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Retail accounting comes down to three things: count every sale, separate the tax you collected from the money you earned, and keep the paperwork for six years. Most stores get into trouble at the till, not in the ledger, because sales tax sits inside the takings and nobody pulls it out until filing time.
What records does a shop have to keep?
The CRA’s list of income records includes sales invoices, cash register tapes, receipts, bank deposit slips and contracts. Each one should show the date, the amount and the source of the income. For a shop, that mostly means the daily till report, the card processor’s settlement and the bank deposit, all three of which should agree.
| Record | What it proves |
|---|---|
| Register tape or daily sales report | What you sold that day |
| Card processor statement | What the card companies paid you, after their charges |
| Bank deposit slip or statement | What reached the account |
| Supplier invoices | What you paid for stock and overhead |
| Retention | Six years from the end of the last tax year the record relates to |
When the three sales figures don’t match, find out why that week. A gap caused by a refund or a processor fee is easy to explain this week. Eighteen months on, it’s close to impossible to reconstruct.
A till that’s a few loonies off now and then is normal. A till that’s $50 short every Friday is a question for the schedule, not for the accountant.
How do you take the sales tax out of the takings?
If your till records tax-included totals, use the HST reverse calculator. An Ontario sale rung up at $565.00 is $500.00 of sales plus $65.00 of HST. That $65 isn’t yours. It’s owed to the CRA, less any input tax credits you’ve earned on your own purchases.
Say Mei runs a gift shop in Kingston and the register shows $1,130 for the day, tax included. Divide by 1.13 and you get $1,000 of sales and $130 of HST. If she books the whole $1,130 as revenue, her sales look 13% too high and her tax bill arrives as a surprise.
Do you have to charge it at all? That depends on size. A small supplier, with taxable revenues of $30,000 or less in any single calendar quarter and over the last four consecutive quarters, doesn’t have to register. The CRA’s page on when to register for and charge the GST/HST says that if you go over $30,000 in a single quarter, you start charging on the sale that took you over, and you then have 29 days to complete your registration. If you creep over across several quarters, you stop being a small supplier at the end of the month after the quarter you crossed. Most shops with a real storefront pass that line, so it pays to know your quarterly revenue before the month it happens. The GST/HST calculator works for any province and adds or removes the tax.
What does a worked retail margin look like?
You buy a jacket for $60 and sell it for $100 before tax. The profit margin calculator gives a 40% gross margin and a 66.7% markup. Both numbers describe the same $40 of profit. Margin is measured against the selling price, markup against the cost, so markup is always the bigger figure.
Mix them up and you underprice. If you want a 40% margin and apply a 40% markup to a $60 cost, you’d charge $84, and that only earns $24 of profit on $84, or about 28.6%. It’s an easy slip.
Why does stock matter so much?
Stock is money that’s gone out and not come back. A count at year end feeds the cost of goods sold, which sets the profit on your return. The CRA has rules on how inventory can be valued, and which method suits you is a question for your accountant, so check the CRA’s guidance before you choose one, then use the same method every year.
Do a count more often than once a year if you can. Monthly counts on your fast movers show theft, breakage and mis-rung sales while they’re still small.
What about refunds and gift cards?
Both blur the sales figure if you let them. Record a refund as its own line with the original receipt number, not as a negative sale buried in the day’s total. Record a gift card sale as money received for something not yet delivered, and treat the spending of it as the actual sale. Ask your accountant how to book each in your own system, since the right approach depends on how your till software reports them.
Which mistakes show up most?
Mixing personal and shop spending on one card. Letting refunds and gift-card sales blur the sales figure. Recording the processor’s net deposit as sales, which understates revenue by the fees. And paying staff cash without recording it, which breaks your payroll records. The payroll remittance calculator estimates what an employer sends each period.
If you buy with HST and claim it back, you need the supporting documents. The CRA lists the conditions: the purchase was for commercial activities, you were registered, tax was charged, you hold the paperwork and you claim on time. For most registrants the time limit is four years from the end of the reporting period.
The sources behind this page
Record types, the six year period, the small supplier threshold and the ITC conditions come from Canada Revenue Agency pages checked in September 2026. The Ontario HST rate is 13%, and the tax and margin figures come from our calculators. We’re an independent site, and no government body is behind it.
Frequently asked questions
What sales records must a retailer keep?
The CRA lists sales invoices, cash register tapes, receipts and bank deposit slips, each showing date, amount and source. Keep them six years from the end of the last tax year they relate to.
When does a shop have to register for GST/HST?
When taxable revenues pass $30,000 in a single calendar quarter or over four consecutive quarters. You then register within 29 days.
How do I find the HST in a tax-included price?
Divide by one plus the rate. In Ontario, $565 is $500 plus $65 of HST.
What is the difference between margin and markup?
Margin is profit as a share of the selling price, markup is profit as a share of cost. A $60 item sold for $100 has a 40% margin and a 66.7% markup.
Which inventory method should I use?
We could not confirm the CRA's rules for this page. Read the CRA inventory guidance and then stay with one method each year.
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