The E-Commerce Bookkeeping Guide That Actually Matches How Online Sellers Get Paid

If you sell products online, your bookkeeping looks nothing like a traditional retail store's. A brick-and-mortar shop rings up a sale, collects cash or a card payment, and records a straightforward transaction. An e-commerce seller receives a lump-sum payout from Shopify or Amazon two weeks after the sale, minus platform fees, refund deductions, advertising costs, and shipping label charges—all bundled into a single deposit that's nearly impossible to reconcile without a system.

This gap between how e-commerce payments actually work and how most bookkeeping advice is written causes real problems. Sellers misreport revenue, miss deductible fees, and scramble at tax time to figure out what that $3,847.22 deposit from last Tuesday actually represents.

This guide covers the bookkeeping practices that matter specifically for online sellers—not generic small business advice repackaged with an e-commerce label.

Why E-Commerce Bookkeeping Is Different

Traditional bookkeeping assumes a simple flow: you sell something, you get paid, you record the sale. E-commerce breaks this model in several ways.

Lump-Sum Payouts Instead of Individual Transactions

When Shopify pays you, it doesn't send one deposit per order. It sends a combined payout covering dozens or hundreds of orders, minus fees, refunds, and adjustments. Amazon does the same thing on a bi-weekly cycle. If you record that deposit as "revenue," you're overstating your sales and hiding your costs.

The correct approach is to break each payout into its components: gross sales, platform fees, refunds, shipping costs, and any other deductions. This takes more work upfront but gives you accurate numbers to make decisions with.

Multi-Channel Complexity

Many sellers operate across multiple platforms simultaneously—their own Shopify store, Amazon, Etsy, Walmart Marketplace, and possibly wholesale channels. Each platform has its own fee structure, payout schedule, and reporting format. Without a system to consolidate these, you end up with fragmented financial data that doesn't give you a clear picture of overall business health.

Sales Tax Across Jurisdictions

After the 2018 Supreme Court decision in South Dakota v. Wayfair, states can require online sellers to collect sales tax even without a physical presence. As of 2026, nearly all U.S. states with sales tax enforce economic nexus laws. This means an e-commerce seller might need to collect and remit sales tax in dozens of states, each with different rates, product exemptions, and filing frequencies.

Sales tax collected is not revenue—it's a liability. Recording it correctly matters both for accurate financial statements and for avoiding penalties from state tax authorities.

Inventory Valuation

E-commerce businesses that hold inventory need to track cost of goods sold (COGS) accurately. This isn't just about knowing what you paid for products. It includes shipping to your warehouse, customs duties for imported goods, and storage costs if you use fulfillment services like Amazon FBA.

The inventory valuation method you choose—FIFO (first in, first out), LIFO (last in, first out), or weighted average—affects your reported profits and tax liability. Pick one method and apply it consistently.

Setting Up Your Chart of Accounts

A well-structured chart of accounts is the foundation of useful bookkeeping. For e-commerce businesses, the standard chart of accounts needs modification.

Revenue Accounts

Separate your revenue by channel:

• Shopify Sales
• Amazon Sales
• Etsy Sales
• Wholesale Revenue

This separation lets you see which channels are actually profitable after accounting for their respective fees and costs.

Cost of Goods Sold

Break COGS into meaningful categories:

• Product Cost — What you pay suppliers for inventory
• Inbound Shipping — Freight and shipping to get products to your warehouse
• Customs and Duties — For imported goods
• Packaging Materials — Boxes, mailers, tape, inserts

Platform Fees and Selling Expenses

Track fees by platform:

• Shopify Transaction Fees
• Amazon Seller Fees (referral fees, FBA fees, storage fees)
• Etsy Listing and Transaction Fees
• Payment Processing Fees (Stripe, PayPal)

Shipping Expenses

• Outbound Shipping — Cost of shipping orders to customers
• Return Shipping — Cost of processing returns

Operating Expenses

Standard categories apply here: marketing and advertising, software subscriptions, insurance, office supplies, and professional services.

The Monthly Bookkeeping Routine

Consistency matters more than perfection. Here's a practical monthly routine for e-commerce sellers.

Week 1: Reconcile All Payouts

Go through each platform payout from the previous month. Match each deposit to the platform's settlement report. Break down every payout into gross sales, fees, refunds, and net deposit. If the numbers don't match your bank deposits, investigate the discrepancy before moving on.

Week 2: Update Inventory Records

Reconcile your inventory counts with your records. Account for new purchases, units sold, returns received, and any damaged or lost inventory. Calculate your COGS for the month based on actual units sold and their associated costs.

Week 3: Categorize Expenses

Review all business expenses and categorize them correctly. Pay special attention to:

• Advertising spend by platform (Facebook/Meta, Google, Amazon PPC)
• Software subscriptions that may have changed
• Contractor payments for photography, copywriting, or virtual assistants

Week 4: Review and Analyze

Generate your profit and loss statement and review it. Key questions to answer:

• What is your gross margin by channel?
• Are your advertising costs as a percentage of revenue trending up or down?
• Is your return rate within acceptable bounds?
• Do you have enough cash to cover your next inventory order?

Common E-Commerce Bookkeeping Mistakes

Recording Payouts as Revenue

This is the most common mistake and it cascades through everything else. When Amazon deposits $10,000 into your bank account, that's not $10,000 in revenue. It might represent $14,000 in gross sales minus $2,500 in fees, $800 in refunds, and $700 in FBA shipping costs. If you record the deposit as revenue, your books understate both your actual sales and your actual costs.

Ignoring Returns Until They Pile Up

Returns need to be recorded when they happen, not in a batch at the end of the quarter. Each return affects your revenue, your COGS (if the item goes back into inventory), and potentially your shipping costs. Delaying this creates a mess that takes hours to untangle.

Mixing Personal and Business Finances

This seems basic, but it's surprisingly common among e-commerce sellers who started their businesses as side projects. Using one credit card for both personal meals and inventory purchases makes bookkeeping exponentially harder and creates risk during an audit.

Not Tracking Inventory Shrinkage

Products get lost in warehouses. Items arrive damaged from suppliers. Amazon occasionally loses units in their fulfillment centers. If you don't track shrinkage, your inventory records diverge from reality, and your COGS calculations become unreliable.

Overlooking Deductible Expenses

E-commerce sellers frequently miss legitimate deductions:

• Home office deduction if you work from home
• Product photography costs
• Sample products sent to influencers
• Trade show and conference expenses
• Business-use portion of internet and phone bills
• Software subscriptions (design tools, analytics platforms, listing tools)

Automation: What to Automate and What to Review Manually

Automation saves time, but blind automation creates blind spots. Here's where to draw the line.

Automate These

• Bank feed imports — Let your accounting software pull transactions automatically
• Recurring expense categorization — Train your system to recognize and categorize regular expenses
• Sales tax calculation — Use dedicated sales tax software to handle rates and filing
• Platform data syncing — Use connectors to pull settlement data from Shopify, Amazon, and other platforms into your accounting system

Review These Manually

• Unusual transactions — Large or one-off transactions that might be miscategorized
• Refund patterns — Spikes in returns may indicate product quality or listing issues
• Fee changes — Platforms regularly adjust their fee structures
• Inventory discrepancies — Automated counts can drift from reality

The goal is to automate the repetitive data entry while keeping human judgment in the analysis loop.

Sales Tax Compliance for Online Sellers

Sales tax deserves its own section because it's where e-commerce sellers face the most compliance risk.

Understanding Economic Nexus

Each state sets its own thresholds for when you're required to collect sales tax. Common thresholds are $100,000 in sales or 200 transactions within the state during a calendar year, though many states have lowered these. Once you cross a threshold, you must register, collect, and remit sales tax in that state.

Product Taxability

Not everything is taxable everywhere. Clothing is exempt in some states. Digital products have varying treatment. Food items may be taxed differently depending on the state. If you sell across categories, you need to know the rules for each product type in each state where you have nexus.

Filing Frequency

States assign filing frequencies—monthly, quarterly, or annually—based on your sales volume in that state. Missing a filing deadline results in penalties even if you don't owe any tax for that period.

Practical Approach

For most e-commerce sellers doing meaningful volume, dedicated sales tax software is a necessity, not a luxury. These tools integrate with your e-commerce platforms, calculate the correct tax rate at checkout, and can auto-file returns in most states.

When to Get Professional Help

DIY bookkeeping works well for many e-commerce businesses, but there are inflection points where professional help pays for itself:

• Revenue exceeds $500,000 — The complexity of multi-state tax compliance and inventory management typically justifies professional support at this level
• You're expanding internationally — Cross-border sales introduce VAT, customs, and transfer pricing considerations
• You're considering a new entity structure — Transitioning from sole proprietorship to LLC or S corp has tax implications that require professional guidance
• You're seeking investment or a loan — Lenders and investors require professionally prepared financial statements
• You're spending more than 10 hours per month on bookkeeping — Your time likely has a higher-value use in the business

Build Your Financial Foundation

E-commerce bookkeeping isn't complicated because the concepts are hard—it's complicated because the data comes from so many sources in so many formats. The sellers who stay on top of their finances are the ones who build systems early and maintain them consistently rather than doing a frantic catch-up every quarter.

Beancount.io provides plain-text accounting that gives you complete transparency and control over your financial data—every transaction tracked, every fee categorized, and everything version-controlled so you can trace exactly how your numbers changed over time. Get started for free and bring order to your e-commerce finances from day one.