Question 1

What is dual-currency bookkeeping and why does it matter?

Accepted Answer

Dual-currency bookkeeping means maintaining your financial records in two currencies — typically CAD and USD — with all transactions recorded at the correct exchange rate on the transaction date. When the exchange rate fluctuates, transactions recorded at different rates create foreign exchange (FX) gains and losses. These must be tracked and reported correctly: unrealized FX gains/losses are reported on the balance sheet, while realized gains/losses flow through the income statement when a foreign currency account is settled. Getting this wrong can materially misstate your profit and your tax liability in both countries.

Question 2

How do you handle foreign exchange gain and loss entries?

Accepted Answer

We record each USD transaction at the Bank of Canada spot rate (or the actual transaction rate) on the date it occurs. At month-end, we revalue your USD bank accounts and receivables at the current exchange rate. The difference between the book value and the revalued amount is posted as an unrealized FX gain or loss — appearing on your income statement as a non-cash item. When USD cash is actually converted to CAD, the realized gain or loss is calculated and posted. All FX entries are traceable to the underlying transactions and defensible in a CRA or IRS audit.

Question 3

Do Canadian businesses selling in the US need to register for US sales tax?

Accepted Answer

Yes — if you have economic nexus in a US state. Economic nexus is triggered when your US state sales exceed $100,000 USD or 200 transactions per state in a calendar year. Once nexus is established, you must register, collect, and remit state sales tax in that state. This applies to Canadian companies selling physical goods, digital products, and certain services into the US. We track your revenue by state, flag nexus thresholds as you approach them, and coordinate with your CPA to file where required. Failing to register is one of the most common and costly compliance mistakes Canadian e-commerce businesses make.

Question 4

What is a W-8BEN and W-9, and do I need to collect them from contractors?

Accepted Answer

A W-9 is a US tax form collected from US-based contractors and vendors — it provides their Taxpayer Identification Number (TIN) so you can issue a 1099-NEC at year-end for payments of $600 or more. A W-8BEN (for individuals) or W-8BEN-E (for entities) is collected from non-US contractors and vendors — it certifies their non-US status and may reduce US withholding tax requirements. If you pay both US and non-US contractors, we maintain your vendor W-9 and W-8BEN files throughout the year and prepare 1099-NEC forms for all qualifying US contractor payments before the January 31 deadline.

Question 5

What is T1135 and does it apply to my business?

Accepted Answer

The T1135 Foreign Income Verification Statement is a CRA form that must be filed annually by Canadian residents (individuals and corporations) who hold foreign property with an aggregate adjusted cost base exceeding $100,000 CAD at any point during the tax year. Foreign property includes foreign bank accounts, US stocks, US real estate held for investment, shares of foreign corporations, and receivables from non-residents. The penalties for failing to file T1135 start at $25/day up to $2,500, and can escalate significantly for gross negligence. We track your foreign asset holdings throughout the year and ensure T1135 is filed with your annual tax return.

Question 6

What is permanent establishment risk for Canadian companies doing business in the US?

Accepted Answer

Permanent establishment (PE) is a tax concept that determines whether a Canadian company has sufficient presence in the US to be subject to US corporate income tax on business profits. PE is typically triggered by: maintaining a fixed place of business in the US (office, warehouse), having a dependent agent in the US who habitually exercises authority to conclude contracts, or exceeding certain activity thresholds. If PE is established, the company becomes subject to US federal and state income tax on the profits attributable to the US presence. We help you understand the activities that create PE risk and structure your bookkeeping to document the nature and extent of your US operations — giving your cross-border CPA the information needed to assess your exposure.

Question 7

How do you handle transfer pricing for transactions between related Canadian and US entities?

Accepted Answer

Transfer pricing governs the prices charged for transactions between related parties in different countries — for example, a Canadian parent company billing its US subsidiary for management services. Both the CRA and IRS require that these prices reflect what independent parties would charge at arm's length. If related-party transactions are not priced at arm's length, both tax authorities can reassess and reallocate income. We ensure related-party transactions are documented at arm's length prices and maintain the contemporaneous documentation that supports your transfer pricing positions. For more complex intercompany arrangements, we coordinate with transfer pricing specialists.

Cross-border bookkeeping
Canada & USA.

Bookkeeping for businesses that operate across the Canada–US border

Canadian companies selling into the US

US businesses with Canadian operations

Businesses incorporated in both countries

Most bookkeepers know one tax system. We know both.

Dual-Currency Bookkeeping (CAD/USD)

Foreign Exchange Gain/Loss Entries

Transfer Pricing Documentation

T1135 Foreign Asset Reporting

W-8BEN / W-9 Vendor Compliance

Permanent Establishment Risk

Cross-border sales tax: the most overlooked compliance obligation

Canadian Companies Selling into the US

US Companies Selling into Canada

Cross-border bookkeeping questions

One firm. Both sides of the border.

Cross-border bookkeepingCanada & USA.