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The reason why eCommerce bookkeeping is unique because online stores often sell on many platforms, like Amazon, Shopify, Etsy, and use different gateways for payments, like PayPal or Stripe. There are lots of small transactions, sales taxes, and shipping fees to track, which makes the bookkeeping more detailed than regular businesses.
As an eCommerce seller, you need to sync your store with good accounting software, track inventory and COGS properly, separate personal and business expenses, stay compliant with sales tax rules across states and continents, and review your financial reports monthly to spot trends and fix issues early.
Traditional bookkeeping is usually simpler, for example, tracking income from one store or service. eCommerce bookkeeping has more moving parts, including online platforms, shipping costs, discounts, returns, and different tax rates depending on where you sell.
For eCommerce bookkeeping, use cloud accounting software that connects your stores, stay organized and updated with books regularly, track every sale, return, and fee, keep digital receipts and records, and work with a bookkeeper who understands e-commerce accounting basics and standards.
Yes. In fact, many online sellers choose to outsource their bookkeeping to experts. It saves time, reduces errors, and lets you focus on growing your business instead of managing spreadsheets.
Yes, bookkeeping is crucial for e-commerce. It allows you to track sales, expenses, returns, and inventory. Keeping detailed records keeps you ready for tax season, helps avoid costly mistakes, and gives you the confidence to grow your business.
Ratio analysis looks at your financial statements, like sales, costs, and assets, to provide insights into cash flow, profitability, efficiency, and debt. It helps you quickly understand your store’s strengths and areas for improvement.
E-commerce bookkeeping often includes recording large volumes of daily transactions, managing payment platform fees, tracking returns, and handling multiple sales tax rates. Keeping up with inventory and reconciling different payment gateways also sets e-commerce apart.
Documents that help you understand your financial health and make better decisions include profit and loss statements, balance sheets, cash flow statements, inventory summaries, sales tax reports, and payment gateway reconciliations.
A current ratio between 1.2 and 2.0 is generally considered safe and healthy. This suggests your business has enough assets to cover short-term debts and keep operations running smoothly.
Monitor key ratios including Gross Profit Margin (to measure profitability), Inventory Turnover (to track how quickly stock sells), Return on Assets (to see how well assets are used), and Debt-to-Equity (to monitor financial stability). These give a clear view of business performance.
