Sell a product on your Shopify store. Shopify collects the payment, deducts its processing fee, and deposits the net amount. One transaction. Easy.
Now sell that same product on Amazon, Walmart Marketplace, your Shopify store, and a wholesale channel. Amazon deposits a settlement every two weeks with 47 line items covering sales, returns, FBA fees, storage fees, advertising offsets, and reimbursements. Walmart has its own settlement schedule and fee structure. Shopify has daily payouts minus processing fees. Your wholesale orders go through a different invoicing process entirely.
That one product now generates four different data streams, four different fee structures, four different deposit timings, and four different sets of adjustments that need to reconcile back to your inventory records and your bank account. Multiply by 500 SKUs and 2,000 orders a month.
This is why CPA firms serving ecommerce clients need bookkeeping teams that understand multichannel commerce at a structural level. A bookkeeper who records Amazon deposits as "Sales" and calls it done is producing financial statements that are materially wrong. Revenue is overstated (because the deposit is net of fees). Returns are invisible. COGS has no channel-level detail. And sales tax liability is a complete mystery.
We handle ecommerce bookkeeping for CPA firms across the US. Here is what the work actually requires and how we do it.
Every marketplace has its own settlement report format. Each one is a puzzle. And each one must be parsed correctly, or the books are wrong from the first entry.
Amazon's settlement report is the most complex of the major marketplaces. A single settlement period (typically every 14 days) includes:
The deposit that hits the bank account is the net of all of these components. A bookkeeper who records a $42,000 Amazon deposit as $42,000 in revenue has missed selling fees, FBA fees, refunds, and potentially thousands of dollars in other adjustments. The real gross revenue might be $55,000, with $13,000 in fees and adjustments.
Shopify's settlement structure is simpler but still requires proper parsing:
Walmart's settlement reports include:
For each marketplace, the bookkeeper must:
We have built standardized parsing templates for Amazon, Shopify, and Walmart. We use tools like A2X, Link My Books, or Webgility when the CPA firm's client already has them in place. When they do not, we can work directly from the raw settlement reports. Either way, the output is the same: a clean set of journal entries that properly separate gross revenue, fees, returns, and other adjustments by channel.
For CPA firms looking for an ecommerce accounting partner, this level of detail is non-negotiable. Without it, the financial statements are meaningless for decision-making.
Total COGS is not enough for an ecommerce business. The owner and the CPA firm need to know COGS by channel, because the margin structure is different for each one.
Consider a product that costs $12 to manufacture and sells for $30 across all channels:
Same product. Four very different margin profiles. Without channel-level COGS and margin reporting, the ecommerce brand cannot make informed decisions about where to invest in growth, which channels to scale back, and where their advertising spend generates the best return.
We track COGS by channel for our ecommerce clients. The methodology depends on the business:
The CPA firm defines the margin analysis framework. We produce the data.
Ecommerce businesses that carry physical inventory need a consistent, defensible inventory valuation method. The two most common approaches are:
FIFO assumes the oldest inventory is sold first. When product costs change over time (due to vendor price increases, currency fluctuations, or changes in shipping costs), FIFO results in COGS that reflects the older, typically lower cost, and ending inventory valued at the more recent, typically higher cost.
FIFO is the most common method for ecommerce businesses because it aligns with how most physical goods actually move (you ship the older inventory first). It is also required under IFRS if the business has international reporting requirements.
Weighted average cost blends all purchase costs and calculates a single average cost per unit. Every unit in inventory has the same cost at any given time. When new inventory is purchased at a different cost, the average is recalculated.
Weighted average is simpler to maintain, especially for businesses with frequent purchases at varying costs. It smooths out cost fluctuations but can obscure trends in input costs.
The bookkeeper needs to:
For FBA sellers, inventory management has an additional wrinkle. Amazon provides inventory reports showing units received, units sold, units returned, units removed, units damaged (by Amazon), and units lost (by Amazon). These reports must be reconciled to the seller's own inventory records. Discrepancies trigger reimbursement claims.
We maintain perpetual inventory records for our ecommerce clients (or reconcile to their inventory management system, such as Cin7, Skubana/Extensiv, or TradeGecko/QuickBooks Commerce). Monthly inventory reconciliation includes comparing book inventory to marketplace inventory reports and physical counts where available.
For businesses that import inventory, landed cost calculations include the product cost, international freight, customs duties, and broker fees. We track these components and roll them into the per-unit cost so that COGS reflects the true cost of goods, not just the vendor's invoice price.
After the 2018 Wayfair decision, economic nexus laws mean ecommerce sellers can owe sales tax in states where they have no physical presence. The threshold varies by state (most commonly $100,000 in sales or 200 transactions), and crossing it triggers a registration and collection obligation.
This is primarily a tax advisory issue for the CPA firm. But the bookkeeper's role is critical for two reasons:
The bookkeeper needs to maintain revenue records that show gross sales by state. Without this, the CPA firm cannot determine which state thresholds have been crossed and where the client needs to register.
For multichannel sellers, this means aggregating sales across all channels by destination state. Amazon sales to Texas, Shopify sales to Texas, and Walmart sales to Texas all count toward the Texas threshold. The bookkeeper needs to produce a state-level revenue summary that combines all channels.
In states where the marketplace facilitates collection (Amazon, Walmart, and most other major marketplaces now collect and remit sales tax on behalf of sellers in all states with sales tax), the seller may still have a direct collection obligation for sales through their own website (Shopify, WooCommerce, BigCommerce).
The bookkeeper needs to:
We maintain state-level sales tracking for our ecommerce clients and produce the data the CPA firm needs for nexus analysis and sales tax compliance. We do not file sales tax returns (many CPA firms use TaxJar, Avalara, or similar platforms for that), but we ensure the books are structured to feed those platforms accurately.
Ecommerce return rates typically run 15 to 30 percent, depending on the product category (apparel is the highest). The bookkeeping for returns involves:
Refund processing. When a return is processed, the sale needs to be reversed. If the marketplace also reverses its fees (Amazon refunds the referral fee on returned items, minus a processing fee), those adjustments need to be recorded too.
Returned inventory. If the item is returned to inventory in sellable condition, it goes back into the inventory balance. If it is damaged, it is written off or written down. If Amazon disposes of it, that is an inventory loss. Each scenario has different accounting treatment.
Chargebacks. Disputes initiated by the customer through their credit card company. These bypass the normal return process. The marketplace or payment processor deducts the chargeback amount (plus a chargeback fee) from future settlements. The bookkeeper needs to record the revenue reversal, the chargeback fee, and any potential recovery if the dispute is won.
Restocking fees and return shipping. Some businesses charge restocking fees or deduct return shipping costs. These reduce the refund amount and need to be recorded as revenue offsets, not fee income.
We process returns and refunds as part of our settlement report reconciliation. Every return is matched to the original sale, the inventory impact is recorded, and the fee adjustments are captured. At month-end, the CPA firm can see net revenue (after returns) by channel and the return rate by channel, both critical metrics for ecommerce businesses.
Ecommerce accounting requires data from multiple sources. The bookkeeper needs to work with:
Accounting software. QuickBooks Online (the most common for ecommerce), Xero, or Sage Intacct for larger operations.
Ecommerce platforms. Shopify, WooCommerce, BigCommerce, Magento.
Marketplaces. Amazon Seller Central, Walmart Seller Center, eBay Seller Hub, Etsy.
Integration tools. A2X (we strongly recommend this for Amazon and Shopify), Link My Books, Webgility. These tools parse settlement reports and create journal entries in the accounting software.
Inventory management. Cin7, Extensiv (formerly Skubana), ShipBob, Deliverr.
Sales tax. TaxJar, Avalara.
Shipping. ShipStation, Pirate Ship, EasyPost.
We maintain proficiency across these platforms. When a CPA firm brings us an ecommerce client, we assess which integrations are already in place, which ones would improve accuracy and efficiency, and how to configure everything to produce clean financial data. The CPA firm makes the technology decisions. We implement and operate.
Many ecommerce brands operate through multiple entities. Common structures include:
Each entity needs its own books. Intercompany transactions (IP licensing fees, management fees, inventory transfers) need to be documented and eliminated in consolidation. The bookkeeper needs to record transactions in the right entity and maintain clean intercompany balances.
We handle multi-entity ecommerce bookkeeping for several CPA firm clients. The chart of accounts and intercompany accounting methodology are set up during onboarding based on the CPA firm's specifications. Monthly, we produce entity-level financial statements and a consolidated view with intercompany eliminations.
Most outsourced bookkeeping providers treat ecommerce like retail. Record the deposits, categorize the expenses, done. That approach misses the fundamental complexity of multichannel commerce.
Here is what we do differently:
Full settlement report reconciliation. Every Amazon, Shopify, and Walmart settlement is parsed into its component parts. Gross revenue, fees, returns, and adjustments are all separately tracked.
Channel-level profitability. Revenue, COGS, and marketplace-specific costs tracked by channel. The CPA firm can produce margin analysis by channel without year-end reclassification.
Inventory reconciliation. Book inventory reconciled to marketplace inventory reports and inventory management systems monthly. Shrinkage, damage, and reimbursements are tracked.
State-level sales tracking. Revenue by state across all channels to support the CPA firm's nexus analysis and sales tax compliance work.
Integration management. We configure and maintain the data flow between ecommerce platforms, integration tools, and accounting software. When something breaks (and with ecommerce integrations, things break regularly), we fix it.
Our quality control process for ecommerce clients includes channel-specific checks: settlement amounts match bank deposits, gross revenue minus fees and returns equals net deposits, inventory book balance reconciles to physical/system counts, and sales tax collected ties to sales tax payable.
When CPA firms bring us ecommerce clients that have been handled by generic bookkeeping teams, the most common issues are:
Amazon deposits recorded as revenue. The net deposit is recorded as sales, understating true revenue and hiding fees. Sometimes by tens of thousands of dollars per month.
No inventory tracking. COGS calculated from purchases, not from actual units sold at cost. This produces wildly inaccurate margins, especially for businesses with growing or shrinking inventory levels.
Sales tax collected recorded as revenue. Sales tax the business collected on DTC orders treated as income. This overstates revenue and creates a hidden sales tax liability.
No returns tracking. Returns not netted against revenue. Gross revenue overstated. Or returns lumped into a single account with no visibility into return rates by channel or product.
FBA fees buried in a generic "Amazon fees" account. Selling fees, fulfillment fees, storage fees, and advertising fees all in one account. No visibility into fee trends or opportunities to optimize.
Fixing these issues usually takes one to two months of cleanup work during onboarding. Once the structure is right, the monthly process runs cleanly.
Ecommerce bookkeeping is data-intensive. The volume of transactions, the number of data sources, and the complexity of reconciliation make it more time-consuming than a typical service business. Pricing reflects that complexity.
That said, the cost of our fully managed ecommerce bookkeeping is 40 to 60 percent less than hiring a domestic bookkeeper with ecommerce experience. And the consistency is better, because we have standardized the process across dozens of ecommerce clients rather than reinventing it for each one.
For a broader view of outsourcing economics, our outsourced accounting services guide covers pricing models and what to expect.
If your CPA firm serves ecommerce brands and you need bookkeeping support that understands multichannel commerce, settlement report reconciliation, and inventory accounting, we are ready.
Visit madrasaccountancy.com to schedule a call. We will review your ecommerce clients' channels, platforms, integration stack, and reporting needs. No sales deck. Just a conversation about whether our capabilities match your requirements.
We track Amazon's inventory adjustments (lost, damaged, disposed) and compare them to Amazon's reimbursement records. When Amazon owes a reimbursement that has not been issued, we flag it for the CPA firm or the client to submit a claim. We record all reimbursements as separate line items (not revenue) so the financial impact is transparent. Some clients use third-party reimbursement services (Getida, SELLERBOARD), and we reconcile those as well.
Yes. Wholesale and DTC have different revenue recognition, different COGS treatment (wholesale typically has lower margin but higher volume), and different invoicing workflows. We maintain separate tracking for wholesale (invoiced revenue, net 30 terms, trade discounts) and DTC (payment at time of sale, marketplace fees, returns). The CPA firm gets a consolidated view with channel-level detail.
We have had the best results with A2X for Amazon and Shopify settlement reconciliation. It parses settlement reports accurately, handles accrual-basis revenue recognition, and produces clean journal entries in QuickBooks Online or Xero. For businesses that also need inventory sync, Cin7 or Extensiv are solid options. We do not mandate specific tools. If the client already has something working, we use it. If they do not have integration tools and the volume warrants it, we recommend A2X as the starting point.
For brands selling internationally (Amazon UK, Amazon EU, international Shopify stores), we track revenue and expenses in the transaction currency and record exchange gains or losses when settlements are converted to USD. We reconcile foreign currency bank accounts and ensure the exchange rates used are consistent (typically the rate on the settlement date). Multi-currency adds complexity, but it follows well-defined accounting rules that our team is trained on.
Our standard monthly deliverable for ecommerce clients includes: income statement with revenue by channel, COGS by channel, and marketplace fees broken out by type; balance sheet with inventory, sales tax payable, and accounts receivable detail; channel margin analysis; inventory reconciliation summary; state-level sales summary for nexus tracking; and cash flow statement. The CPA firm can customize the reporting package based on their advisory needs and the client's preferences.
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