Bike shop bookkeeping: two seasons, dating terms, and a service bench of its own

Two seasons, one set of books

Spring through early summer sells bikes; late fall through winter sells skis, boards, and skates, and the shoulder months in between sell very little of anything while rent and staff still run full price. Comparing March to April tells you nothing useful here — what matters is this March against last March, and a cash flow view built around two lean stretches rather than twelve steady ones. We set up class tracking in QuickBooks Online by department — bikes, winter sports, apparel and accessories, service — so a slow shoulder month in one department does not get read as a bad month for the store when another department is quietly on plan.

Dating terms turn a big fall order into a spring cash plan

Most bike and outdoor brands sell on dating programs: you commit to next season’s order at a fall or winter buying show, the product ships ahead of the season, and the invoice is not due until spring, when the bikes are actually moving off the floor. That is not a standard 30-day payable, and booking it as one is a mistake — it needs its own aging category so a $40,000 invoice due in April does not show up as overdue in February, and so the real due date is never missed once the cash finally arrives from spring sales. Many of these invoices land in USD, since several major brands bill out of the US, so the amount booked in the fall and the amount actually paid in the spring can differ with the exchange rate — a small FX gain or loss that belongs on its own line, not buried in cost of goods. Our guide on how to record USD transactions in Canadian books covers the mechanics.

The service bench is a second business under one roof

Repair labour is fully taxable and usually carries a far better margin than the bikes themselves, which is exactly why it needs to be tracked apart from product sales rather than folded into general revenue. Work orders still open at month-end are unbilled labour and parts sitting in progress — they should stay visible on the books, not disappear until someone remembers to invoice them. Warranty work that a distributor reimburses for an e-bike or component failure is its own revenue stream, paid by the manufacturer rather than the customer, and it often shows up as a receivable that sits for a few weeks before the cheque or credit note arrives — worth its own account so it is not mistaken for a slow-paying customer.

Trade-ins and used bikes need their own trail

When a customer trades a used bike toward a new one, the Excise Tax Act lets a GST/HST registrant charge tax on the price after subtracting the trade-in credit, so long as the credit is reasonable and shown on the invoice — tax on the net, not the full retail price. That only works cleanly if the trade-in is booked at a documented fair value the day it comes in, then moved into its own used-inventory bucket until it is cleaned up and resold at a real market price, not whatever the trade-in credit implied. Seasonal gear bought in bulk secondhand or taken on consignment for the return season follows the same rule: its own bucket, its own pricing, never blended with new stock.

Year-end count meets the model-year problem

Bikes and winter gear are model-year inventory — a current bike becomes last year’s model the moment the next line ships, whether or not it has sold, and sizes and colours within the same model rarely sell evenly. A physical count at year-end has to price down what is left to what it will genuinely fetch, not what it cost, and that markdown needs a schedule behind it rather than a round-number guess if the CRA ever asks. Rental and demo units are a different class again — capital assets on their own schedule rather than inventory — and a rental bike pulled out of the fleet to sell used has to move categories cleanly, not vanish from one column and reappear in another with no trail. Owners buying from US or Asian distributors will find the currency and tariff side of this on our bike shop cross-border tax page; the monthly close behind all of it is what our bookkeeping services deliver.