Game studio bookkeeping: payouts, dev costs, and credit-ready records

Book revenue from storefront statements, not deposits

Each storefront is a separate reconciliation. Steam reports a sales month and pays roughly thirty days after it ends, with revenue share, refunds under its two-hour/fourteen-day policy, chargebacks, and the VAT and sales taxes Valve collected all netted out before the USD wire leaves. Console storefronts run their own cycles and their own portals; mobile stores take 30% — or 15% under the small-business tiers below US$1M — before anything reaches you. If the bank feed is your revenue record, every one of those deductions vanishes into a single blurry number.

We post gross platform revenue, the store’s share, and refunds as separate lines from each statement, then clear the deposit against it with FX and wire fees on their own accounts. That is what lets you answer real questions: what did the launch discount actually cost, is the refund rate on one platform out of line, and did every storefront that owes you money actually pay.

Expense or capitalize: pick a dev-cost policy and hold it

Most indie studios should simply expense development costs as incurred — salaries, contractors, tools, and middleware hit the P&L in the month they happen, which keeps the books honest about burn rate. Capitalizing development spend onto the balance sheet as an intangible can make sense when you are courting investors or a publisher who wants to see the asset you have built, but it adds amortization decisions and write-off risk if the project is cancelled. What matters more than the choice is consistency, and one thing is true under either policy: every labour dollar still needs a project tag, because the tax credits do not care where the cost sits in your statements.

Engine costs deserve their own line. If you ship on Unreal, the engine royalty accrues as your game sells once you cross Epic’s lifetime revenue threshold — a cost of revenue that grows with success and should be accrued from the sales statements, not discovered when the invoice arrives. Middleware licences, asset-store purchases, and porting contracts get tagged to the project the same way the people are.

OIDMTC and SR&ED live or die on the labour ledger

Ontario’s interactive digital media credit pays 35–40% on qualifying Ontario labour, with eligible marketing and distribution spend claimable up to $100,000 for a product you developed and sell yourself — and the claim file is built from payroll records, contractor invoices, and time allocation by person, by product. SR&ED wants the same rigour with a different lens: experimental work documented as it happens, arm’s-length contractor payments counted at 80%, and a T661 that ties back to the general ledger without a forensic exercise. We set the books up so payroll maps to people, people map to projects, and projects map to claim schedules — the difference between a claim that sails and one that stalls in review is usually the quality of this trail, not the quality of the science.

Money that arrives before launch

Pre-launch cash has its own timing traps. CRA treats reward-based crowdfunding as business income when received, while the cost of delivering the rewards lands in later periods — a Kickstarter that funds in November can create taxable income in one fiscal year and expenses in the next, which is worth planning for before the campaign closes. Publisher advances work like the milestone loans they resemble: track the recoupment balance so you know when royalty statements will start paying out again. Early Access revenue is simply revenue — Steam pays on the sale, not on version 1.0 — but keeping it tagged separately tells you what the finished launch actually added.

A close that survives diligence

Studios get audited by more than CRA: publishers verify recoupment, credit reviewers sample labour records, and investors ask for a per-project P&L in the first data-room request. A monthly close where storefront statements, payroll allocations, and USD balances all reconcile is what makes those conversations short. The routine behind that close is on our bookkeeping services page, and the W-8BEN-E, treaty-royalty, and US payout side of Steam and console income is covered in our game studio cross-border tax guide.