One shipment, four invoices, one number that matters
A typical inbound file holds the supplier's commercial invoice, the forwarder's freight bill, the customs broker's statement with duty and taxes, and a trucking charge to your dock. Landed cost means all of it, converted at the right exchange rates and spread across the units in the load, held in inventory value until those units sell. That is what ASPE 3031, the inventory standard for private companies, requires, and it is the only version of cost that makes a distributor's thin margin readable.
Lump freight, duty and brokerage into operating expenses instead and the statements lie twice: profit looks weak in a heavy buying month and flattering while you sell the stock down. On a wholesale margin of a few points, a missing cost component can turn a line you believe earns money into one that quietly does not.
| Cost on the shipment file | Where it belongs |
|---|---|
| Supplier invoice, converted to Canadian dollars | Inventory value |
| Ocean or air freight and inbound drayage | Inventory value |
| Customs duty and brokerage fees | Inventory value |
| GST paid at the border | GST recoverable, claimed as an input tax credit |
| Warehouse rent and 3PL storage | Operating expense in the period |
| Outbound freight to customers | Selling expense, never product cost |
Border GST is a receivable, not a cost
The 5% GST your broker pays at the border comes back as an input tax credit, so it belongs in a recoverable account, never in product cost and never in cost of goods sold. We reconcile the broker statement monthly, match each Commercial Accounting Declaration to its shipment, and make sure the credit reaches the HST return for the right period. Border GST buried in cost of goods sold is the most common defect we find in importer books that arrive from elsewhere, and correcting it is found money. The filing mechanics, including how far back a missed claim can reach, sit with our Corporate Tax Filing work.
FX booked at the rate you actually paid
An order priced in January and settled in April rarely settles at January's rate. We run QuickBooks Online in multicurrency: the payable is booked at the invoice-date rate, the difference on settlement lands as a realized exchange gain or loss, and open US-dollar payables are revalued at each period end. Supplier payment runs go through Plooto with approvals attached, and Dext captures the broker and freight paperwork so the audit trail from container to ledger stays intact.
Done this way, the FX line on your statements is a real number you can manage, not noise. It also gives the year-end file a consistent method to stand on, which matters once currency swings start moving reported profit.
Inventory by SKU, so dead stock cannot hide
Distributor books need a perpetual inventory system, not a year-end guess. We work with counts kept in tools like Cin7 or inFlow synced to the ledger, with cycle counts tying the system quantity to what is physically on the racking. The monthly package then shows margin by SKU and line, an aging of stock that has stopped moving, and write-downs to net realizable value taken deliberately, with the evidence documented rather than discovered at year-end.
- Three-way match on every receipt: purchase order, packing slip, supplier invoice.
- Landed-cost allocation per shipment, so freight spikes show up in unit cost, not in a mystery expense line.
- Dead-stock aging reviewed quarterly, so the markdown decision happens on purpose.
One roof for the whole back office
Our End-to-End Accounting service carries the full cycle: monthly books with landed cost done properly, payroll for warehouse and office staff, HST filings that pick up the border GST, and year-end statements with the corporate return. We work with import and distribution businesses across Mississauga and the GTA, and every engagement is quoted in writing after a free 15-minute discovery call, so the fee is known before the first container clears.
