How to Outsource an Accounting Department for Shopify Businesses in Canada

Ever wondered how to go from managing your own bookkeeping for your Shopify business, to having an accounting department do it for you? If you have a rapidly growing Shopify business, This is something you need to implement quickly. Having a dedicated Shopify accounting department to manage the numbers for your Shopify business can help you stay clear of poor financial management and also help you make sound financial decisions during your growth. But of course, this comes with many complexities that are unique to each Shopify business.

A few things that add to these complexities are the volume of transactions, international tax rules, time spent on accounting, navigating proper bookkeeping, and others. You can get away with managing most of these yourself if your business is small or you’re just starting out. However, as your business starts to grow, you may want to compartmentalize these tasks with the help of an accounting department.

An accounting department for your Shopify business can help with the following:

• Figure out the right chain of command for your business
• Handle all tasks associated with bookkeeping, payroll, and taxes
• Choose the right software to serve all your Shopify business accounting needs
• Establish an accounting process that fits you, your business, and other departments
• Recognize revenue, inventory and other intricacies associated with your business
• Have proper controls in place to manage risk
• Cashflow management
• Leveraging technology and automation

Within the above mentioned, tasks or processes and systems need to be implemented in order for your business to run smoothly. While it is possible for one person to tackle all these tasks, processes, and systems, an accounting department will be more efficient and beneficial for this.

In this blog, we will cover all the above points and help you decide whether having an accounting department is right for your Shopify business.

Step 1: Identify Shopify Bookkeeping Components to Outsource

If you need an outsourced accounting department for your Shopify business, it is important to understand the different components included with Shopify bookkeeping.

The main components required to capture all the details for your Shopify bookkeeping include:

• Shopify revenue streams
• Shopify fees and expenses
• Shopify payment, gateways and cash flow timing
• Returns, refunds and chargebacks
• Inventory
• Accounts Payable
• Accounting Software
• Taxes

Once you understand how these items flow within your Shopify business, you can better understand how to structure your shopify accounting apartment. Let break each component down.

Shopify Revenue Streams

Do you sell digital or physical products? Shopify allows you to have multiple income streams. The type of income stream determines how your Shopify store set up and how customers interact with your Shopify store.

The primary source of revenue for most Shopify businesses comes from physical products. Examples of these include the sale of clothes, electronics cosmetics, or home decor. Typically these types of revenue streams require multiple steps in order to fulfil the sale. For example, if you were selling a cosmetic product, once the sale is made by the customer she would receive the money. The item is then packaged in a box, a shipping label is printed and placed on the box, and then the box is sent to a courier to be shipped. While these are very simple steps, the sale of other physical product can require more detailed steps. The nuances of these steps play a role in how to organize your accounting department and decide what they would be responsible for.

And alternative to physical products is digital products. The sale of these items do not require as much so steps as physical products. As a result, accounting for the sale of these is fairly simple. You mostly need to account for the sale of the items in your accounting software.

Other types of revenue streams can include subscription services as well. These are revenues that are recurring. Example of these types of revenues include subscription boxes. Subscriptions can come in the form of digital or physical products. There may be one or more steps involved, depending on the type of product that you have. Accounting for subscription income streams are fairly simple, because we always know what to expect when it comes to sales.

Payment Gateways

Shopify uses payment gateways to collect money from sales. Shopify has its own payment gateway, but it also allows for other third-party payment gateway.

If your Shopify business uses Shopify payment gateway, you can expect all the money collected from yourselves to be in your Shopify store. Shopify provides all the reports you need to understand the money collected from your sales and any fees deducted from them. This makes it fairly easy to reconcile the payouts from yourselves with what you receive in your bank account.

On the other hand, if you’re using third-party payment, gateways things can get a little bit tricky. While Shopify allows you to connect third-party platforms to collect payment. It does not keep the reports of those on your platform. Instead, you’ll have to login to the third parties platforms to get the payout reports. If you have multiple payment platforms, this can get tricky for the accounting department. This is because they will need access to each gateway to retrieve the appropriate reports. Questions surrounding security may come up as a result of this.

Shopify Fees and Expenses

To get the full picture of all your activities within your Shopify store, you cannot neglect Shopify fees, and expenses associated with them. Shopify fees are divided into two main components. These include the Shopify transaction fees, and the Shopify subscription to use the platform.

Shopify transaction fees occur every time a sale is made using the Shopify payment gateway. Shopify typically charges a flat rate plus a percentage every time his cell is made using dear payment gateway. These need to be reconciled with the payouts in order to get an accurate amount of how much fees are being charged versus the amount being deposited into your bank account.

In contrast, the Shopify subscriptions are typically charged directly to your credit card every month. These are typically treated as software or subscription of expenses within your accounting software. Since these typically flow through the credit card, they are usually reconciled when doing the regular monthly bookkeeping.

Refund, Returns, and Chargebacks

Refunds returns and chargebacks typically presented on the Shopify sales report. Extensive detail you want your financial reports to be with determine how to record returns or refunds and chargebacks.

Some business owners, simply net these out from the sales. Others would like to show any refunds returns and chargebacks on a separate line on the income statement. Both are correct however, the latter present a more detailed this depiction of what’s happening within your Shopify business.

Inventory and Cost of Good Sold

Inventory is another component of your Shopify store that should be monitored carefully.

For most of the five businesses inventory as a backbone. Understanding how much inventory you have or don’t have can you turn them in whether you’re using your money effectively or wasting it. As such it is important to have a tool to accurately track your inventory.

Shopify does have a tool that tracks your inventory it can sometimes be inaccurate. Shopify typically tracks the number of inventory at hand, however, may not accurately capture the cost of the inventory. Cost of inventory is important on your financial statement to determine the value of the inventory. It also captures the cost of the inventory once it has been sold. In addition, Shopify store does not accurately capture complex inventory cost modules, such as first in first out, or the average costing method.

This is why it’s important to have a separate system solely dedicated for tracking inventory. For simple inventory counts most accounting software is can handle this. However, for more complex inventory, it is best to have a separate inventory manager to handle inventory. Your accounting department will be able to recommend the best inventory software for you as well as how to handle it within the team.

Accounts Payable

Account payable is another component of Shopify bookkeeping. Accounts payable includes accepting invoices from vendors and being able to pay them on time.

In order to accurately track them, you need an accounting software to help you manage the invoices coming in and the payouts going out. This can be done using an accounting software, such as Dext, QuickBooks, and Plooto. Most businesses have an accounts payable department to handle the volume of invoices coming in and the payouts going out. As your business grows, you can understand how this can be overwhelming for a business owner. Therefore outsourcing Accounts Payable is crucial to the growth and success of your business.

Accounting Software Management

Another thing to think about is the accounting software you use to track the numbers for your Shopify business. There are many accounting software is out there, capable of doing many things. It is important you choose one that best reflects how your business operates.

The right bookkeeping software will help you manage accounts, payable accounts, receivable, expenses, sales, bank, reconciliations, money coming in and out of your bank accounts, sales taxes, and financial reporting.

Shopify is a gold standard for many Shopify businesses because it is capable of handling all the accounting needs for more Shopify businesses. More importantly, it has automation capabilities that allows the bookkeeping to be fairly easy.

It is important to note that while QuickBooks is user-friendly, it is best managed by bookkeeping or accounting professionals. This is because QuickBooks only serves as a tool for bookkeeping, and does not encompass all the rules associated with bookkeeping. Therefore, if you’re doing your bookkeeping alone, it is important you understand the rules and regulations that come with it for audit purposes. This is why it may be important to outsource your bookkeeping to professionals who know what they’re doing.

Taxes

Taxes encompass sales taxes collected from your Shopify sales that need to be remitted to government agencies like the CRA. It also includes eligible tax refunds from purchases. As well as corporate taxes that need to be paid or recouped from profits or losses from the business.

Both a bookkeeper and an accountant can help navigate the organization and filing of tax related things.

Step 2: Define Your Accounting Department Structure

Once you understand the components for which you need to outsource to an accounting department, you’ll need to think about the structure for your accounting department. There are many ways to go about this, but I will just list a few.

Full Stack Accounting Department

A full stack accounting apartment is one that has all the bells and whistles of an accounting department. This is ideal for businesses who have a gross revenue threshold of $1 million or more per year.

A full stack accounting department is composed of a CFO (who is generally an accountant), accounts payable clerks, accounts receivable clerks, staff accountants, and bookkeepers. Each member has their assigned role to help organize your finances. Ultimately, all the information is summarized by means of financial reports which are reviewed by the CFO with the business owner.

The team can operate remotely or on site depending on preference. Generally, the owner hires the CFO, then the CFO hires the appropriate team for the business. The business needs will determine who is appropriate to work with the business.

This type of accounting department is probably the most expensive and can rage from $10,000 to $20,000 per month. For that price, you are getting a dedicated accounting team that is very meticulous about your finances.

CFO and Bookkeeper Accounting Department

This type of department is similar to the full stack department except you typically only get 2 personnel working on your finances. One is a CFO and the other is a bookkeeper. You will typically hire a CFO, who will then hire a bookkeeper to help with your finances.

The CFO oversees the bookkeeping done by the bookkeeper. The bookkeeper will be responsible for all the day to day financial activities for the business. With this setup, you will generally communicate with the bookkeeper more often than the CFO. The CFO will be needed for more complex financial situations such as tax minimizations, corporate tax filing, asset depreciations, and other high level items. The goal with the CFO it to help your business stay afloat and grow.

This type of setup will cost about $5000 to $10,000 per month depending on the complexity and volume of your business. You will still get the same meticulous accounting organization as the full stack accounting department. The only difference is that it your team is limited to 2 experts.

Separate Bookkeeper and Accountant

You can also have an accounting department where the bookkeeper and accountants are hired separately. For example, you may hire a bookkeeper to work closely with you. You may also hire an accountant separately for other tasks. With this arrangement, the bookkeeper and accountant work in their own companies but can come together to work on your business.

This arrangement is ideal for Shopify businesses that are just starting out, stable and slowly growing. In this case, the bookkeeper can handle the majority of the day to day financial organization. At the end of the year, the accountant will step in to take care of the taxes and other high level items.

With this arrangement, you have to pay for a bookkeeper and an accountant separately. The bookkeeper will charge a monthly fee for their day to day assistance. And the accountant will typically charge a 1 time fee for help with filing corporate taxes and other high level items.

While this type of department is less expensive than the other 2 mentioned, the drawback is coordinately your finances with 2 separate professionals. Another drawback is the quality of the bookkeeper you hire. Since bookkeepers are not regulated and do not need supervision, it may be a challenge to find one that knows what they are doing. This is in contrast to hiring a CFO who is a certified accountant, who then hires a bookkeeper to work for them under their supervision.

For more information on whether you need a bookkeeper for your Shopify business, check out this blog:

Do I Need A Bookkeeper for my Shopify Business? 10 Signs

Step 3: Choose an Accounting Software for your Accounting Department

When deciding which accounting software to use, you have to think of your needs as a Shopify business. A good accounting software is one that makes your life as well as your bookkeeper/accountant’s life easier.

To pick the right one, first list what your business needs. Once you pick them, rank them according to which will provide the most value to you. Don’t just pick the most popular software. Actually do research on which on makes sense for your business. Here are a list of the top 3 accounting software that easily integrate with your shopify store.

Intuit Quickbooks Online

Probably the most popular of the bunch. Intuit Quickbooks Online is widely used by small and medium sized businesses. It can automatically import Shopify transactions, track expenses, reconcile bank accounts and generate financial reports. Because of its popularity, find an accountant who already knows how to use it is easy.

Quickbooks is best for Shopify businesses looking for a comprehensive accounting solution with strong reporting and accountant support.

Xero

Xero is a clould-based software however it has less automation and features than Quickbooks. You may be able to integrate Shopify to Xero but it may come with some struggle. Xero offers a wide range of plans for your needs as well as accountant/bookkeeper support.

For those looking for a simple software wthout the bell and whistles, Xero will be a great fit.

Sage Accounting

Sage Accounting provides essential bookkeeping features, including invoicing, expense tracking, bank reconciliation, and cash flow management. While its Shopify integration may require a third-party connector, it remains a reliable option for businesses that prefer a straightforward accounting system without unnecessary complexity.

Sage is best for businesses looking for an affordable accounting solution with essential features.

Careful consideration should go into the right accounting software to choose. Picking the wrong one can be costly for your business finances and your wallet.

Step 4: Be Clear on Your Responsibilities

The whole point of outsourcing your accounting is to focus on growing your business. Or perhaps it’s because you don’t know what you’re doing when it comes to accounting. While you may think stepping away means never dealing with it again, this is not entirely true. Yes you will not have to do as much accounting as you used to but you will still have some responsibilities. It is important to discuss the responsibilities you versus your accounting department will have when you outsource.

Here is a list of items of items you may want to outsource to your accounting department as a Shopify business owner:

• Receipt management
• Invoicing
• Tax reporting
• Categorizing transactions in the accounting software
• Preparing financial statements
• Year end reporting
• Inventory management
• Run payroll
• Accounting email management

Here are a list of items you may want to keep doing even after you outsource your accounting department:

• Provide source documents such as receipts and invoices to client
• Update accounting software bank feed
• Make supplier payments
• Provide and manage access to accounting related software

It is important to discuss each party’s responsibilities before starting that account so that there is no overlap or misundetstanding.

Step 5: Choose The Right Bookkeeper or Accountant

Once you’ve figured out the above 4 steps, it’s now time to choose the right bookkeeper or accountant. Do you fancy an remote department or an inhouse one? The one you will depend on what you want to accomplish.

For example, if your business operates in your home and you have no space for a team to physically come in to help, then a remote bookkeeping or accounting team may be the right option. If you have sensitive information that cannot be shared remotely, then an inhouse team may be the best option.

Remote Accounting Department

If you choose a remote accounting department in 2026 and beyond, you have to implement software to transfer information electronically. This doesn’t mean just having an accounting software. It also means using email, payroll software, inventory software and receipt management software to organize your documents.

Although these tools come with an upfront cost, they can save significant time, improve accuracy, and make collaboration much easier over the long term. They also allow you and your accounting team to access up-to-date financial information from anywhere, reducing delays and making it easier to monitor the financial health of your business.

A remote accounting department can also be a cost-effective option since you don’t have to provide office space, equipment, or employee benefits. Many businesses find that outsourcing remotely gives them access to a wider range of expertise while allowing them to scale services up or down as their needs change.

In-House Accounting Department

An in-house accounting department can be the right choice for businesses that require daily financial oversight or prefer having their accounting staff available on-site. Having an accountant or bookkeeper in the office allows for immediate communication and can be beneficial if your business processes a high volume of transactions or requires close coordination with other departments.

However, hiring an in-house team typically comes with higher costs, including salaries, benefits, training, office space, and equipment. Before making this investment, consider whether your business has enough ongoing accounting work to justify a full-time employee or team.

Whichever option you choose, look for professionals with relevant experience in your industry, strong references, and a clear understanding of your business goals. The right accounting partner should not only keep your books accurate but also provide insights that help you make better financial decisions as your business grows.

Conclusion to Outsourcing Accounting Department for Your Shopify Business

If your Shopify business is growing and you need to outsource an accounting department, have a clear plan on what you wish to accomplish. Remember the five steps: identify what you wish to outsource, define your department structure, choose the right software, be clear on your responsibilities, and choose the right bookkeeper or accountant.

At Paperless Books, we offer fully managed remote bookkeeping services for your Shopify business. Book a call to discuss more.