How to Reconcile Shopify Shipping Labels, Fulfillment Fees, and Sales Tax Without Losing a Dollar of COGS
Shopify labels bill separately from payouts — split each invoice, book postage to COGS, and remit sales tax collected on shipping.
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Plain-text accounting insights, tutorials, and updates from the Beancount.io team.
How Small Businesses Should Reconcile Shopify Payouts, Fees, and Chargebacks
Shopify payouts are net settlements, not revenue — book gross sales, split every fee, and stage chargebacks; your 1099-K reports the gross to the IRS.
Owner's Draw vs. Salary vs. Distribution: How to Pay Yourself Without Triggering an IRS Reasonable Compensation Audit
Working S corporation owners must take reasonable W-2 wages before distributions — the IRS tests the salary against nine factors, not the 60/40 myth.
When to Outsource Bookkeeping vs. Hire In-House: A Cost Comparison at $50K, $500K, and $5M in Revenue
Outsourced bookkeeping runs $250–$700 a month while a loaded in-house hire costs $69,000-plus a year — see which wins at $50K, $500K, and $5M in revenue.
Like-Kind Exchange Boot Explained: How Cash, Debt Relief, and Non-Like-Kind Property Trigger Tax Under Section 1031
Cash, debt relief, or non-like-kind property in a 1031 exchange is taxable boot up to your gain — and cash offsets mortgage boot, never the reverse.
ISO vs. NSO Tax Treatment for Startup Employees: When Exercising Triggers AMT or Withholding
ISO exercises skip regular tax but can trigger AMT; NSO spreads land on your W-2 — IRS holding periods, withholding gaps, and the $100K limit.
How to Read a Cash Flow Statement: Operating vs Investing vs Financing Activities and Why Net Income Doesn't Equal Cash in the Bank
Operating cash flow, not net income, shows whether your business generates cash — read all three sections in five minutes a month.
How to Read Your Balance Sheet Without an Accounting Degree: Assets, Liabilities, Equity, and the 5-Minute Solvency Check
Assets minus liabilities equals equity — and three ratios (current, quick, debt-to-equity) tell you in five minutes whether your business is solvent.
How to Calculate Cost of Goods Sold the Right Way: Beginning Inventory, Purchases, Ending Inventory, and What It Tells You About Profit
COGS equals beginning inventory plus purchases minus ending inventory — two careful counts decide your gross profit, pricing, and tax.
Gross Profit Margin vs Net Margin: Does Your Pricing Survive Your Overhead?
Gross margin tests your pricing; net margin tests the whole business — the gap between them shows whether pricing or overhead eats your profit.
Freight-In vs. Freight-Out: Why Inbound Shipping Belongs in COGS and Outbound Shipping Is an Operating Expense
Freight-in is part of inventory cost and becomes COGS when goods sell; freight-out is a selling expense. Mixing them distorts gross margin and tax.
Form 945 Explained: How Small Businesses Report Backup Withholding and Nonpayroll Withholding Once a Year
Form 945 reports all backup withholding and nonpayroll withholding once a year — due January 31, with EFT deposits once the year's tax reaches $2,500.