Ecommerce Bookkeeping Basics

Ecommerce bookkeeping has a trap built into it: the money that lands in your bank account has already been edited. By the time Shopify, Amazon or eBay pays you, the platform has deducted its fees, netted off refunds, and sometimes held back a reserve. If your books treat that deposit as sales, every number downstream — income, expenses, margins, GST — is quietly wrong.

None of this makes ecommerce bookkeeping hard. It makes it different. The bank feed, which is the backbone of most small business files, is only the last chapter of the story for an online seller. The real record of what happened is the platform's settlement report, and the bookkeeping job is to get that story into the file intact.

The payout is not your income

A payout is a net number: gross sales, minus refunds, minus platform and payment fees, plus or minus adjustments, sometimes minus a rolling reserve. Coding it straight to sales understates your true revenue and completely hides the fees — which are often one of the biggest costs in the business. It can also distort the sales figures your GST position and any registration decision rest on, because those look at your sales, not at what the platform chose to deposit.

Split every settlement three ways

• Gross sales — the full amount customers paid, recorded as income.
• Refunds — recorded as a reduction of sales in their own right, not silently netted away.
• Fees — platform commissions, payment processing and advertising charges, recorded as expenses.

The mechanics usually run through a clearing account: the settlement report posts gross sales, refunds and fees into it, and the bank deposit then clears the balance. When the clearing account returns to zero, you know the settlement and the bank agree. Connector tools such as A2X, or the platform integrations available for Xero and MYOB, can automate this split so it does not become a manual chore.

More channels, more currencies, same rule

Selling on several platforms multiplies the moving parts but not the principle. Give each channel its own clearing account so a Shopify problem cannot hide inside an Amazon balance. For sales in foreign currencies, record the sales as reported by the platform and let the difference on conversion land in a currency gain or loss account — forcing the sales figure to match the Australian dollar deposit buries real information and makes reconciliation guesswork.

What we commonly see go wrong

• Payouts coded straight to sales, so revenue is understated and fees never appear anywhere in the file.
• Refunds invisible in the books because they were only ever netted inside the payout.
• One clearing account shared across every platform, holding a balance nobody can explain.
• Platform advertising and subscription charges deducted inside settlements and never captured as expenses.
• Reserves and delayed settlements treated as missing money instead of a timing difference sitting in the clearing account.

A worked example

As an illustration: an online homewares seller codes every Amazon deposit to sales. The file shows modest income, almost no selling costs, and a healthy-looking margin. When the settlement reports are brought in properly, gross sales are substantially higher, a large block of fees and advertising appears as expenses, and refunds become visible for the first time. The net profit barely moves — but the business owner discovers the platform is her single largest supplier, and the pricing and advertising decisions that follow look nothing like the ones the old numbers suggested.

When to get help

If your sales figure is really a list of bank deposits, if a clearing account is carrying a balance you cannot explain, or if you sell on more than one platform and the file has never quite reconciled, it is worth getting the structure set up properly once — settlement reports in, clearing accounts per channel, fees visible. After that, the routine is genuinely manageable.

Can I just record the platform payout as my sales?

It is the most common shortcut and the most misleading one. The payout is a net figure after fees and refunds, so coding it to sales understates income and hides your selling costs entirely. Record gross sales, refunds and fees separately, and use a clearing account to tie them to the deposit.

Do I need a connector tool like A2X?

Not necessarily — the same result can be achieved manually from settlement reports. But as order volume grows, a connector that posts summarised settlements into Xero or MYOB saves significant time and removes most of the manual-entry errors. Many sellers adopt one once monthly reconciliation starts taking hours.

How should refunds be recorded?

As a reduction of sales in their own right, not silently absorbed into a net payout. Keeping refunds visible protects your sales figures, keeps GST reporting cleaner, and lets you watch the refund rate — which is often an early warning sign about a product or listing.