognised shipping term, and that term determines the point at which risk and title move.
A distributor has three containers on the water at 31 December with a landed value of roughly $310,000. Under terms where title passed at the origin port, all three are inventory and the corresponding payable is recorded. Omitting them understates inventory and payables by the same amount, leaving the balance sheet balanced but the working capital position and cost of goods sold both wrong. Figures changed for privacy.
Notice the trap in that example. Because omitting both sides keeps the accounts in balance, nothing obviously breaks. It has to be checked deliberately.
The Same Test on the Sales Side
Revenue is recognised when control of the goods transfers to the customer, which for most wholesale sales means on shipment or delivery according to your own terms.
A shipment that left your dock on 30 December on terms where title passes at your dock is revenue that year, with the cost released alongside it. One that ships on 2 January is not, even if the invoice was raised in December.
Invoicing in advance of shipment is the version of this that inflates a year. The amount is a customer deposit until the goods move.
Consignment
Stock placed with a customer on consignment is still yours until they sell it. It has to be counted and valued even though it is in somebody else’s building.
Stock you hold on consignment from a supplier is not yours and not a payable. You have possession without ownership.
Get written confirmation from the consignee of what they held at your year-end date. In distribution these balances can be significant and they are routinely forgotten in both directions.
Returns Around the Boundary
Customer returns received before year end reverse the sale and put resaleable stock back into the count. Returns received afterwards belong to the following period.
Where returns are material and predictable, an estimate against year-end sales may be warranted, based on your own history rather than a round figure.
Returns to your own suppliers work the same way. A debit note raised but not accepted is not yet a reduction of the payable.
Containers in transit omitted from both inventory and payables is the classic wholesale cut-off error. Nothing looks wrong because the balance sheet still balances. Figures changed for privacy.
Key Stat: Ownership of goods in transit follows the shipping terms, not the location. Please check the purchase order terms, not the container tracking.
What Your Inventory Actually Cost
What Your Inventory Actually Cost
The Cost
Landed Cost
| Cost | In Inventory? | Why |
|---|---|---|
| Supplier invoice price | Yes | The base purchase cost |
| Customs duty | Yes | Non-recoverable cost of acquiring the goods |
| Ocean or air freight inbound | Yes | Cost of bringing stock to its location |
| Customs brokerage and clearance fees | Yes | Directly attributable to the import |
| Drayage and inbound trucking | Yes | Part of getting goods to the warehouse |
| Supplier rebates and volume discounts | Reduces | Lowers what the goods actually cost |
| GST paid at the border | No | Recoverable as an input tax credit |
| Warehouse rent and handling | Generally no | Period cost in a distribution business |
| Outbound freight to customers | No | A selling cost |
The GST line is the one that catches importers. Tax paid at the border is recoverable through an input tax credit where you are registered, so it does not belong in inventory cost. Duty is different: it is not recoverable and it does belong.
Supplier Rebates and Volume Discounts
This is the wholesale-specific point that gets handled wrongly almost everywhere.
Rebates, volume allowances, early payment discounts and year-end supplier bonuses reduce the cost of the goods they relate to. They are not other income and they are not a separate revenue line.
Booking a rebate as income overstates both revenue and cost of goods sold. Gross margin looks worse than it is, the rebate looks like a windfall rather than a negotiated price, and any margin analysis built on it is misleading.
A distributor receives a $46,000 annual volume rebate on a supplier line. Recorded as other income, reported cost of goods sold on that line is overstated and margin appears roughly three points lower than reality. Applied against the cost of the goods, both figures correct and the true landed cost of the line becomes visible for pricing. Figures changed for privacy.
Where a rebate relates to stock still on hand at year end, part of it should reduce the carrying value of that inventory rather than all of it hitting cost of goods sold.
Allocating Across a Shipment
A container holds several product lines at different values. Freight, duty and brokerage have to be spread across them.
- Allocate duty at the rate applying to each line, since rates differ by product
- Allocate freight on a consistent basis, typically value, weight or volume
- Use the same basis each time so periods compare
- Keep the commercial invoice, the customs accounting document and the broker invoice together
- Post the allocation on receipt, not when the broker bills you
Valuation Method and Write-Downs
Inventory is valued on a consistent basis, with first in, first out and weighted average cost both acceptable. Changing method between years, particularly in a poor year, invites the obvious question.
Stock is carried at the lower of cost and net realisable value. In distribution that bites on discontinued lines, superseded models, damaged goods and anything with a dated code.
Support the write-down with evidence: the clearance price achieved, the supplier’s discontinuation notice, an inspection record. A figure chosen at year end to produce a result is not a write-down.
Counting
A full count at year end is the minimum. Cycle counting through the year is better, because a variance is traced while it is still explainable.
Count sheets signed and dated are the support. Closing inventory moves taxable income dollar for dollar, and it is the one figure on the return that nobody else documents for you.
Volume rebates sitting in other income is the wholesale error we correct most often. The business had been pricing a whole product line off a cost that was never real. Figures changed for privacy.
Risk Warning: Supplier rebates reduce the cost of goods, not other income. Please check where yours are landing before you price off that margin.
Receivables, Payables and Foreign Exchange
Receivables, Payables and Foreign Exchange
The Ledgers
Ageing the Receivables
Wholesale sells on terms, so the receivable ledger is the business. Age it before you close and read what it says.
- Agree the ageing total to the general ledger control account
- Investigate credits sitting unapplied against invoices
- Identify accounts beyond terms and the reason
- Confirm balances with significant customers where practical
- Separate genuine disputes from slow payment
Unapplied credits are the quiet problem. A customer with a $40,000 balance and $12,000 of unapplied credit notes does not owe $40,000, and the ageing overstates what is collectible.
Bad Debts and Doubtful Accounts
Two different things get confused here.
A bad debt written off is deductible where the amount was included in income and the debt has become uncollectible. Keep the invoice, the record of collection attempts and the write-off decision.
A reserve for doubtful accounts is a separate mechanism with its own conditions, based on a reasoned assessment of specific accounts rather than a blanket percentage.
A general provision struck as a round percentage of the ledger is an accounting estimate rather than a supported tax position. Where you want the deduction, work from the accounts themselves.
Completing the Payables
The payables ledger is complete when everything received has been recorded, whether or not the invoice arrived.
- Accrue goods received but not invoiced, matched to receiving records
- Accrue freight, duty and brokerage on shipments already landed
- Accrue professional fees for work already performed
- Include accrued payroll and vacation pay earned but not taken
- Reconcile major supplier statements to your ledger
Supplier statement reconciliation is worth the effort in distribution because volumes are high and a missing invoice is easy to overlook. It also finds credits the supplier has issued that you never recorded.
Foreign Exchange
Importers hold payables in United States dollars and sometimes other currencies, and may hold receivables the same way.
Transactions are recorded at the rate on the transaction date. Monetary balances outstanding at year end are translated at the year-end rate, and the difference is a foreign exchange gain or loss.
| Item | Treatment at Year End |
|---|---|
| Foreign currency payable outstanding | Translated at the year-end rate, difference to gain or loss |
| Foreign currency receivable outstanding | Same treatment |
| Foreign currency bank balance | Translated at the year-end rate |
| Inventory purchased in foreign currency | Stays at the rate when the cost was recorded |
| Realised gain or loss on settlement | Recognised when the payment is made |
Note that inventory does not get retranslated. Once the cost is recorded it stays in Canadian dollars at that rate. Retranslating stock at the year-end rate is a common error in importer books.
Whether a particular exchange gain is on income or capital account depends on the underlying transaction, and for a trading business dealing in goods it is usually on income account. Where you are also holding foreign currency for other reasons, please have the position reviewed.
Unapplied credit notes and inventory retranslated at the year-end rate are the two importer ledger errors we find most. Neither is obvious from the trial balance. Figures changed for privacy.
Key Stat: Inventory is not retranslated at year end. Please leave it at the rate when the cost was recorded and translate only the monetary balances.
GST/HST on Imports and Input Tax Credits
GST/HST on Imports and Input Tax Credits
The Sales Tax
Tax on Imported Goods
GST is payable on commercial goods imported into Canada. It is assessed and collected at the border, typically paid by your broker on your behalf and billed back to you.
Where you are registered and the goods are for use in your commercial activity, that tax is recoverable as an input tax credit. The document supporting the claim is the customs accounting document, not the broker’s invoice.
That distinction matters. Brokers bill a single amount covering duty, GST, brokerage and disbursements. Claiming the credit off the broker invoice total, or missing the tax entirely because it is buried in a lump sum, are both common.
Imported Services and Intangibles
This is the part wholesalers most often miss, and it is a genuine self-assessment obligation rather than the border tax.
Where you acquire services or intangible property from a non-resident supplier for use in Canada, tax may need to be self-assessed on that acquisition rather than charged by the supplier. Software licensing, design work, overseas agent services and similar arrangements can fall into this.
A registrant using the acquisition entirely in commercial activity is often in a neutral position, because the tax self-assessed is matched by the credit. Where use is not entirely commercial the position is not neutral, and where nothing was self-assessed at all the exposure is real.
The rules here are technical and depend on the supply, the supplier and your own status. Please have your arrangements reviewed rather than assuming nothing applies.
Claiming and Timing
- Claim credits on the invoice date where you are entitled, not when you pay
- Hold documentation showing the supplier’s registration number for domestic purchases
- Hold the customs accounting document for import tax
- Reconcile the tax accounts to the returns filed each period
- Credits generally have to be claimed within four years
The four-year window is worth checking on an importer that has grown quickly. Tax paid at the border in an earlier year and never claimed may still be recoverable, but not indefinitely.
Exports and Zero-Rating
Goods exported from Canada are generally zero-rated, meaning no tax is charged while credits on inputs remain recoverable.
This depends entirely on proof that the goods left Canada: the commercial invoice showing the foreign customer and destination, and shipping documentation linked to the specific sale. A sale to a foreign customer delivered to a Canadian address is a different case.
Filing Frequency
Your reporting period is assigned based on taxable supplies, with annual filing below $1.5 million, quarterly between $1.5 million and $6 million, and monthly above that. Growing wholesalers cross those thresholds without noticing and can find their frequency has changed.
Due dates follow the period. Monthly and quarterly filers report one month after the period ends; annual filers have a different rule tied to the fiscal year end. Guidance quoting a single fixed date for all annual filers is not accurate.
Reconciling Before You File
At year end, agree the tax collected and tax paid in the ledger to what was actually reported across the periods. Differences are common in high-volume distribution and they are far easier to explain now than in two years.
Where you also sell into other provinces, place of supply rules determine the rate based on where the goods are delivered rather than where you are.
Import tax buried in a lump-sum broker invoice and never claimed is money sitting on the table. On a busy importer it adds up quickly across a year. Figures changed for privacy.
Pro Tip: Please claim import tax off the customs accounting document rather than the broker’s invoice total. The two are not the same figure.
Payroll, Assets, the Close and Working With Gondaliya CPA
Payroll, Assets, the Close and Working With Us
The Close
Payroll Reconciliation
Before slips go out, agree three things to each other: the payroll register, the general ledger, and what was actually remitted to the CRA across the year.
- Gross earnings per the register against wage expense in the ledger
- Income tax, CPP and EI withheld against total remittances
- Employer CPP and EI recorded and remitted
- Taxable benefits included: vehicle use, allowances, parking where applicable
- Accrued vacation pay earned but not taken
- Employee details accurate before slips issue
Discrepancies found now are corrected. Discrepancies found later come with a review. T4 and T4A slips are due by the last day of February.
Ontario wholesalers operating warehouses should also reconcile workplace insurance premiums against insurable earnings and confirm the classification still reflects what the business actually does.
Fixed Assets
Distribution carries real assets: racking, forklifts, delivery vehicles, warehouse systems.
| Asset | Class | Rate |
|---|---|---|
| Forklifts, pallet jacks, warehouse equipment | Class 8 | 20% |
| Racking and shelving, free-standing | Class 8 | 20% |
| Delivery vehicles and trucks | Class 10 | 30% |
| Passenger vehicles above the ceiling | Class 10.1 | 30%, capped |
| Computers, scanners, terminals | Class 50 | 55% |
| Warehouse fit-out in leased premises | Class 13 | Over the lease term |
| A warehouse you own | Class 1 | 4% |
Bill C-15 received Royal Assent on 26 March 2026, reinstating the accelerated investment incentive for most depreciable property acquired after 2024 and available for use before 2030, with leasehold improvements among the excluded classes. If you re-equipped a warehouse recently and the return applied the plain half-year rule, the claim is worth reviewing.
Keep an asset register with purchase date, cost, class, claims to date and disposals. Model recapture before selling equipment, since larger first-year claims make it more likely.
From Trial Balance to Return
The trial balance maps to GIFI codes, which populate the balance sheet and income statement schedules on the T2. Schedule 8 carries capital cost allowance, and Schedule 1 reconciles accounting income to taxable income.
Note that the notes checklist schedule records who prepared the statements and on what basis, rather than being a financial statement in itself. Statements for a lender or a supplier credit application are typically prepared as a compilation engagement under CSRS 4200.
Adjusting Entries Worth Documenting
- Inventory adjustment from the physical count, with the sheets attached
- Write-downs on discontinued or damaged stock, with evidence
- Goods in transit brought onto the books with the matching payable
- Supplier rebates applied against cost rather than income
- Accrued payroll, vacation pay and unbilled supplier costs
- Foreign exchange translation on monetary balances
- Bad debt write-offs with collection evidence
- Capital cost allowance for the year
Each entry needs support behind it. A journal moving six figures with a one-line description is exactly what gets questioned.
What Draws a Review
- Inventory that never reconciles to a physical count
- Gross margin moving sharply with no explanation
- Import tax credits claimed without customs documentation
- Zero-rated export sales with no shipping proof
- A doubtful debt provision struck as a round percentage
- Personal spending in the accounts and a growing shareholder loan
Our CRA audit guide covers what a review involves. A related sector walkthrough sits in our year-end checklist for electronics resellers, which covers similar ground for a narrower product category. Importers specifically may also want our importer accounting and tax services.
How We Work With Wholesalers
We support incorporated wholesalers on a flat annual fee covering bookkeeping with landed cost build-up, cut-off and goods in transit procedures, supplier rebate treatment, inventory count planning and write-down support, receivable ageing and bad debt review, payables completion and supplier statement reconciliation, foreign exchange translation, GST/HST including import tax and self-assessment, payroll and slips, the asset register, GIFI mapping and the corporate return.
Pricing is quoted before any work begins, including HST, with a one-business-day response.
Getting Started
Bring three things: a recent import shipment file with the customs and broker documents, your inventory valuation report, and your last filed corporate return. Those show us whether landed cost is built properly, whether the stock figure is supportable, and what needs fixing.
Contact Gondaliya CPA at info@gondaliyacpa.ca, call 647-212-9559, or send us a message.
A shipment file and an inventory report settle a wholesale year end between them. One shows the landed cost method, the other whether the stock figure means anything. Figures changed for privacy.
Pro Tip: Please reconcile major supplier statements before closing. It finds missing invoices and credits you were never given.
FAQs on Wholesale Year-End Accounting
Frequently Asked Questions
FAQ
When is my balance owing actually due?+
Two months after your fiscal year end, or three for an eligible CCPC meeting the conditions. It runs from the year end rather than from when you file, and the extra month is not automatic.
Are goods in transit my inventory at year end?+
It depends on the shipping terms. Where title passed at the supplier’s port, they are yours wherever the container is. Where title passes on delivery, they are not.
Why does omitting goods in transit go unnoticed?+
Because leaving out both the inventory and the payable keeps the balance sheet in balance. It has to be checked deliberately.
How do I treat consignment stock?+
Stock you placed with a customer is still yours and must be counted. Stock you hold from a supplier is not yours and is not a payable. Get written confirmation at the year-end date.
What goes into landed cost?+
Supplier price plus customs duty, inbound freight, brokerage and drayage, less supplier rebates. GST paid at the border stays out because it is recoverable.
Where do supplier rebates belong?+
Against the cost of the goods they relate to, not in other income. Recording them as income overstates both revenue and cost of goods sold and distorts margin.
What if the rebate relates to stock I still hold?+
Part of it should reduce the carrying value of that inventory rather than all of it flowing through cost of goods sold.
When can I write down slow-moving stock?+
Where net realisable value is below cost, supported by clearance results, a discontinuation notice or an inspection record rather than a year-end judgement.
What is the difference between a bad debt and a doubtful account reserve?+
A bad debt written off requires the debt to have become uncollectible. A reserve is a separate mechanism based on a reasoned assessment of specific accounts, not a blanket percentage.
Do I retranslate inventory at the year-end rate?+
No. Inventory stays at the rate when the cost was recorded. Only monetary balances such as payables, receivables and foreign currency bank accounts are translated.
How do I claim GST paid at the border?+
As an input tax credit supported by the customs accounting document, not the broker’s invoice total. The two are not the same figure.
Do I have to self-assess tax on imported services?+
Possibly. Services and intangibles acquired from a non-resident for use in Canada can require self-assessment. The rules are technical, so please have your arrangements reviewed.
How long do I have to claim input tax credits?+
Generally four years. An importer that has grown quickly should check whether border tax from earlier periods is still recoverable.
What is my GST/HST filing frequency?+
Assigned based on taxable supplies: annual below $1.5 million, quarterly between $1.5 million and $6 million, monthly above. Growing wholesalers cross thresholds without noticing.
How long must I keep records?+
Six years from the end of the tax year they relate to. Guidance quoting seven years is not describing the Canadian requirement.
Should my year end be 31 December?+
Not necessarily. A year end after your peak shipping season closes with stock at its lowest and receivables collected, which makes the count faster and the picture more representative.
Sixteen questions and two underneath most of them: where does the year actually end, and what did the goods really cost. Those two settle most wholesale files. Figures changed for privacy.
The Wholesale Year-End Checklist
The Year-End Checklist
Quick Reference
Cut-Off and Inventory
- Check the shipping terms on every shipment in transit at year end.
- Bring owned goods in transit onto the books with the matching payable.
- Count your own stock held on consignment elsewhere.
- Exclude consignment stock you hold for suppliers.
- Apply the same ownership test to shipments leaving before year end.
- Treat invoicing ahead of shipment as a customer deposit.
- Count all stock and keep signed, dated sheets.
- Build landed cost from price, duty, freight, brokerage and drayage.
- Keep recoverable border GST out of inventory cost.
- Apply supplier rebates against cost, not to other income.
- Allocate part of a rebate to stock still on hand.
- Write down discontinued and damaged stock with evidence.
Ledgers and Foreign Exchange
- Age the receivables and agree the total to the control account.
- Investigate unapplied credits before relying on the ageing.
- Support bad debt write-offs with collection evidence.
- Base any doubtful account reserve on specific accounts, not a percentage.
- Accrue goods received but not invoiced.
- Accrue landed freight, duty and brokerage on shipments already in.
- Reconcile major supplier statements to your ledger.
- Translate monetary balances at the year-end rate.
- Leave inventory at the rate when the cost was recorded.
Tax, Payroll and Filing
- Claim import tax from the customs accounting document.
- Review whether imported services require self-assessment.
- Check whether unclaimed credits from earlier periods are still in time.
- Keep shipping proof on every zero-rated export sale.
- Confirm your GST/HST filing frequency still matches your revenue.
- Reconcile tax collected and paid to the returns filed.
- Agree the payroll register, ledger and remittances to each other.
- Include taxable benefits and accrued vacation pay.
- Review whether the reinstated investment incentive applies to recent purchases.
- Keep six years of records including count sheets and customs documents.
For help closing your wholesale year, contact Gondaliya CPA at info@gondaliyacpa.ca, call 647-212-9559, or book a free consultation.
Thirty-one points and two underneath them: settle the cut-off and build the landed cost. Nearly every wholesale correction we make comes back to one of those. Figures changed for privacy.
Wholesale Businesses We Serve
Industry Expertise
Which issue dominates differs by the business. Here are ten and the usual focus.
| Wholesale Business | Where the Year End Concentrates |
|---|---|
| Importer bringing in containers | Cut-off on goods in transit |
| Distributor buying domestically | Freight-in and supplier rebates |
| Food and perishable wholesaler | Dated stock and write-downs |
| Consumer goods distributor | Discontinued lines and clearance |
| Industrial and building supply | Slow-moving stock and long terms |
| Wholesaler placing consignment stock | Inventory held in other buildings |
| Business paying in foreign currency | Translation on monetary balances only |
| Wholesaler selling to other provinces | Place of supply on every sale |
| Business exporting from Canada | Zero-rating proof on each shipment |
| Behind on the books | Count and cut-off before returns |
- Importer bringing in containers: The shipping terms decide ownership.
- Distributor buying domestically: Rebates reduce cost, not other income.
- Food and perishable wholesaler: Dated stock is a write-down with evidence.
- Consumer goods distributor: Discontinued lines will not sell at cost.
- Industrial and building supply: Old stock ties up more cash than it looks.
- Wholesaler placing consignment stock: Still yours, still counted.
- Business paying in foreign currency: Inventory is not retranslated.
- Wholesaler selling to other provinces: Delivery decides the rate.
- Business exporting from Canada: No proof means no zero-rating.
- Behind on the books: Count first or the return gets prepared twice.
The business changes where the year end concentrates. It does not change the method, which is settle the cut-off, build the landed cost, then complete the ledgers. Figures changed for privacy.
Professional Guidance and Quick Reference
Guidance
Professional Guidance for Manufacturers: How Gondaliya CPA Handles Your File
Wholesalers lose money in a predictable set of ways: leaving containers in transit out of both inventory and payables so nothing looks wrong because the balance sheet still balances, costing stock at the supplier invoice when duty, freight and brokerage make the landed cost materially higher, booking supplier rebates as other income so margin on a whole product line reads several points low, retranslating inventory at the year-end rate when only monetary balances should move, striking a doubtful debt provision as a round percentage with nothing behind it, claiming import tax off a lump-sum broker invoice, and never checking whether imported services required self-assessment. Gondaliya CPA handles wholesale year-end accounting on a fixed annual fee.
We handle what decides the outcome: settling the cut-off from the shipping terms rather than the container location, bringing owned goods in transit onto the books with the matching payable, building landed cost from price, duty, freight, brokerage and drayage while keeping recoverable tax out, applying rebates against cost including the portion relating to stock still held, ageing the receivables and supporting write-offs properly, completing the payables against supplier statements, translating only monetary balances, and claiming import tax from the customs accounting document.
Our team starts with a shipment file and an inventory valuation report, because one shows the landed cost method and the other whether the stock figure means anything. Importer, domestic distributor or business-to-business supplier, you get clear advice and a fixed price before we start.
Quick Answers
- Goods in transit: Shipping terms, not location
- Landed cost: Price, duty, freight, brokerage
- Border GST: Recoverable, so not in cost
- Rebates: Reduce cost, never other income
- Consignment: Yours wherever it sits
- Inventory in foreign currency: Not retranslated
- Import tax: Claim off the customs document
- Imported services: Check self-assessment
- Balance owing: Two months, three if eligible
- Records: Six years, not seven
Who This Is For
- For: Incorporated wholesalers, distributors, importers and business-to-business suppliers across food, consumer goods, industrial, electronics and building products in Canada.
- Not For: Tariff classification, customs valuation and origin determination, which are matters for the Canada Border Services Agency and a licensed customs broker rather than accounting.
People Also Ask
Did the capital cost allowance rules change in 2026?+
Yes. Bill C-15 received Royal Assent on 26 March 2026, reinstating the accelerated investment incentive for most property acquired after 2024, with leasehold improvements excluded.
What do unapplied credit notes do to my receivables?+
They overstate what is collectible. A customer showing a large balance with credits sitting unapplied against it does not owe that amount.
Is a foreign exchange gain income or capital?+
It depends on the underlying transaction. For a trading business dealing in goods it is usually on income account, but please have other holdings reviewed.
Glossary of Key Terms
- T2: The corporation income tax return.
- Cut-off: Deciding which transactions belong in the year.
- Goods in transit: Stock owned but not yet physically received.
- Title transfer: The point at which ownership passes, set by the terms.
- Landed cost: Price plus duty, freight, brokerage and drayage.
- Supplier rebate: An allowance reducing the cost of goods.
- Consignment: Holding goods you do not own, or placing goods you do.
- Net realisable value: What stock will realistically sell for, less selling costs.
- Ageing: The analysis of receivables by how long they are outstanding.
- Bad debt: An uncollectible amount written off and deducted.
- Monetary balance: A payable, receivable or cash balance that is retranslated.
- Customs accounting document: The record supporting an import tax credit.
- Self-assessment: Accounting for tax on an acquisition the supplier did not charge.
- Zero-rated: Taxed at nil with input tax credits still recoverable.
- GIFI: The coding system mapping your accounts onto the return.
- Compilation engagement: Financial statements prepared under CSRS 4200.
Wholesale Year-End Readiness Check
This quick self-check indicates where your operation most likely has room. Please answer the six questions below.
Wholesale Year-End Readiness Check
Six quick questions on your business. No fee shown.
Points to raise with us:
This is a general prompt, not tax or legal advice or a quote. Your position depends on your full facts. For a real review, please book a free consultation.
Want a checklist to work from? You can download our free wholesale year-end checklist before your consultation.
Settle the cut-off from the shipping terms and bring owned goods in transit onto the books with the payable. Build landed cost from price, duty, freight and brokerage, keeping recoverable tax out. Apply supplier rebates against cost. Write down slow stock with evidence. Age the receivables and investigate unapplied credits. Translate only monetary balances. Claim import tax from the customs document. Please keep six years of records.
2026 Update — what is current: This article reflects rules current to 2026. The Class 8 rate of 20%, the Class 10 rate of 30%, Class 13 leasehold treatment over the lease term, the six-month T2 filing deadline, the 5% plus 1% per month late-filing penalty, the end-of-February slip deadline, the four-year window to claim input tax credits and the six-year retention requirement are unchanged. Bill C-15 received Royal Assent on 26 March 2026, reinstating the accelerated investment incentive for most depreciable property acquired after 2024 and available for use before 2030, with leasehold improvements among the excluded classes. Please note that the corporate balance owing is due two months after year-end, or three for an eligible CCPC meeting the conditions, measured from the year end rather than from the filing date; that records must be kept for six years and not seven; that GST/HST filing frequency follows your assigned reporting period rather than a single fixed annual date; that tax on imported goods is assessed at the border and recovered as an input tax credit supported by the customs accounting document, while tax on services and intangibles acquired from non-residents may require self-assessment under a separate set of rules; and that inventory purchased in a foreign currency stays at the rate when the cost was recorded rather than being retranslated at year end.
Wholesale Year-End Accounting Canada: How Gondaliya CPA Supports Distributors
Start with a shipment file
Gondaliya CPA settles the cut-off from the shipping terms rather than the container location, brings owned goods in transit onto the books with the matching payable, builds landed cost from price, duty, freight, brokerage and drayage while keeping recoverable tax out, applies supplier rebates against cost including the portion relating to stock still held, ages the receivables and supports write-offs properly, completes the payables against supplier statements, translates only monetary balances and claims import tax from the customs accounting document, on a flat annual fee including HST with a one-business-day response. Please book a free consultation.
Next Steps
Please book a free consultation with Gondaliya CPA and bring a recent import shipment file with the customs and broker documents, your inventory valuation report, and your last filed corporate return. Those three tell us immediately whether landed cost is built properly, whether the stock figure is supportable, and what remains to claim on the equipment, and where the documentation is thin. You will get a flat annual fee including HST before any work begins. If our content helps, please add gondaliyacpa.ca as a preferred source on Google.
Published: · Last updated:
Editorial policy: We research against CRA and CPA Ontario sources, fact-check the figures, and Sharad Gondaliya, CPA, reviews the content, which we update as the rules change.
Disclaimer: This article is educational information only and is not tax, legal, or financial advice. Figures marked illustrative are examples rather than quotes or guarantees. It reflects CRA rules current to 2026, including the $30,000 GST/HST threshold, the Class 8 rate, Class 13 leasehold treatment, the half-year rule, and the six-year retention requirement. Rates, limits and expensing rules change and outcomes depend on your specific facts. Please consult a licensed CPA before acting.
Sharad Gondaliya is a CPA Canada & CPA USA with 15 Years+ experience of Accounting, Tax, Payroll of Corporate Small Businesses as Tax Accountant. He is fully certified CPA Ontario and CPA USA and is well known among corporate small businesses for tax planning, efficient tax solutions, and affordable CPA services. Sharad is the Principal (Director) of Gondaliya CPA – Affordable CPA Firm in Canada. Licenses: CPA Ontario: 61040184 | CPA USA (MT): PAC-CPAP-LIC-033176 | CPA USA (WA): 57629 | CPA Firm License: 61330051 View Full Author Bio