E-commerce bookkeeping is the process of recording and managing all financial activities of an online business, including sales, returns, fees, and expenses. It tracks every transaction across e-commerce platforms to maintain accurate financial records. The goal is to understand your store’s cash flow and make sound business decisions based on real data.
You didn’t start your business to chase receipts or reconcile bank feeds! Instead, you started it to grow sales, achieve customer satisfaction, and build something profitable. Agreed! But without clear financial records, your e-commerce brand can lose its balance.
Bookkeeping for an e-commerce business means tracking every sale, payment, return, fee, and expense that flows through your store. It shows exactly where your money comes from and where it goes.
If you are struggling with e-commerce and accounting, read this article to learn how to keep books for an e-commerce business, the best tools to manage your finances, and proven techniques to stay compliant with taxes.
How E-commerce Platforms Connect with Bookkeeping?
E-commerce platforms like Shopify, BigCommerce, WooCommerce, or Adobe Commerce let you sell products online. But they don’t handle your finances! You still need to record every sale, expense, and tax transaction to keep your books balanced.
Nowadays, most e-commerce platforms come with built-in tools that show key details for e-commerce bookkeeping, such as sales, inventory levels, and collected taxes. These tools don’t replace your e-commerce bookkeeper or accounting software, but they help you stay organised and make tax filing smoother.
Each platform also charges merchant fees (a small cost for processing your sales). These fees vary by platform and must be recorded as expenses in your bookkeeping for an e-commerce business.
To simplify this process, you can connect bookkeeping software with your e-commerce platform. This link allows you to automatically track income, expenses, and taxes.
How to Keep Books For An E-Commerce Business In 2025?
Good e-commerce bookkeeping is what keeps your online business financially steady. No matter what platform you sell on, these best practices will help you stay in control of your numbers and make tax time stress-free:
1. Sync Your Store with Accounting Software
Every e-commerce platform, from Shopify to WooCommerce, can connect with bookkeeping software like QuickBooks or Zoho Books. This integration allows all your sales, expenses, and taxes to flow directly into your accounting system.
When your e-commerce setup bookkeeping is connected, you can easily match your sales reports with your accounts and avoid missed entries. It also keeps your bookkeeping for e-commerce business accurate when it’s time to file returns or calculate taxes.
2. Set Up the Right Tax Rules
Each state or country has its own tax laws. When you sell online, your platform must know where to apply or skip taxes. In your store’s settings, define your business location and the regions where taxes apply. Doing this helps your platform collect the right tax from each sale.
Accurate tax setup ensures your e-commerce bookkeeping stays compliant, and you don’t face problems later while filing returns. It also saves time since taxes are automatically calculated at checkout.
3. Reconcile Your Accounts Regularly
Your e-commerce platform keeps a record of every sale and transaction. Download these reports often and match them with your bank and accounting records. This process is called reconciliation. It allows you to spot:
- Missing payments
- Chargebacks
- Duplicate entries
Regular reconciliation is the backbone of bookkeeping for e-commerce because it ensures your financial data is real and complete. It also keeps your profit and loss statement free from any errors.
4. Track Returns and Chargebacks Promptly
In e-commerce, returns and chargebacks are normal, but they affect your numbers. If a customer returns an item or a payment gets reversed, your sales and tax figures change. These changes must be recorded in your e-commerce bookkeeping to show the correct income and expenses. Ignoring them can make your profit look higher than it actually is.
5. Record All Business Expenses
Your e-commerce platform only tracks sales-related transactions. Other costs, such as packaging, advertising, salaries, or storage, must be recorded manually. For complete bookkeeping for your e-commerce business, maintain a list of every expense linked to your store.
This gives you a full view of where your money goes and helps in managing cash flow. Additionally, accurate expense tracking also ensures your business claims all valid deductions during tax filing.
6. Automate Your Bookkeeping Process
Automation reduces manual errors and saves time! You can automate reports, payment tracking, and tax calculations through e-commerce bookkeeping software. Once your store and accounting system are linked, transactions update automatically.
This allows you to focus on operations while your ecommerce bookkeeper monitors financial accuracy in the background. Automation makes e-commerce bookkeeping smoother and ensures that your records stay current without constant manual work.
Handle Sales Tax the Right Way in E-Commerce Bookkeeping!
Sales tax is one of the most important parts of bookkeeping for an e-commerce business. If you sell across states, you must know where and how to collect it. Below is how small ecommerce businesses can stay compliant + keep their books accurate:
1. Identify Where You Have a Sales Tax Nexus
A “nexus” means your business has a physical or economic presence in a state. You create a nexus if you store inventory, hire employees, or live in that state. You may also have a nexus if your sales reach a certain amount within a state, even without a physical office.
Understanding where you have nexus helps your e-commerce bookkeeper know which states you owe sales tax to. Failing to register where required can lead to penalties and tax issues later.
2. Know Which Products Are Taxable
Different states tax products differently. Some states tax clothing, while others don’t. Similarly, digital goods, groceries, or books might have separate tax rules. As a VP or director of an e-commerce store or a D2C company, you must check each state’s tax website to confirm how your products are treated.
Knowing this helps you collect the correct amount of tax from customers and keeps your records accurate. Recording this correctly in your ecommerce setup bookkeeping ensures you don’t overpay or under-collect taxes.
3. Register for Sales Tax Permits
Before you start collecting sales tax, register your business for a sales tax permit in every state where you have nexus. This registration gives you legal permission to collect tax from customers. Some states may also need a business license to sell there.
Your bookkeeping for an e-commerce system should store these registration details to track where you’re authorized to collect tax. Always remember that keeping all permits organized avoids compliance problems.
4. Collect Sales Tax Through Your E-commerce Platform
Once your store is set up, configure your e-commerce platform. This allows you to automatically apply sales tax at checkout. The system will add the right rate based on the customer’s location and your tax settings. This feature reduces errors and keeps all sales data consistent.
Remember to periodically review the tax rules, as rates can change. Always record the tax collected in your accounting software for accurate reports.
5. File Your Sales Tax Returns on Time
After collecting sales tax, you must submit it to each state’s tax department before the deadline. Your e-commerce bookkeeper or accounting software can help you track due dates and prepare filings. Filing involves reporting how much sales tax you collected and paying that amount to the state.
Need Assistance? Hire Atidiv As Your E-commerce Bookkeeper in 2025!
E-commerce bookkeeping is highly important for every online business! It keeps your finances organised, your taxes accurate, and your decisions data-driven. To strengthen your bookkeeping process, follow these best practices:
- Integrate your store with accounting software
- Reconcile accounts at the end of each month
- Track inventory, returns, and chargebacks carefully
- Record every business expense promptly
- Automate data entry and financial reports
If managing sales tax or ecommerce bookkeeping feels overwhelming, you can outsource it to leading accounting companies in the USA, like Atidiv. Our experienced team offers comprehensive bookkeeping services from daily transactions and monthly reconciliations to detailed financial reporting.
We have 16+ years of experience and maintain an impressive 95% client retention rate. To know more, book a free consultation call today!
E-commerce Bookkeeping FAQs
1. Why is e-commerce bookkeeping more complex than regular bookkeeping?
E-commerce bookkeeping involves tracking:
- Multiple online sales channels
- Merchant fees
- Taxes across states
- Digital payment gateways
Unlike traditional businesses, online sellers must manage returns, platform deductions, and inventory in real time. All of this makes accurate financial tracking more complex and time-sensitive.
2. How often should I reconcile my e-commerce accounts?
You should reconcile your accounts monthly to ensure all sales, refunds, and expenses match your bank records. This helps catch missing payments, double entries, or transaction errors early.
3. What tools can simplify e-commerce bookkeeping in 2025?
In 2025, you may use cloud-based accounting tools like QuickBooks Online, Xero, and Zoho. They can integrate easily with major e-commerce platforms and automatically:
- Record transactions
- Track taxes
- Generate reports
Alternatively, you can outsource e-commerce bookkeeping to leading agencies, like Atidiv. This lets you achieve cost savings (up to 60% with Atidiv) and gives access to experienced professionals from day 1.
4. How should I manage sales tax for multiple states?
Start by identifying where your business has nexus, then register for sales tax permits in those states. Use your e-commerce platform’s tax settings to collect the right tax automatically.
Additionally, keep detailed records of collected tax amounts and file returns on time to avoid penalties or missed payments.
5. How does poor e-commerce bookkeeping impact business growth?
Inaccurate or delayed bookkeeping can:
- Distort your profit margins
- Misstate cash flow
- Lead to wrong pricing or tax filings
Without accurate financial data, it’s also difficult to plan inventory and secure funding. All this ultimately slows your e-commerce growth and profitability.
6. Can I manage e-commerce bookkeeping myself without accounting knowledge?
You can start on your own using integrated tools, but as sales grow, manual tracking becomes risky. There could be errors in tax setup, refunds, or fees that can cause compliance and cash flow issues.
The safest option? Partner with an experienced e-commerce bookkeeper, like Atidiv, who offers comprehensive bookkeeping services. This maintains accuracy + keeps your financial records investor- and tax-ready.