Ecommerce bookkeeping requires more than recording money received in a business bank account. UK online sellers may receive payments through Amazon, Shopify, eBay, Etsy, WooCommerce, PayPal, Stripe and other platforms, while fees, refunds, payment processing charges, VAT, shipping costs and advertising expenses are deducted at different stages.
A reliable bookkeeping system must capture the underlying transactions and reconcile them with the cash actually received.
For example, an online seller may generate £20,000 in customer sales during a month but receive only £17,500 in bank settlements after marketplace fees, payment processing costs and refunds. Recording £17,500 as sales would not explain the transactions behind the settlement and could result in inaccurate turnover and profit figures.
UK ecommerce businesses also need to consider VAT, Corporation Tax or Income Tax, Making Tax Digital requirements where applicable, stock records, payment-platform reports and supporting invoices.
This ecommerce bookkeeping checklist provides a practical framework for UK online sellers. It covers sales, payment processors, marketplace fees, VAT, expenses, stock, bank reconciliation, international transactions, records, tax preparation and monthly management reporting.
Why Ecommerce Bookkeeping Is Different
Traditional bookkeeping can be relatively straightforward when a business raises invoices and receives payments directly into one bank account.
Ecommerce businesses often have several transaction points between the customer and the business bank account.
A typical online order may follow this process:
Customer → Shopify/Amazon/eBay/Etsy → Payment processor → Platform deductions → Settlement → Business bank account.
Each stage can create accounting data.
A £100 customer order could result in:
- £100 gross customer sale
- £10 marketplace or payment fees
- £5 refund
- £85 settlement
The £85 bank receipt is not necessarily the sales figure.
The accounting system needs to explain the relationship between the £100 sale, the £5 refund, the £10 fee and the £85 settlement.
Ecommerce bookkeeping also needs to handle large transaction volumes. A seller processing 2,000 orders per month cannot reasonably rely on manual bank-entry bookkeeping without a significant risk of errors.
Automation, platform reports and regular reconciliation become important.
Ecommerce Bookkeeping Checklist
The following checklist can be used monthly by UK online sellers:
- Record gross sales from every sales channel.
- Record refunds and returns.
- Record discounts and promotional adjustments.
- Reconcile Amazon, Shopify, eBay, Etsy or other marketplace settlements.
- Record payment processing fees.
- Record marketplace commissions.
- Record fulfilment and shipping charges.
- Record advertising costs.
- Record software and app subscriptions.
- Record supplier invoices.
- Reconcile business bank accounts.
- Reconcile PayPal, Stripe and other payment accounts.
- Review VAT treatment.
- Check import VAT and customs documentation.
- Reconcile inventory records.
- Review cost of goods sold.
- Check foreign-currency transactions.
- Separate personal and business expenditure.
- Correct duplicated or missing transactions.
- Save platform reports and supporting documents.
- Review accounts before VAT or tax deadlines.
1. Record Gross Ecommerce Sales
The first bookkeeping task is to record the actual sales generated by the business.
Sales should be captured from the appropriate source rather than relying only on the bank statement.
Sources can include:
- Shopify order reports
- Amazon settlement reports
- eBay transaction reports
- Etsy sales reports
- WooCommerce reports
- Payment processor reports
- Direct invoices
If a store generates £50,000 of customer sales and payment providers deduct £2,000 in processing fees, the business should not normally treat the £48,000 received as the original sales figure.
The underlying £50,000 sales and £2,000 fees need to be accounted for appropriately.
The precise treatment can depend on the accounting method, platform arrangements and tax status, but the bookkeeping system should be capable of reconciling gross activity to net settlements.
This is especially important for VAT-registered businesses because turnover and VAT calculations can be affected by the treatment of customer transactions.
2. Reconcile Every Sales Channel
Online sellers frequently use multiple channels.
A business might sell:
- 60% through Amazon
- 25% through Shopify
- 10% through eBay
- 5% through its own website or another channel
Each platform may have different reporting systems, settlement dates and fees.
Create separate reconciliation processes for each significant channel.
For example:
Amazon
Gross sales → refunds → Amazon fees → advertising → fulfilment → settlement.
Shopify
Gross orders → discounts → refunds → Shopify Payments fees → settlement.
eBay
Gross sales → eBay fees → refunds → settlement.
PayPal
Customer payments → PayPal fees → transfers to bank.
The goal is not necessarily to maintain completely separate accounting systems for every channel. The goal is to ensure that the accounting records can identify and reconcile the transactions generated by each channel.
3. Record Marketplace and Payment Fees
Marketplace fees are business expenses and should be identifiable in the bookkeeping records.
Common fees include:
- Amazon referral fees
- Amazon fulfilment fees
- eBay selling fees
- Etsy transaction fees
- Shopify Payments processing fees
- PayPal fees
- Stripe fees
- Payment gateway fees
- Marketplace subscription fees
- Platform service charges
These should not simply disappear from the accounts because the platform deducted them before making the bank payment.
For example:
Gross sales: £15,000
Marketplace fees: £1,500
Bank settlement: £13,500
The bookkeeping should be able to reconcile the £13,500 bank receipt to the underlying £15,000 sales and £1,500 fees.
For detailed guidance, see the AccountancyNet article on recording Amazon and Shopify marketplace fees.
4. Record Refunds and Returns
Refunds are common in ecommerce and should be tracked separately from ordinary platform fees.
A customer may:
- Cancel an order.
- Return a product.
- Receive a partial refund.
- Receive a full refund.
- Receive compensation for a damaged delivery.
The bookkeeping records should reflect the relevant adjustment.
For example:
Sales: £30,000
Refunds: £2,000
Marketplace fees: £3,000
Net settlement: £25,000
The £2,000 refund should not be treated as a marketplace fee.
Separating refunds helps the business calculate its true sales performance and return rate.
High refund rates can also indicate product quality, sizing, delivery or customer-service issues.
5. Track Discounts and Promotional Codes
Discounts should also be considered during bookkeeping.
An online seller might advertise:
“10% off all orders.”
If a product normally sells for £100 and the customer pays £90, the records need to reflect the transaction correctly.
The business should retain information about:
- Promotional codes
- Automatic discounts
- Customer-specific discounts
- Bundle discounts
- Loyalty discounts
- Marketplace promotions
- Seller-funded promotions
The accounting and VAT treatment of discounts depends on how the promotion operates and what amount the customer actually pays.
Discounts should therefore not be confused with platform fees.
6. Reconcile Payment Processors
Payment processors can create a separate layer of bookkeeping.
Common examples include:
- PayPal
- Stripe
- Shopify Payments
- Square
- SumUp
- Other payment gateways
The payment processor may receive the customer payment, deduct its fee and transfer the balance later.
This means the payment account can function like a temporary holding account.
A simple reconciliation could be:
Customer payments: £10,000
Payment fees: £200
Transfer to bank: £9,800
The accounting system should show why the £9,800 reached the bank.
If a seller records only the £9,800 deposit, the £200 processing fee may be missed.
For businesses using several payment providers, each provider should be reconciled independently before the totals are combined.
7. Reconcile Business Bank Accounts
Bank reconciliation should be performed regularly.
Compare the accounting records with:
- Business current account
- Savings account used for business purposes
- Payment-provider transfers
- Foreign-currency accounts
- Merchant accounts
A bank reconciliation can identify: - Missing transactions
- Duplicate entries
- Unidentified payments
- Incorrect amounts
- Failed payments
- Bank charges
- Refunds
- Transfers between accounts
- Personal transactions
A common ecommerce error is assuming that every deposit from Amazon, Shopify or PayPal represents sales.
The bank statement confirms cash movement. The platform report explains what generated the cash movement.
Both are necessary for accurate bookkeeping.
8. Record Supplier Invoices
Ecommerce businesses need accurate records of purchases from suppliers.
Supplier invoices can include:
- Product purchases
- Packaging
- Labels
- Shipping materials
- Manufacturing
- Import costs
- Warehousing
- Software
- Professional services
Each supplier invoice should be stored and recorded using the appropriate accounting category.
Important invoice information includes: - Supplier name
- Invoice date
- Invoice number
- Description
- Net amount
- VAT amount where applicable
- Gross amount
- Currency
For overseas suppliers, the VAT treatment should be reviewed rather than automatically assuming that UK VAT applies.
9. Track Cost of Goods Sold
Cost of goods sold is one of the most important figures for an ecommerce business.
If a business sells £100,000 of products but spends £65,000 purchasing those products, the £35,000 difference represents gross margin before other operating costs, subject to the correct accounting treatment.
Without accurate inventory and purchasing records, gross profit can be misleading.
Track:
- Product purchase cost
- Freight
- Import-related costs
- Customs duties where applicable
- Packaging where appropriately treated
- Inventory adjustments
- Damaged stock
- Obsolete stock
- Returns
The precise treatment depends on the accounting framework and circumstances.
A business should avoid assuming that every amount paid to a supplier becomes an immediate expense if the underlying goods remain in inventory.
10. Maintain Accurate Inventory Records
Stock is an accounting issue as well as an operational issue.
An ecommerce business should know:
- Opening stock
- Purchases
- Units sold
- Returns
- Damaged units
- Closing stock
- Stock held by fulfilment providers
For Amazon FBA sellers, inventory may be held in Amazon warehouses rather than at the business premises.
Shopify sellers may use third-party logistics companies.
The bookkeeping system should therefore consider stock held across different locations.
Regular stock reconciliation can identify: - Missing stock
- Incorrect quantities
- Damaged inventory
- Unrecorded returns
- Supplier discrepancies
- Fulfilment discrepancies
Inventory accuracy is particularly important when calculating year-end profit.
11. Track Amazon FBA and Fulfilment Costs
Amazon sellers using FBA may incur several costs.
These can include:
- Fulfilment charges
- Storage
- Removal fees
- Disposal fees
- Long-term storage-related costs
- Returns processing
- Other FBA services
These costs should be reviewed against Amazon reports.
A seller should avoid posting one unexplained monthly Amazon deduction to a generic expense account when the platform report provides more detailed information.
Separating major cost categories helps identify whether fulfilment costs are increasing faster than sales.
12. Track Shopify Costs and Apps
Shopify businesses may have recurring costs beyond the basic subscription.
Examples include:
- Shopify subscription
- Payment processing
- Email marketing
- Reviews
- Inventory management
- Shipping apps
- Subscription apps
- Customer service software
- Analytics tools
- Accounting integrations
A business using 15 paid apps may spend a significant amount every month without noticing the cumulative cost.
Review subscriptions regularly.
Remove software that is no longer required.
Record active subscriptions consistently in the bookkeeping system.
Where an overseas software provider supplies services to a UK business, check the VAT treatment using the relevant invoice and circumstances.
13. Record Ecommerce Advertising Costs
Online stores often spend heavily on customer acquisition.
Advertising can include:
- Meta Ads
- Google Ads
- Amazon Ads
- TikTok Ads
- Pinterest Ads
- Influencer campaigns
- Affiliate commissions
- Email marketing platforms
Advertising should be recorded separately from marketplace selling fees where practical.
This allows the business to measure: - Advertising spend
- Sales generated
- Customer acquisition cost
- Return on advertising spend
- Channel profitability
For example, two products may generate identical sales but require very different advertising expenditure.
Separating the costs reveals the difference.
14. Track Shipping and Delivery Costs
Shipping costs should be recorded accurately.
Common expenses include:
- Royal Mail
- Courier charges
- International shipping
- Packaging
- Fulfilment
- Returns shipping
- Delivery insurance
Shipping costs can be particularly significant for bulky products.
Businesses should establish consistent categories so that delivery expenditure can be analysed against sales.
If shipping is charged separately to customers, the seller should also ensure that the corresponding income is recorded appropriately.
15. Check VAT on Every Relevant Transaction
VAT is one of the most important areas for UK ecommerce businesses.
The VAT treatment can depend on:
- Seller location
- Customer location
- Product type
- Customer status
- Goods location
- Marketplace involvement
- Import arrangements
- Value of the consignment
- VAT registration status
Online marketplace VAT rules can also apply in specific circumstances.
HMRC provides official guidance covering VAT when businesses use online marketplaces to sell goods to UK customers. HMRC’s online marketplace VAT guidance explains circumstances in which marketplace operators may have VAT responsibilities.
Sellers should not assume that Amazon, Shopify or another platform automatically handles every VAT obligation.
16. Understand UK Marketplace VAT Rules
UK marketplace VAT rules can be particularly relevant to sellers established outside the UK and businesses holding stock in different countries.
Certain marketplace transactions can result in the marketplace operator being responsible for accounting for VAT.
The precise treatment depends on the transaction.
For UK ecommerce sellers, the bookkeeping process should identify:
- UK domestic sales
- International sales
- Marketplace-facilitated transactions
- Direct website sales
- VAT collected
- VAT paid on eligible purchases
- Import VAT
- Reverse-charge transactions where applicable
A VAT-registered ecommerce business should have a process for reviewing the tax treatment rather than applying one VAT code to all transactions.
17. Check Import VAT and Customs Costs
Businesses importing stock into the UK need to retain relevant customs and import documentation.
Records may include:
- Commercial invoices
- Customs declarations
- Import VAT statements
- Duty information
- Freight invoices
- Shipping documents
- EORI information where relevant
Import VAT can affect VAT returns depending on the accounting method and the business’s circumstances.
Customs duty and import-related costs may also affect the cost of inventory.
Do not automatically post every import-related charge to ordinary business expenses.
The correct treatment can depend on whether the amount relates to VAT, duty, freight or the cost of bringing stock into the business.
18. Review Reverse-Charge Transactions
UK ecommerce businesses may purchase services from overseas suppliers.
Examples can include:
- Software
- Advertising
- Payment services
- Consulting
- Technology
- Digital services
Depending on the circumstances, the reverse charge may apply.
The seller should check the supplier’s invoice and establish the correct VAT treatment.
This is particularly important for businesses using international SaaS platforms.
A bookkeeping system should have the correct VAT codes configured for these transactions.
19. Reconcile International Sales
International ecommerce introduces additional bookkeeping requirements.
A UK seller may receive sales in:
- GBP
- EUR
- USD
- CAD
- AUD
- Other currencies
The accounting records need to reflect the transactions in the business’s functional currency using the appropriate exchange-rate treatment.
Currency differences may arise between: - Order date
- Payment date
- Settlement date
- Bank transfer date
Those differences should be reconciled.
Do not post every currency difference as a marketplace fee.
Foreign exchange movements can represent a separate accounting item.
20. Separate Business and Personal Transactions
A UK online seller should keep business and personal transactions separate wherever possible.
Using the same bank account for:
- Amazon payouts
- Household bills
- Personal shopping
- Supplier payments
- Business subscriptions
creates unnecessary bookkeeping problems.
A dedicated business bank account provides a clearer audit trail.
If a personal transaction does occur through the business account, it should be identified and treated correctly rather than left as an unexplained business expense.
21. Keep Digital Receipts and Invoices
Ecommerce businesses generate large volumes of documentation.
Keep digital copies of:
- Supplier invoices
- Platform invoices
- Payment-provider statements
- Advertising invoices
- Shipping invoices
- Import documentation
- Bank statements
- Refund records
- Credit notes
- Expense receipts
A cloud-based filing system can be structured by:
Year → Month → Supplier/Platform → Document Type.
For example:
2026 → August → Amazon → Settlement Reports.
Consistent naming conventions make records easier to retrieve.
22. Reconcile Marketplace Settlements
Settlement reconciliation should be a core monthly bookkeeping procedure.
For each platform, establish:
Gross sales
+/- Refunds and adjustments
- Marketplace fees
- Payment fees
- Other deductions
= Expected settlement
Then compare the expected settlement with the bank receipt.
If the figures do not agree, investigate the difference.
Possible causes include: - Timing differences
- Refunds
- Chargebacks
- Platform reserves
- Currency conversion
- Fees
- Tax deductions
- Previous-period adjustments
- Failed payments
Do not post an unexplained difference simply to make the reconciliation balance.
23. Review Your Chart of Accounts
The chart of accounts should reflect the way the ecommerce business operates.
Possible sales categories:
- Amazon sales
- Shopify sales
- eBay sales
- Etsy sales
- Direct website sales
Possible expense categories: - Marketplace fees
- Payment processing
- Fulfilment
- Advertising
- Shipping
- Software
- Packaging
- Professional fees
- Storage
The exact structure depends on business size and reporting requirements.
A very small seller may not need dozens of categories.
A growing ecommerce business may benefit from detailed channel reporting.
The objective is to create useful information without making bookkeeping unnecessarily complicated.
24. Review Profit Margins Monthly
Revenue alone does not show whether an ecommerce business is performing well.
Review:
Sales
minus Cost of goods
equals Gross profit
Then consider:
- Marketplace fees
- Payment processing
- Fulfilment
- Advertising
- Shipping
- Software
- Staff costs
- Professional fees
- Other overheads
This provides a clearer view of operating profitability.
A product with £10,000 sales can be less profitable than a product with £7,000 sales if the first product has substantially higher fulfilment, advertising and return costs.
25. Monitor Cash Flow
Profit and cash flow are different.
An ecommerce business can report a profit while having limited cash because money is tied up in:
- Inventory
- Supplier deposits
- Marketplace reserves
- Customer receivables
- Import costs
- Payment delays
Regular bookkeeping helps identify where cash is being used.
Monitor: - Bank balance
- Expected settlements
- Supplier payments
- VAT liabilities
- Tax reserves
- Stock purchases
- Advertising commitments
A monthly cash-flow review can help prevent unexpected funding problems.
26. Prepare for VAT Returns
VAT-registered ecommerce businesses should not wait until the VAT deadline to begin reviewing transactions.
Before a VAT return:
- Reconcile sales platforms.
- Reconcile payment processors.
- Check sales VAT.
- Review purchase VAT.
- Check overseas supplier invoices.
- Review import VAT.
- Check reverse-charge transactions.
- Investigate unusual VAT amounts.
- Reconcile the VAT control account.
- Review the return before submission.
The quality of the VAT return depends on the quality of the underlying bookkeeping.
AccountancyNet provides VAT filing support for businesses that need assistance managing VAT records and submissions.
27. Prepare for Making Tax Digital
Making Tax Digital requirements can affect eligible businesses depending on their income and tax obligations.
Sole traders within MTD for Income Tax requirements need compatible software and digital records.
For an ecommerce seller, this can be more complex because sales may originate from multiple platforms.
The digital bookkeeping system should therefore be capable of:
- Recording income digitally
- Recording relevant expenses
- Categorising transactions
- Maintaining supporting records
- Reconciling platform settlements
- Supporting required submissions
For more information, see AccountancyNet’s Making Tax Digital support.
The specific MTD requirements depend on the taxpayer’s circumstances and the applicable implementation phase.
28. Prepare for Year-End Accounts
Year-end bookkeeping should not involve rebuilding an entire year’s records.
If monthly reconciliations have been completed, the year-end process should focus on reviewing and adjusting the existing records.
Common year-end areas include:
- Bank balances
- Platform balances
- Inventory
- Supplier balances
- Accrued costs
- Prepayments
- Fixed assets
- VAT
- Loans
- Director or owner transactions
- Corporation Tax or Income Tax adjustments
For companies, the accounts preparation process will also require consideration of the company’s accounting records and statutory reporting requirements.
For sole traders, the year-end information feeds into the relevant tax reporting process.
29. Keep Records for the Required Period
UK businesses need to retain accounting and tax records for the required statutory period.
The exact period can depend on the business structure and tax obligation.
Digital records should be stored securely and remain accessible.
Do not rely entirely on a marketplace retaining historical data indefinitely.
Download important reports and invoices regularly.
A business should be able to retrieve records for a previous accounting period without relying on a platform account that could later be closed or changed.
30. Use Accounting Software With Ecommerce Integrations
Accounting software can reduce manual data entry when it connects with ecommerce platforms.
Possible integrations can connect:
- Shopify
- Amazon
- eBay
- Etsy
- WooCommerce
- Stripe
- PayPal
- Bank accounts
The objective is not to automate every accounting decision.
The objective is to reduce repetitive data entry while retaining control over reconciliation and review.
Automated feeds should still be checked.
A connection can import incorrect mappings or duplicate transactions if it is not configured correctly.
31. Avoid Duplicate Transactions
Automation can create a different type of bookkeeping problem: duplicate entries.
For example, an ecommerce integration may import a Shopify transaction while the same transaction is manually entered from the bank feed.
The accounting records then contain the sale twice.
To prevent this:
- Establish one source for sales data.
- Establish one source for settlement data.
- Define how bank transactions will be matched.
- Avoid manually entering transactions already imported.
- Reconcile regularly.
- Review unusual increases in turnover.
Duplicate transactions can distort both sales and profit.
32. Review Accounting Software Mappings
When ecommerce integrations are connected, check how transactions are mapped.
For example:
- Sales → Sales income
- Refunds → Sales returns
- Amazon fees → Marketplace fees
- Payment processing → Payment charges
- Shopify subscription → Software/platform costs
- Shipping → Delivery costs
The mapping should be reviewed after software updates or changes to the business model.
An incorrect mapping can affect VAT reporting and management accounts.
33. Ecommerce Bookkeeping Checklist by Frequency
A practical timetable can make bookkeeping easier.
Daily
- Review unusual orders.
- Check payment failures.
- Monitor refunds.
- Monitor major cash movements.
Weekly
- Review sales.
- Check payment-provider balances.
- Review refunds and chargebacks.
- Review high-value expenses.
Monthly
- Reconcile sales platforms.
- Reconcile bank accounts.
- Reconcile PayPal and Stripe.
- Record platform fees.
- Review VAT.
- Reconcile inventory where appropriate.
- Review advertising costs.
- Review profitability.
- Save platform reports.
Quarterly
- Review tax and VAT position.
- Review business performance.
- Review stock levels.
- Review software subscriptions.
- Review cash flow.
Annually
- Complete year-end accounts.
- Confirm closing inventory.
- Review fixed assets.
- Prepare tax returns.
- Review accounting policies.
- Archive records.
34. Common Ecommerce Bookkeeping Mistakes
Recording bank deposits as sales
This can understate turnover.
Ignoring platform fees
This can overstate profitability.
Failing to reconcile payment providers
Unexplained balances can accumulate.
Mixing personal and business transactions
This makes the accounting records harder to review.
Ignoring inventory
Profit can be inaccurate when stock movements are not properly accounted for.
Applying one VAT code to everything
Different transactions can have different VAT treatments.
Ignoring international transactions
Overseas sales and services can create additional VAT and currency considerations.
Leaving bookkeeping until year-end
Large transaction volumes make reconstruction difficult.
Not downloading platform reports
Historical data may become harder to retrieve.
Treating refunds as expenses
Refunds and operating expenses are different transaction types.
Recording marketplace fees against sales without analysis
This can make turnover and profitability reporting less useful.
Failing to investigate reconciliation differences
An unexplained difference can indicate a missing or duplicated transaction.
35. Example Monthly Ecommerce Bookkeeping
Consider a UK Shopify business with:
Gross customer sales: £40,000
Refunds: £2,000
Payment processing fees: £800
Shopify subscription: £80
Advertising: £5,000
Stock purchases: £15,000
Shipping: £2,000
Bank settlement: £37,200
The bookkeeping process should identify each component.
The £37,200 bank receipt represents the settlement after £40,000 sales less £2,000 refunds and £800 payment fees.
The Shopify subscription, advertising and other costs are separate transactions.
Stock purchases also need to be considered in the context of inventory and cost of goods sold rather than automatically treating all purchases as the period’s cost of sales.
The example demonstrates why bank statements alone do not provide sufficient information for ecommerce bookkeeping.
36. Example Amazon Bookkeeping
Consider an Amazon seller with:
Gross sales: £60,000
Refunds: £3,000
Amazon fees: £8,000
FBA costs: £7,000
Amazon advertising: £4,000
Other deductions: £1,000
Net settlement: £37,000
The accounting records should be structured to reconcile the £37,000 received to the underlying transactions.
The seller should also review the VAT treatment of the relevant sales and fees and retain the Amazon settlement reports.
The seller’s actual profit cannot be determined simply by subtracting Amazon’s bank settlement from supplier payments.
Inventory, cost of goods sold, advertising, fulfilment, refunds, VAT and other operating costs also need to be considered.
37. When Should an Ecommerce Seller Hire a Bookkeeper?
Professional bookkeeping can become valuable when:
- Order volume increases.
- Multiple sales channels are used.
- VAT registration is required.
- International sales begin.
- Inventory becomes significant.
- Marketplace fees become difficult to reconcile.
- Payment providers multiply.
- The business owner spends several hours each week on bookkeeping.
- Monthly management information is required.
- Tax deadlines are approaching.
A bookkeeper can establish a repeatable system so the owner can focus on sales, products, customers and growth.
For businesses needing broader accounting support, AccountancyNet’s accounting services cover accounts preparation, tax returns, VAT, payroll, Self Assessment and MTD compliance.
38. How AccountancyNet Supports UK Ecommerce Businesses
AccountancyNet Ltd is a UK-based accountancy practice serving businesses across England and Wales.
The firm provides accounting and bookkeeping support covering:
- Accounts preparation
- Tax returns
- Payroll services
- Self Assessment
- VAT filing
- Making Tax Digital compliance
Ecommerce businesses can require specialist bookkeeping because their transactions are generated across multiple digital systems.
AccountancyNet supports businesses using platforms such as Amazon, Shopify, eBay and Etsy, helping organise digital transaction data, bank feeds and bookkeeping records.
The service is suitable for online sellers who need their platform settlements reconciled and their accounts maintained throughout the year rather than reconstructed at tax time.
The practice is based in Manchester and serves clients nationally across England and Wales.
Frequently Asked Questions
What is ecommerce bookkeeping?
Ecommerce bookkeeping is the process of recording and reconciling sales, refunds, fees, payment transactions, purchases, inventory, VAT and other financial activity generated by an online business.
Do ecommerce sellers need separate bookkeeping for Amazon and Shopify?
The accounting system does not necessarily need to be completely separate, but transactions from each platform should be identifiable and capable of being reconciled to their respective settlement reports and bank receipts.
Should I record gross sales or the amount received in my bank?
The underlying gross sales should generally be recorded separately from marketplace fees, payment processing charges and other deductions. The exact accounting treatment depends on the transaction and business circumstances.
How often should ecommerce bookkeeping be done?
Monthly bookkeeping is a practical minimum for many online sellers. Businesses with high transaction volumes may benefit from weekly or automated reconciliation.
Do I need to track inventory?
If the business holds stock, inventory records are important for calculating cost of goods sold and year-end stock values.
How should PayPal fees be recorded?
Customer receipts and PayPal fees should be identifiable separately so that the transfer from PayPal to the bank can be reconciled.
How should Amazon fees be recorded?
Amazon fees should be identified from Amazon reports and recorded in appropriate expense categories. The Amazon settlement should then be reconciled to the bank.
How should Shopify fees be recorded?
Shopify subscription, payment processing, app and other relevant charges should be recorded as business costs using appropriate accounting and VAT treatment.
What VAT records should ecommerce sellers keep?
VAT-registered sellers should maintain records supporting their sales VAT, purchase VAT, import VAT and relevant overseas transactions. The exact records required depend on the business and transaction types.
Can ecommerce bookkeeping be automated?
Yes. Accounting integrations and bank feeds can automate parts of the process, but transactions still need to be reviewed and reconciled.
How long should ecommerce records be kept?
The required retention period depends on the business structure and tax obligations. Businesses should follow the relevant HMRC and Companies House requirements applicable to them.
What is the biggest ecommerce bookkeeping mistake?
Recording only net marketplace or payment-provider deposits as sales is one of the most common problems. It can hide fees and refunds and produce inaccurate turnover figures.
Final Ecommerce Bookkeeping Checklist
Before considering the month’s bookkeeping complete, an online seller should be able to answer yes to the following:
- Are all sales channels reconciled?
- Are gross sales recorded?
- Are refunds recorded correctly?
- Are discounts and adjustments identified?
- Are Amazon, Shopify, eBay or Etsy fees recorded?
- Are PayPal, Stripe and other payment fees recorded?
- Are bank accounts reconciled?
- Are payment-provider balances reconciled?
- Are supplier invoices recorded?
- Is inventory monitored?
- Are fulfilment and shipping costs recorded?
- Are advertising costs tracked?
- Are software subscriptions reviewed?
- Has VAT treatment been checked?
- Have overseas transactions been reviewed?
- Have import documents been retained?
- Have foreign-currency differences been reconciled?
- Are business and personal transactions separated?
- Are platform reports saved?
- Are unexplained differences investigated?
- Are the accounts ready for the next VAT or tax deadline?
Final Thoughts
Ecommerce bookkeeping should explain the complete journey from customer order to business bank account.
The bank deposit is only one part of that process.
A reliable bookkeeping system records gross sales, refunds, discounts, marketplace fees, payment-processing costs, advertising, fulfilment, shipping, supplier purchases and other relevant transactions. It also reconciles those records with Amazon, Shopify, eBay, Etsy, PayPal, Stripe and bank statements.
For UK sellers, VAT adds another layer of responsibility. International sales, imported stock, overseas software providers and marketplace-facilitated transactions can require specific tax treatment.
The most effective approach is to reconcile ecommerce platforms regularly rather than waiting until the end of the accounting year.
Accurate bookkeeping gives an online seller more than tax compliance. It provides visibility over sales, gross margin, marketplace costs, advertising performance, inventory, cash flow and overall profitability.
AccountancyNet Ltd provides accounting and bookkeeping services to businesses across England and Wales, including accounts preparation, tax returns, Self Assessment, VAT filing, payroll and Making Tax Digital compliance. For ecommerce businesses, professional bookkeeping can help turn large volumes of platform data into organised accounting records.
For official UK VAT information relating to online marketplace sales, sellers should review HMRC’s online marketplace VAT guidance.