E-commerce Bookkeeping 101: What Amazon, Etsy, and Shopify Sellers Need to Know

Running an e-commerce business can be exciting and rewarding. When it comes to bookkeeping, things can get complicated fast. Between multiple sales channels, payment processors, returns, and inventory management, tracking your true profit is not as simple as checking your bank balance.

If you sell on platforms like Amazon, Etsy, or Shopify, understanding the basics of e-commerce bookkeeping is essential to staying compliant, saving money, and making smarter business decisions. In this guide, we’ll break down what every online seller should know.

1. Why E-commerce Bookkeeping Is Different

Bookkeeping for e-commerce businesses goes far beyond simple income and expense tracking. Unlike traditional businesses, online sellers deal with:

• Multiple sales platforms (Amazon, Etsy, Shopify, eBay, etc.)

• Transaction fees and commissions

• Refunds and chargebacks

• Inventory costs and cost of goods sold (COGS)

• Sales tax collection across different states

Each of these elements affects your bottom line and can make your financials difficult to interpret if not managed properly. A clear bookkeeping system helps you understand not just your revenue, but your true profit.

2. Separate Business and Personal Finances

If you have not done this yet, now is the time. Mixing personal and business finances is one of the most common mistakes new sellers make.

Set up dedicated business bank and credit card accounts. This will make your bookkeeping cleaner, protect your personal assets, and simplify tax preparation. You will thank yourself later when it is time to reconcile your books.

3. Use Cloud-Based Accounting Tools Like QuickBooks Online

QuickBooks Online (QBO) is one of the most powerful tools for e-commerce sellers. It integrates with platforms like Shopify, Amazon, Etsy, PayPal, and Stripe, making it easier to sync sales and expenses automatically.

With QBO, you can:

• Track income and expenses from multiple sales channels

• Manage sales tax by state

• Reconcile payment processor deposits (like Shopify Payments, PayPal, or Stripe)

• Generate financial reports in real-time

If you are serious about scaling your business, using a cloud-based system is non-negotiable. It provides instant access to your numbers, whether you are in the office or managing your store from your phone.

4. Understand and Track Cost of Goods Sold (COGS)

Your profit depends heavily on knowing your COGS, the total cost of making or purchasing your products.

This includes:

• Raw materials or wholesale product costs

• Shipping and packaging

• Import duties

• Warehousing or fulfillment fees

Accurately tracking COGS allows you to see your gross profit and understand which products are truly profitable. Without this insight, you may be unknowingly losing money on your best-sellers.

5. Manage Sales Tax the Right Way

Sales tax is a major headache for many online sellers, especially since tax laws vary by state. Platforms like Shopify and Amazon can help collect sales tax, but you are still responsible for ensuring those amounts are filed and paid correctly.

QuickBooks Online integrates with apps like TaxJar or Avalara, automating sales tax tracking and helping you stay compliant. This is crucial as your sales grow and you start triggering “nexus” in multiple states.

6. Reconcile Regularly and Review Financial Reports

Reconciling your accounts monthly ensures your records match what’s in your bank and payment processors. This step prevents small errors from snowballing into big issues.

Key reports to review monthly include:

• Profit and Loss Statement (P&L): Shows whether your business made money.

• Balance Sheet: Displays assets, liabilities, and equity.

• Cash Flow Statement: Reveals how money moves in and out of your business.

By reviewing these reports regularly, you’ll spot trends early, catch errors, and make informed decisions.

7. Consider Hiring a Bookkeeper Specializing in E-commerce

As your business grows, bookkeeping becomes more complex. A professional bookkeeper experienced in e-commerce can help you:

• Set up integrations with Amazon, Shopify, or Etsy

• Categorize transactions properly

• Track COGS and sales tax

• Prepare your books for tax season

• Identify areas for improving profit margins

Partnering with a specialist ensures your financial data is always accurate and up to date, giving you peace of mind and more time to focus on growing your store.

Final Thoughts

E-commerce bookkeeping does not have to be overwhelming. With the right systems, tools, and professional support, you can gain total clarity on your numbers, and finally understand what’s driving your success.

At Eddington Financial Solutions, we help online sellers simplify their bookkeeping with QuickBooks Online, giving them accurate financial insights at their fingertips. Whether you sell on Amazon, Etsy, or Shopify, we will help you streamline your books and grow with confidence.