Ecommerce Accountant: Step-By-Step Guide for E-commerce Accounting

Apr 01, 2024
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Content of the post

Discover the essential role of an ecommerce accountant in driving business growth. From tracking financial transactions to optimizing cash flow, explore this comprehensive guide for invaluable insights.

Ensure your online store thrives with effective accountant strategies tailored for sustainable success. Elevate your financial management prowess and unlock the potential for long-term growth.


What is an Ecommerce Accountant?

E-commerce Accounting is the process of recording and tracking all financial transactions (including purchases, sales, receipts, and payments) and issuers, listing the cost of goods sold (COGS), customer acquisition costs, payroll, and all associated operating expenses, etc.

ecommerce accountant;
Ecommerce accountants: Manage financial records specifically for online businesses.


Having up-to-date books is important because it allows you to know how your business is performing at any given time.
With this, you may encounter many problems, including:

  • Lack of cash.
  • You struggle to have funds available for restocking or to meet payroll.
  • Tax issues and fines.


The Difference Between Bookkeeping and Accounting

While both are crucial, bookkeeping and accounting have distinct roles. Bookkeeping is the meticulous recording of every transaction, like a cash register keeping a running tally.

Accounting takes that data and analyzes it, providing insights into your business health. Think of it as a financial detective using the bookkeeping records to solve the mystery of your financial performance.


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Building Your Ecommerce Accountant System: A Step-by-Step Guide

Have you ever wondered why big companies such as Amazon, Alibaba, Walmart, etc. can manage their financial statements, their cash flows, and billions of dollars for thousands of distributions? It all begins with a few simple steps: 

Step 1: Gathering Resource

Imagine you're a detective, but instead of crimes, you're solving the mystery of your business finances. The first step?

Gathering your crew of evidence - the receipts, invoices, and bank statements that show where your money went and came from.

Think of these documents as little witnesses. They tell the whole story:

  • The date: When did the transaction happen?
  • The players: Who bought something (you or your customer)? Who sold it (you or a supplier)?
  • The loot: How much money was involved?
  • The goods: What product or service was bought or sold?

Most of the time, your bank statement is your star witness. It tracks all your electronic transactions, like a detailed log of who came and went from your financial party.

But cash transactions are like undercover operations - they don't show up on the bank statement. So, for those, you need to hang onto the receipt or make a note of what you bought.

Pro Tip: Using a debit or credit card for most transactions makes accounting a breeze. Your bank statement becomes your one-stop shop for evidence, making your financial investigation a whole lot easier!

Step 2: Categories your transactions

Imagine that you are the owner of the coffee house, these 5 categories breakdown examples gonna help you to deeply understand:

  • Assets (Your Stuff): Cash in your register - The money you have readily available. 
  • Liabilities (What You Owe): Money owed for office supplies - That stack of invoices from your supplier.
  • Equity (Your Ownership Stake): Your initial investment - The money you put in to start your business.
  • Revenue (The Cash Coming In): Selling a coffee - The income you get from each customer.
  • Expenses (The Cost of Doing Business): Buying coffee beans - The money you spend to keep making those coffees! 

Pro Tip: Software Makes it Easy: accountant software like QuickBooks can be a lifesaver for organizing and sorting your transactions.

ecommerce accountant;
Ecommerce accountants analyze data to identify trends and opportunities. 


Step 3: Balancing the accounting (Reconciliation)

This step is the process of making sure every single transaction matches up perfectly between your bank statement and your accounting software. Think of it as balancing the scales for your business finances which is an indispensable part of your business. 

Here's how it works:

  • Grab Your Scorecard: Start by comparing the beginning balance on your bank statement with the same number in your accounting software. They are twins, so don't make it different.
  • Line by Line: Go through each transaction on your bank statement, one by one, and make sure it's also listed in your accounting software, with the same amount.

By the end, if everything matches up perfectly, we are sure that you have achieved financial skills! On the other hand, If you find any mismatched transactions, don't panic, it happens all the time for beginners. Just track down the error and fix it. Do this in a disciplined manner because small mistakes can lead to big consequences.

Remember: Regular reconciliation is like a financial checkup. It keeps your books healthy and makes sure your money story is clear and accurate.


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Step 4: Report the data of accounting

After all the calculations, collecting receipts, and balancing the accounts, it's time to display all your findings. 

There are three main ones:

The balance sheet: is a snapshot of your company's financial health at a specific point in time. It shows assets, liabilities, and how much of your own money is invested (stocks). Everything must balance perfectly.

"The Income" (or profit and loss statement): This report card tells you how much money your company made (revenue) and how much it spent (expenses) during a given period of time. Basically, it reveals whether you are making profits or losses.

"Cash Flow" – ​​This report tracks the movement of your actual cash flow. It shows how your cash account is affected by your trading activities (trading), how much you borrow or repay loans (financing), and any money coming in or out of investment.

By gripping these reports, you will be able to gain insight into your company's finances and make smarter decisions about your money and also your future.

ecommerce accountant;
Understanding of digital marketing is a plus for ecommerce accountants.  


Step 5: Accounting Summary

After piecing together a comprehensive financial picture throughout the previous 4 steps, step 5 is for you to step back and analyze to see more deeply the meaning of that picture.

Pro-tip for "Balance Sheet": 

Analyze the ratio of your current assets (easily converted to cash) to your current liabilities (debts due within a year). A low ratio might indicate difficulty paying upcoming bills. 

Pro-tip for "Income": 

Compare your gross profit (revenue minus cost of goods sold) to your previous period. A significant decrease might indicate pricing issues or inefficiencies in production.

Pro-tip for "Cash Flow": 

Analyze your operating cash flow. Is it consistently negative? This might indicate you're not collecting payments fast enough or spending too much on inventory. Time to optimize your cash flow

Step 6: Take Action

Remember, Accountant isn't just about numbers - it's about using them to your advantage. The data you gather helps you make smarter, more profitable decisions.

By following these six steps, you've laid the groundwork for a robust E-commerce Accountant system. Remember, this isn't just about numbers; it's about using your financial data as a compass to navigate toward informed decisions and fuel the sustainable growth of your online store.


Mastering Inventory & Accounting: 

Imagine your online store – a bustling hub of activity. Every item flowing in and out needs precise tracking for seamless operations. Mastering inventory management and accounting is like conducting a financial symphony, where each note contributes to harmony. This guide delves into strategies that streamline your accounting and elevate your financial prowess.

Streamlining Your Finances: 

Maintaining financial order is key for a thriving online store. Explore essential E-commerce accounting tasks that ensure your financial ship sails smoothly. From managing accounts payable/receivable to reconciling bank statements, this section equips you with the tools for success.

Ecommerce-Specific Growth Strategies

Accounting data is crucial. Learn actionable strategies to leverage your data for growth opportunities. Through video tutorials, we'll show you how to manage inventory in popular platforms like Shopify and Amazon FBA, helping you unlock the full potential of your financial data.

Avoiding Common Pitfalls

Steering clear of accounting pitfalls is essential for long-term success. We'll explore real-life case studies and highlight common mistakes like inaccurate inventory tracking or neglecting sales tax compliance. Learn how businesses overcome these challenges and emerge stronger.

ecommerce accountant;
Ecommerce accountants often collaborate with other departments.


Best Practices for Accurate Records

Maintaining accurate financial records is non-negotiable. Explore actionable tips like regular reconciliations, robust internal controls, and data backups. By adopting these best practices, you'll safeguard your business against pitfalls and pave the way for long-term success.

Integrating Accounting with Business Strategy

Financial goals and business objectives should be aligned! Explore actionable tips for forecasting, budgeting, and resource allocation based on financial insights. By weaving accounting into the fabric of your business strategy, you'll unlock new avenues for growth.

The Role of an E-commerce Accountant:

Imagine an E-commerce accounting as your trusted captain, guiding you through the financial waters of your online store.

They provide more than just record-keeping; they offer strategic guidance and insights to propel your business forward.

Explore the myriad services offered by an E-commerce accountant, from daily tasks to tax preparation and financial analysis.


When to Consider Outsourcing Accounting Needs

Knowing when to outsource your accounting is key to optimizing efficiency and productivity. It's about leveraging external expertise to streamline your operations.

Explore the benefits of outsourcing, from scaling your business to freeing up valuable time and resources. By making informed decisions about outsourcing, you'll position your business for long-term success.


Tools and Resources for E-commerce Accounting Success

The right tools and resources empower informed decision-making. We curate a list of top-notch accounting tools and software, categorized based on features and budget. Find the perfect fit to streamline your processes and elevate your financial management.

ecommerce accountant;
Ecommerce accounting can involve dealing with international transactions and tax regulations. 


Tax Resources for E-commerce Businesses

Navigating tax requirements can be daunting. Explore a curated list of tax resources for E-commerce businesses, complete with clear steps on how to leverage them effectively. By arming yourself with the right knowledge, you'll navigate the complex world of taxes with confidence and ease.


Frequently Asked Questions (FAQs)

1. Do you need an accountant for ecommerce?

The accountants in ecommerce are the ones who play a vital role in managing the online businesses. They are in charge of managing sales data, designing account systems and combining software with e-commerce platforms. Moreover, they can help you with taxes, revenue tracking, and be an advisor in marketing.

2. How does ecommerce accounting work?

The e-commerce accounting includes the managing of the payments made via credit cards or digital payment method.
In contrast to typical retail outlets, e-commerce companies must constantly monitor and reconcile sales, returns, refunds, and payments from different sources, such as PayPal and Stripe.



Effective accounting is the cornerstone of any successful E-commerce business. It's the key to financial clarity, informed decision-making, and sustainable growth.

By mastering inventory management, implementing essential accounting tasks, and utilizing the right tools and resources, you'll transform your online store into a financial powerhouse.

Remember, good accounting isn't just about numbers – it's the compass that guides you toward achieving your E-commerce dreams.

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