E-Commerce and Online Sales

Turn Complex Transaction Data Into Reliable Financial Information

E-commerce businesses can generate thousands of transactions while still struggling to determine what they actually earned.

Sales recorded by Shopify, Amazon, Walmart, and other marketplaces rarely equal the deposits appearing in the bank. Marketplace fees, payment-processing charges, advertising, fulfillment costs, shipping, returns, refunds, chargebacks, sales taxes, and inventory adjustments can all occur before cash reaches the business.

Accounting must reconstruct that activity accurately.

Accounting Setup

A reliable e-commerce accounting structure connects sales channels, payment processors, inventory systems, fulfillment activity, and the general ledger.

The chart of accounts should separately identify product revenue, discounts, returns, marketplace fees, merchant-processing costs, shipping, fulfillment expenses, advertising, inventory, and cost of goods sold.

Processes should also establish how settlement reports are obtained, how inventory information reaches the accounting system, and how sales activity is reconciled to cash deposits.

Ongoing Accounting Processes

Marketplace settlements should be reconciled rather than simply recording net bank deposits as revenue.

Sales, fees, refunds, chargebacks, taxes, and other deductions need to be identified and recorded consistently. Inventory purchases and adjustments should be coordinated with inventory systems such as Fishbowl and other fulfillment or warehouse platforms.

Bank, credit-card, payment-processor, and marketplace balances should be reconciled regularly so discrepancies do not accumulate.

Management & Financial Reporting

Management reporting can include:

• Sales by channel

• Gross margin and cost of goods sold

• Marketplace and processing fees

• Inventory balances and adjustments

• Returns and refunds

• Fulfillment and shipping expenses

• Channel and product profitability

• Cash-flow and working-capital reporting

Business Value

Revenue growth does not necessarily mean profit growth.

Proper e-commerce accounting allows management to understand the economics behind the sales number—what products, channels, and marketplaces are actually producing acceptable margins.

It also provides better visibility into inventory investment, fulfillment costs, marketplace fees, and working capital, helping leadership decide where to invest, what to change, and which channels truly deserve continued growth.