Ecommerce Bookkeeping Cost: What Shopify and Amazon Books Need

What does an ecommerce bookkeeper do that a general bookkeeper may not?

An ecommerce bookkeeper does store-level matching: each sales channel's gross sales, fees, refunds and sales tax are recorded apart, every payout is matched to a bank deposit, the totals tie to Form 1099-K, and inventory is carried to cost of goods sold. No official source sets what ecommerce bookkeepers charge; the fee follows channels, order volume, inventory, sales tax states and backlog, so compare quotes on scope first. The Bureau of Labor Statistics describes the general job as entering transactions, producing reports and reconciling differences; a store adds channel detail on top. A general bookkeeper can do this work; check that the agreed scope names it.

What makes a store's books not simple?

Each of these turns a bookkeeping job into a scoping question:

• Payouts that no longer match the bank deposits.
• More than one sales channel, each with its own payouts and Form 1099-K.
• Stock held in more than one state, or sales tax owed in several states.
• Months that were never reconciled.
• Stock that was never counted.
• A partnership or corporation, where cost of goods sold goes on the entity's own return.

Where two or more apply, the scope and the tax questions behind it usually come before the fee.

What should I gather first?

• Each channel's payout or settlement reports for the year.
• Every Form 1099-K received.
• Bank and card statements.
• Supplier invoices and the latest stock count.
• Sales by state.
• The prior return.

Why must the books show gross sales, fees and refunds, not just the net deposit?

Books built from net deposits understate sales and show no fee or refund expense. The IRS says the gross amount on Form 1099-K does not adjust for fees, credits, refunds, shipping, cash equivalents or discounts, and that other records are needed to get from it to the income to report. Publication 583 says business books must show gross income, deductions and credits.

A store's books therefore record these separately:

• Gross sales before sales tax, by channel.
• Refunds and returns.
• Processor, marketplace and shipping-label fees.
• Sales tax collected.
• Money a processor holds back as a reserve (not an expense).
• The payout to the bank (a transfer, not a new sale).

For the entries, see reconciling sales, payouts and Form 1099-K. For Amazon, see turning a settlement report into entries. For Shopify, see payouts that do not match deposits.

How do the books tie to Form 1099-K?

Form 1099-K reports gross payments received through payment cards and through payment apps or marketplaces, so it ties to gross sales by channel, not to bank deposits. The IRS says a store paid directly by card gets a form whatever the amount. A payment app or marketplace must report when payments exceed $20,000 across more than 200 transactions, but it may report less, and a state may set a lower threshold. A store on several platforms can get several forms.

A missing form removes nothing from the books: the IRS says the form threshold does not decide whether payments are taxable. Publication 334 warns that the form may leave out receipts and may include items that are not receipts, such as sales tax.

In practice, the bookkeeper builds one short worksheet per form (a "bridge"): it starts at gross sales by channel and period, adjusts for sales tax in the payments, sales taken outside that processor and year-end timing, and ends at the form's box 1a amount. A form with the wrong payee, a duplicate or an amount the worksheet cannot explain goes to the guide on reconciling sales, payouts and Form 1099-K. For the return, see online seller income tax.

Why does inventory change the books and the return, and who values it?

A business that keeps an inventory values its stock at the start and end of each year to find cost of goods sold, and generally uses an accrual method for purchases and sales (Publication 538). Cost of goods sold is opening stock plus purchases and other costs, less closing stock (Publication 334). Without a year-end count, the closing figure is an estimate, and cost and profit move with it.

A small business taxpayer (a test of average gross receipts) may choose not to keep an inventory but must still use a method that clearly reflects income (Publication 334). One permitted method treats stock as non-incidental materials and supplies, with its cost recovered through cost of goods sold in the later of the year the goods go to customers and the year the cost is paid or incurred (26 CFR 1.471-1). For the test and the choice, see inventory or supplies for small sellers.

Where the cost goes depends on the filer. A sole proprietor, which includes an individual who is the only member of an LLC that has not elected corporation treatment, uses Schedule C, lines 35 through 42 (Publication 334). A partnership or corporation attaches Form 1125-A when it deducts cost of goods sold.

A business that keeps a running inventory must still take a physical count at reasonable intervals and adjust the books to match (Publication 538). For Amazon fulfillment stock, see FBA fees and inventory.

Who collects sales tax on marketplace sales, and what does the bookkeeper track for my own store?

The marketplace collects and remits tax on sales made through it where a state has a marketplace rule; the owner collects on the store's own sales where the owner has a duty to. States set their own rules; Texas and California are two examples.

• Texas: a marketplace provider must collect, report and remit tax on all sales made through its marketplace. A seller need not collect once the provider certifies that it will (without a certification, the seller should), but a Texas seller still needs a permit and must file, even if every sale goes through a marketplace.
• California: the marketplace facilitator is the retailer for facilitated sales, meaning sales made through the marketplace. A seller whose California sales all go through such a facilitator is generally not required to register, but CDTFA also treats a seller that stores inventory in a California fulfillment center as engaged in business there, and does not say how the two fit when a marketplace holds the stock; ask CDTFA. A seller that also makes direct sales, for example on its own website, and has a physical presence (which includes maintaining inventory in the state) or combined sales for delivery in California by the seller and its related persons, such as family members or companies the same owner controls, over $500,000 in the preceding or current calendar year, counting marketplace sales, may have to register.

For a store the owner runs, the bookkeeper tracks:

• Sales by destination state and channel, marketplace sales included, because California counts them toward its threshold.
• Sales of related businesses, where a state's threshold adds them together.
• Tax collected on the store's own orders, by state, as a liability. Publication 334 says buyer-imposed sales tax you collect and pay over is not income; tax imposed on you as seller is part of gross receipts.
• Tax a marketplace collected and remitted, shown apart from tax the owner owes.
• Each marketplace's tax certification or account number, and each state permit.
• Returns filed and payments made, matched to the liability account.
• Where stock sits, because a state can treat stock held there as presence.

For which states to collect in, see Shopify sales tax by state and when you must collect sales tax. For returns, see filing sales tax returns.

What records should the bookkeeper keep, and how often should the accounts be reconciled?

The bookkeeper should keep every record that proves the books' income and cost, and reconcile the business bank account each month. The IRS accepts any system that clearly shows income and expenses; the owner must still be able to substantiate each entry.

Publication 583 says you should keep a business account separate from a personal one and reconcile the checking account each month. It adds that electronic records must reconcile with the books and the return and identify the source documents. A store's monthly close also matches each payout's transactions to its deposit; that is bookkeeping practice, not an IRS rule.

Keep records as long as they could prove a return. The general limit for assessing more tax is 3 years after the return is filed (a return filed early counts as filed on its due date), and longer periods apply in listed cases (Publication 583, Table 3). Sales tax and marketplace records follow state rules, which can be longer: Texas, for example, requires a remote seller that sells only through a marketplace that certifies it collects the tax to keep records of those sales for at least 4 years (Texas Comptroller). For each record's period, see how long to keep business records.

What drives an ecommerce bookkeeper's fee, and am I overpaying?

The fee follows how much has to be reconciled, and no official source publishes what ecommerce bookkeepers charge. This page therefore gives the drivers, not a price.

Hold any quote against these lines; a quote that leaves several blank is not comparable yet. A fee that leaves out inventory or sales tax covers less work, so compare quotes for the same scope. A one-channel shop with no stock may not need the full store scope. For what a backlog costs, see catch-up bookkeeping cost; for a monthly price for any small business, see bookkeeping cost per month.

What should I look for in a Shopify or Amazon bookkeeper, and what should they show me before I hire?

Look for proof that they have matched a store's payouts to its deposits, not a list of software. Ask a candidate to show:

1. A payout matched to a bank deposit, with gross sales, fees and refunds visible (a sample with names removed).
2. How they tie a store with two channels to its Form 1099-K forms.
3. How inventory is handled: who counts, how often, how cost is carried (including whether stock cost includes shipping in and import duties), and what happens when the count and the books differ.
4. Which sales tax duties they track, whether they file returns or only report the numbers, and how they record tax a marketplace collects.
5. What they need from you when a sales channel does not export detail.
6. When each month closes, who owns the accounting file, and what access they need.
7. How orders fulfilled by a supplier or print-on-demand partner (no stock held) are recorded.

For general hiring questions, see questions to ask before hiring a bookkeeper. To check a bookkeeper you already have, see checking your bookkeeper's work.

Local bookkeeper, store-focused bookkeeper or software only?

A general local bookkeeper can fit a one-channel shop with simple stock; a store with several channels, stock or several sales tax states usually wants someone who has matched store payouts before.

Whoever keeps the books, the owner carries the burden of proof for what the return reports, meaning the owner must be able to show where each number came from. For what a store platform does and does not do, see does Shopify do bookkeeping. For where the bookkeeper sits, see local or online bookkeeper.

What do I still have to send each month?

The owner sends what the bookkeeper cannot pull from a feed:

• Reports from any channel or payment account that does not export detail.
• Supplier invoices for stock bought.
• Stock moved in or out of a warehouse or fulfillment center.
• Sales tax notices, permit letters and marketplace certifications.
• Notes on unusual refunds, disputes or holds.
• Which transactions are personal.

For the full list, see what your bookkeeper needs from you and what a monthly bookkeeping service includes.

When does a store need a CPA and not only a bookkeeper?

A store usually needs a CPA's input when the question is a tax position, not a record. A bookkeeper records what happened; the return decides how it is reported.

If two or more rows fit, bring the payout reports, Forms 1099-K and stock records to bookkeeping so the scope and the tax questions are settled together. For who does what, see bookkeeper, accountant or CPA.

Example

These examples are illustrative and use US dollars.

One Shopify channel, no stock count

A store sells US$400,000 a year through one channel and one card processor, with about 3,000 orders and sales tax left out of this example. Refunds are US$16,000 and processor fees are US$12,000, so the bank receives US$372,000. The books record US$400,000 of sales, US$16,000 of refunds and US$12,000 of fees. Form 1099-K shows about US$400,000, which ties to sales, not to the deposits.

Opening stock was US$50,000 and purchases were US$180,000, and the owner keeps an inventory but took no count at year end. With a count of US$60,000, cost of goods sold is US$170,000. Without a count, the closing figure, and so the profit, is an estimate.

Amazon fulfillment plus a Shopify store

A seller has US$900,000 of sales a year across both. In one busy month the Amazon sales report shows US$85,000 and the payout is about US$75,000. The US$10,000 gap is fees and refunds, say US$8,000 and US$2,000, not lost sales. The books record US$85,000 of sales, US$8,000 of fees and US$2,000 of refunds. Recording US$75,000 as sales would understate sales by US$10,000 and hide the US$8,000 of fees. With stock in several states and sales tax in several states, the owner also needs the tax questions answered, not only the monthly entries.

A small craft shop

An owner sells US$25,000 a year through one marketplace and reconciles the bank account each month. In a shop this size, a monthly payout record that shows gross sales, fees and refunds, a year-end stock count and a review may cover the books; a second channel, more stock or a sales tax duty in another state widens what must be covered.

Different for you?

• Your payouts, inventory and sales tax no longer reconcile, or you sell through more than one channel or into several states: that is a scope question before it is a price question. Bring the payout reports, Forms 1099-K and stock records to bookkeeping.
• Months or years are unreconciled: see catching up on overdue books, then get bookkeeping help to rebuild them.
• You resold goods without tracking stock or receipts: see inventory and cost of goods without records.
• You hold stock in several states or may owe sales tax in several: see when you must collect sales tax and economic nexus thresholds by state, then bring your sales by state and stock locations to bookkeeping.
• Form 1099-K does not tie to your sales, a notice arrived about income or sales tax, or tax you collected was never paid over: see reconciling sales, payouts and Form 1099-K and sales tax payable that does not match the return; if the gap goes back to a filed year, bring the forms and reports to bookkeeping.
• Amazon is your main channel: see Amazon seller bookkeeping.
• You run a small craft shop: see bookkeeping for a small online shop.
• The owner lives outside the US, or the seller account sits in an LLC owned from abroad: see marketplace payouts in a foreign-owned LLC, then bring the payout reports to bookkeeping.
• Your business is Canadian and sells in US dollars: see US-dollar sales and marketplace payouts.