Ecommerce accounting looks simple from the outside. Money arrives, product ships, repeat. The complexity sits underneath the deposit: payout timing, marketplace fees, refunds and chargebacks, inventory valuation, and sales tax obligations in states you have never visited. A capable generalist accountant can miss all five, not through incompetence but because none of them come up in a standard service business.
The result is a set of books that balance perfectly and describe the wrong company. Revenue is understated, margin is unknown at the product level, and a growing sales tax liability is recorded nowhere. Owners usually discover this when they try to raise money, sell the business, or respond to a state notice, and by then the fix is a reconstruction rather than a correction.
Why Ecommerce Books Are Harder Than They Look
A Shopify, Amazon, or marketplace payout is a net figure, and the netting is the problem. Inside a single deposit sit gross sales, platform and referral fees, payment processing fees, shipping income, refunds, chargebacks, promotional discounts, and sales tax you collected on someone else’s behalf and now hold as a liability. Recording that deposit as a single line of revenue understates your actual sales, buries your fees where you cannot manage them, and takes a tax liability off your balance sheet entirely.
Correct treatment means splitting each payout into its components and reconciling the total back to the platform’s settlement report. Done properly, you can see gross revenue, the true cost of each channel, refund rate as a percentage of sales, and the tax you are holding. Done as a single deposit entry, you have a cash record rather than an accounting record, and no basis for deciding which channel deserves more inventory or more ad spend.
Sales Tax and Economic Nexus
Since the Supreme Court’s 2018 decision in South Dakota v. Wayfair, states can require a seller to collect and remit sales tax based purely on economic activity, with no physical presence required. Thresholds vary by state, though many sit at around $100,000 of annual sales into that state, sometimes combined with or replaced by a transaction count. Cross a threshold and the obligation to register, collect, file, and remit begins, whether or not you have noticed.
Marketplace facilitator laws help here, but they also cause confusion. In most states, platforms such as Amazon, Walmart, and Etsy must collect and remit on your behalf for sales made through them, which removes a large part of your exposure. Your own website is different: those sales are yours, and they count toward nexus thresholds. The common failure is an owner who assumes marketplace collection covers everything while direct sales build up an unfiled liability across several states.
Inventory and Cost of Goods Sold
Inventory accounting is where ecommerce margin either becomes visible or stays hidden, and most of the errors are conceptual rather than clerical. These are the treatments that matter most:
- Inventory is an asset when purchased and a cost only when sold, so expensing purchases on receipt misstates both profit and the balance sheet
- Landed cost includes freight, duty, tariffs, and inbound handling, not just the supplier invoice
- Gross margin by SKU is the number that decides what you reorder and what you discontinue
- Damaged, returned, and obsolete stock needs to be written down deliberately rather than left at full value
- Prepayments to overseas suppliers are deposits, not expenses, until the goods arrive
Getting this right changes decisions immediately. A product with a 42 percent gross margin before landed cost can fall below 20 percent once freight and duty are allocated, which reverses the case for discounting it. Owners working from a blended margin across all products often end up subsidizing their weakest lines with their strongest without realizing it.
What to Ask an Ecommerce Accountant
Ask practical questions and listen for practical answers. Which channels do you reconcile, and how do you split a payout into its components? How do you track nexus as we grow, and who tells me when we cross a threshold? How do you value inventory, and does landed cost flow through to SKU-level margin? How do you handle deferred revenue on pre-orders and subscriptions? A firm that has done this work will answer in specifics and will probably mention a settlement report by name.
Indinero works with online sellers on this exact mix of multi-channel revenue, inventory, and multi-state tax, which is a different discipline from general small business accounting even though the software looks the same. Whoever you engage, test them with your own settlement report before you sign. If they cannot explain how last month’s payout breaks down, they are not ready for your books.
Get Ecommerce Accounting That Shows Your Real Margins
Indinero helps online sellers split payouts properly, track sales tax nexus across states, and see true margin by product. Talk to our team about cleaning up your channels and building books you can make decisions from.
