Industry
Accountants for ecommerce businesses
Marketplace reconciliation, VAT on online sales, stock valuation and true profit by channel.
Overview
Your sector, in practice
Ecommerce accounting is a reconciliation problem before it is a tax problem. Platform payouts are net of fees, refunds, chargebacks and advertising, so the money hitting the bank bears little relation to the sales that generated it.
We work with online sellers running Shopify stores, Amazon and eBay listings and Etsy shops, putting a structure in place that shows real gross margin by channel rather than a single net deposit each fortnight.
Challenges
What makes this sector different
Payout reconciliation
One Amazon settlement can contain a dozen categories of income and cost. Posting it as a single sale destroys the margin analysis.
Marketplace VAT rules
Where the platform is deemed supplier, the VAT treatment of the same product differs by transaction. Overseas sales add further layers.
Stock valuation
Inventory sitting in fulfilment centres is still yours, must be valued at year end, and is frequently missed entirely.
Ad spend and true margin
Advertising cost per sale can turn an apparently healthy product line into a loss maker.
Tax and accounting
Key considerations
Integration choice
A2X, Link My Books or a similar tool converts settlements into accurate journals. Doing it by hand does not scale.
Overseas thresholds
Selling to consumers in other countries can create registration obligations abroad.
Import VAT and duty
Postponed VAT accounting affects the return and the cash position for importers.
Returns provisions
Where return rates are meaningful, the year-end accounts should reflect them.
How we help
Our work for these businesses
- Platform integration and settlement-level bookkeeping
- VAT registration, returns and marketplace rule review
- Stock and inventory valuation at year end
- Channel and product-level profitability reporting
- Corporation Tax and statutory accounts
- Cash flow planning around stock purchase cycles
Watch out
Common mistakes we see
- Recording the net payout as turnover
- Ignoring fulfilment centre stock at the year end
- Assuming the platform handles all VAT obligations for you
- Measuring success by revenue rather than contribution after advertising
- Buying stock on the strength of a good month without a cash forecast
FAQs
Ecommerce questions
It depends on your turnover and where your customers and stock are located. Marketplaces account for VAT on some transactions, but that does not remove your own registration obligation in every case. It should be reviewed specifically.
Enquire
Tell us about your business
A short conversation is usually enough for us to tell you whether we can improve on what you have now.
Related services
Services that work alongside this
- BookkeepingAccurate, reconciled records kept up to date weekly or monthly, so VAT, payroll and year-end all take care of themselves.
- Management AccountsMonthly or quarterly reporting that shows margin, cash and tax exposure while you can still do something about them.
- VATRegistration, scheme selection, quarterly returns and the awkward questions — reverse charge, partial exemption and cross-border supplies.
- Corporation TaxComputations and CT600 filing, with the reliefs, allowances and extraction strategy reviewed before the return is submitted.
Related industries
Businesses we work with
- PropertyDevelopers, investors and property companies — structure, VAT on development, appraisals and funding.
- Limited CompaniesEverything a Scunthorpe limited company needs — accounts, tax, payroll, VAT and director planning in one place.
- Sole TradersSimple, affordable support for the self employed — accounts, tax returns and honest advice on going limited.
- Professional ServicesConsultancies, agencies and practices — utilisation, work in progress, partner drawings and extraction.