Book a call
Guide · Ecommerce

Bookkeeping for ecommerce – inventory, platforms, and sales tax.

Ecommerce bookkeeping has three layers of complexity that generic bookkeeping doesn't handle: multi-platform sales reconciliation (Shopify + Amazon + TikTok Shop + wholesale), inventory accounting, and multi-state sales tax compliance. This guide covers what ecommerce bookkeeping requires.

Platform reconciliation

Multi-platform sales reconciliation

Ecommerce businesses typically sell through multiple channels simultaneously: their own Shopify store, Amazon, eBay, Walmart Marketplace, TikTok Shop, wholesale channels. Each platform has its own revenue recognition quirks and payout cadence.

Shopify

  • Customer pays Shopify Payments (or another processor)
  • Shopify deducts processing fee (2.4%–2.9% depending on plan)
  • Payout to bank on 2–5 day cycle
  • Accounting reconciles: gross sales (from Shopify) minus fees = bank deposit

Amazon (FBA or FBM)

  • Customer pays Amazon directly
  • Amazon deducts referral fees (8–15% depending on category), FBA fees (if fulfilled by Amazon), advertising costs, promotional rebates, returns
  • Biweekly settlement payout to seller bank account
  • Accounting reconciles: each settlement report contains dozens of line items that must all code correctly

Amazon is the most complex reconciliation in ecommerce. Settlement reports for even small sellers can have 50+ line items. Categories include: product sales, shipping income, gift wrap, FBA fees, storage fees, long-term storage fees, refunds, reimbursements, advertising spend, coupon costs. Getting each category to the right GL account is a specialty.

Wholesale channels

Ecommerce brands selling to retailers (Whole Foods, Target, specialty stores) add wholesale revenue alongside direct-to-consumer. Wholesale has different payment terms (net 30–60–90), different margins, different returns and allowances. Multi-channel brands track DTC and wholesale separately.

Platform specialty tools: A2X (for Amazon and Shopify), Link My Books (UK-focused), Webgility (multi-platform) automate much of the platform-to-accounting reconciliation. These tools don't replace bookkeepers but make bookkeeper time much more productive. Ecommerce-trained bookkeepers typically run A2X or equivalent as standard.
Inventory

Inventory accounting for ecommerce

Ecommerce inventory accounting is where many businesses fail. The basic requirement: track inventory cost, apply COGS correctly when items sell, maintain accurate balance sheet inventory value.

Costing methods

  • FIFO (First In First Out). Most common. Oldest inventory costs flow to COGS first.
  • Weighted average. Average cost of all inventory applied to each sale.
  • LIFO. Less common in ecommerce; tax implications worth discussing with CPA.

What goes into inventory cost

  • Product cost from supplier
  • Freight to bring inventory to warehouse
  • Import duties and customs fees
  • Quality inspection costs
  • For Amazon FBA: inbound shipping to Amazon warehouses

Freight, duties, and inbound costs should capitalize to inventory value, not expense immediately. Getting this wrong understates COGS and overstates gross profit.

Inventory tracking systems

  • ShipStation, ShipBob. Fulfillment platforms with basic inventory tracking
  • Cin7, Zoho Inventory, Unleashed. Dedicated inventory management systems
  • QBO/Xero with Inventory. Works for small ecommerce under 50 SKUs
  • NetSuite, Sage Intacct, Brightpearl. Mid-market ecommerce brands

Physical counts

Quarterly or semi-annual physical inventory counts essential. Book inventory and physical inventory always diverge over time due to shrinkage, damage, miscounting at receipt. Without physical counts, book inventory eventually becomes fiction.

Sales tax

Multi-state sales tax compliance

The Wayfair decision (2018) changed ecommerce sales tax fundamentally. Now, ecommerce businesses must register, collect, and remit sales tax in any state where they exceed economic nexus thresholds – typically $100k revenue or 200 transactions annually.

What this means operationally

  • Ecommerce brands growing above $1M annual revenue typically have sales tax obligations in 15–40+ states
  • Each state has different rates, filing frequencies, rules about product taxability
  • Marketplace facilitator laws: Amazon, eBay, Walmart Marketplace collect sales tax on your behalf in most states
  • Direct channels (Shopify store) require the seller to collect and remit

Tax calculation platforms

  • Avalara AvaTax. Enterprise-scale, integrates with most ecommerce platforms
  • TaxJar. Mid-market focus, good Shopify and Amazon integration
  • Shopify Tax. Native Shopify option, strong for Shopify-only sellers
  • Sovos. Larger enterprise use

What bookkeeping handles

  • Monthly sales tax calculation and filing by state
  • Nexus monitoring: tracking when new states trigger nexus thresholds
  • Product taxability review when adding new SKUs
  • Exemption certificate management for B2B / wholesale customers
  • Audit response if state issues sales tax audit
International expansion: selling internationally adds VAT, GST, and other consumption taxes. UK VAT, EU VAT (per-country registration), Canadian GST/HST, Australian GST. Each has its own rules and thresholds. Ecommerce brands going international typically need international tax advisor beyond bookkeeping scope.
Monthly reporting

Monthly reporting ecommerce operators use

  • Revenue by channel. Shopify vs Amazon vs wholesale, revenue and gross margin by channel.
  • Platform P&L. For Amazon: settlement-level detail showing product sales, fees, ads, refunds.
  • Product-level margin. Top SKUs by revenue, gross margin by SKU, identifying low-margin SKUs.
  • Inventory position. Total inventory value, turnover rate, weeks of supply, aging of slow-moving SKUs.
  • Marketing ROI. Ad spend by channel, CAC by channel, return on ad spend (ROAS).
  • Sales tax filed by state. Monthly or quarterly filings completed, nexus status.
  • Cash flow projection. Ecommerce cash is lumpy because of inventory purchases; 13-week projection reveals inventory crunches.
  • Cohort analysis. Customer LTV by acquisition cohort, repeat purchase rate, retention.

Related: ecommerce industry page, offshore bookkeeping, QuickBooks Online.

Related

Related pages

Industry

Ecommerce

Our ecommerce service scope and engagement model.

Service

Offshore Bookkeeping

Baseline bookkeeping scope for ecommerce.

Platform

QuickBooks Online

Common platform for small ecommerce brands.

Industry-trained offshore bookkeeper, 3-week onboarding.

Book my call →