eCommerce Bookkeeping in 2025: Guide for Online Businesses

eCommerce Bookkeeping in 2025: Guide for Online Businesses

Additionally, integrating inventory management with bookkeeping systems automates COGS calculations. This integration minimizes human error, ensuring your financial records are reliable. As a result, your business can thrive with optimized inventory levels and precise cost tracking, leading to better financial outcomes. Keeping personal and business finances separate is a fundamental practice for e-commerce entrepreneurs. Use dedicated bank accounts and credit cards for business-related expenses to avoid confusion. A smooth integration not only saves time but also provides a single source of financial truth.

Tax management

Your income statement includes all of the money brought in over a given time period, typically a month, quarter, or year. Operating income is any money made through regular business activities; if you own an e-commerce clothing retail business, your primary operating income is from inventory sales. In one column of the balance sheet, you list all of your company’s assets. These include your inventory, cash funds, and accounts receivable or AR (money that clients owe your business and you expect to receive within a Foreign Currency Translation year).

eCommerce Bookkeeping: Everything You Need to Know

These platforms offer various advantages, such as easy setup and improved search visibility, but they do charge a small portion from each sale you make. Monitoring metrics like Gross Margin, Net Profit, and Customer Acquisition Cost can provide valuable insights. These metrics help evaluate overall profitability and cost-effectiveness of your marketing efforts. Another essential metric is Average Order Value, which indicates the revenue you generate per transaction.

Step 2: Choose the Right Accounting Software

The growth of subscription-based accounting services designed especially for internet shops is another trend that is gaining popularity. In addition to standard bookkeeping, these services include financial projections and strategic counsel tailored to your particular business plan. This is derived from the sales of your inventory in an eCommerce retail enterprise. Non-operating income is the money you make from sources unrelated to your business. The profits from investing in stocks or real estate serve as an illustration. Each sales channel charges different fees — some fixed, some variable, some complicated (like referral fees, payment processing fees, or fulfillment fees).

Select a reliable accounting software tailored to the needs of e-commerce businesses. But it’s important to reiterate how essential it is for an ecommerce business. Some platforms offering ecommerce services have built-in inventory management tools. However, if you’re selling from multiple places, tracking changes to the inventory becomes difficult.

It involves monitoring changes in sales tax laws, international tax treaties, and reporting obligations to ensure compliance with tax authorities. Engaging with tax professionals and attending relevant training sessions or webinars can help ecommerce entrepreneurs stay informed about evolving tax regulations and industry best practices. Determining the profitability of products or SKUs involves analyzing various factors, including pricing, advertising costs, staffing expenses, and conversion rates. E-commerce bookkeeping provides business owners with the tools to track these variables effectively.

#6 – Payment processing fees

• In Shopify, you have complete control over fulfillment — you can fulfill the orders yourself or opt for a fulfillment provider.
• With precise records, businesses can plan better for growth and avoid cash crunches.
• Common mistakes include account reconciliation errors and misclassifying transactions.
• Hence, knowing the status of your weekly, monthly, and annual income and expenses with bookkeeping gives you a clear picture of your eCommerce business.
• Keeping track of these fees and reconciling them with your sales data can be challenging.

So, upon processing the order, the business ends up with $8 to send the package to the customer. In this case, there is a discrepancy of $3 between the shipping fee collected from the customer and the actual shipping expenses. Merchant fees help platforms provide hosting, payment processing, and marketing tools, but handling them can be complex. Below, we’ll look at different aspects of ecommerce bookkeeping in more detail, so keep reading. On the other hand, keeping your bookkeeping in-house gives you more control over your financial data and allows for better communication with your bookkeeping team.

• Sign up for our 14-day trial to automate your bookkeeping, unify your e-commerce data, and accelerate your store’s growth by making informed decisions.
• It includes organizing, sorting, and recording the financial transactions of a business.
• The profits from investing in stocks or real estate serve as an illustration.
• Bookkeepers must manage currency conversion, track exchange rates, and account for any gains or losses due to fluctuations in currency value.
• Ad spending, which is another operating activity, on platforms like Facebook, Google, and others, reveals how marketing investments drain your cash position.
• We at Wishup are committed to offering our clients the best bookkeeping services.
• Establishing clear accounting procedures and workflows ensures consistency and accuracy in financial record-keeping.

Inventory management across numerous channels and locations includes tracking stock levels, orders, and returns. In the future, the field of eCommerce bookkeeping is expected to undergo major change. More efficient and streamlined procedures are bookkeeping being made possible by technology.