Use a shipment reference from purchase to receipt
Give each shipment a reference shared by the purchase order, supplier invoice, freight record, customs declaration and receiving report. Record partial deliveries and damaged quantities separately. Without that link, a later freight bill can be posted as general overhead even though it relates to a specific shipment still in inventory.
CARM is the CBSA system of record for commercial import accounting. Include the relevant Commercial Accounting Declaration and statement information in the shipment package. A broker’s invoice can contain several components, so do not treat its total as either all duty or all recoverable tax.
Illustrative calculation: the apparent $20 item costs more
Assume a Toronto retailer receives 100 identical units costing $2,000, plus $100 duty, $250 freight and $50 brokerage allocated to the shipment. If those amounts are properly included under the business’s accounting policy, landed cost before any recoverable tax is $2,400, or $24 per unit.
Recoverable import GST, where supported and eligible, is tracked separately rather than automatically added to inventory cost. Non-recoverable taxes and unusual charges need review. This simplified example assumes all units were received and the allocation basis is appropriate; a mixed shipment may need weight, value or another supportable basis.
Reconcile the balance, not just the purchase total
The month-end inventory roll-forward should connect opening quantities, receipts, transfers, sales, returns and count adjustments to closing quantities. Unsold stock and goods in transit require attention to the business’s ownership terms and accounting policy. Paying the supplier does not alone determine whether goods belong in closing inventory.
Compare the resulting stock value with the ledger and investigate differences. Foreign-currency invoices also need their original currency and conversion records so later payment differences are not silently folded into the unit-cost calculation.
Build a package that survives a broker change
CBSA requires importers to retain specified commercial-goods records for six years following importation. Arrange access to your own records rather than relying only on a broker’s current portal login.
- Supplier invoice, proof of payment and currency details.
- Origin, classification and customs accounting documents.
- Freight, duty, brokerage and tax breakdowns.
- Receiving quantities, damage claims and supplier credits.
- The landed-cost allocation and any later adjustment.
Put this into practice
Sources and current guidance
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