Bookkeeping for ecommerce sellers, done every working day.

Why online sales are hard to match to the bank

A shop on a high street banks its takings. An online seller gets a single payout that might cover hundreds of orders, several days of trading and a mix of currencies. By the time it lands, the platform has taken its selling fees, payment fees, advertising charges, postage labels and refunds.

If the books only follow the bank, two things go wrong. Sales are recorded at the net payout, so turnover looks smaller than it is. And the costs taken off by the platform never appear at all. That makes the profit figure unreliable and can hide how close you are to the VAT registration threshold. Our job is to turn each payout back into its parts: the full sales, every deduction, and the amount that reached you.

Marketplace payouts from Amazon, eBay and Etsy

Each marketplace publishes a settlement or payment report for every payout. That report is the source document, not the bank line. We use it to post each payout in parts:

• Gross sales. The value of the orders, including any postage the customer paid, recorded as sales income.
• Selling and payment fees. Commission, transaction fees and listing fees, recorded as costs with the VAT shown on the marketplace's own invoice.
• Advertising and services. Promoted listings, sponsored ads, postage labels and fulfilment charges, each in its own cost category.
• Refunds and adjustments. Returns, partial refunds, reimbursements and reserve movements, kept separate so you can see what they cost.

The parts add up to the payout, so the bank line reconciles exactly. Where a marketplace holds money in reserve, or a payout covers part of two periods, we match it to the right reports and list anything that does not add up.

Shopify, Stripe and PayPal settlements

If you sell through your own website, the money usually comes through a payment provider rather than a marketplace. Shopify Payments, Stripe and PayPal all settle to your bank after deducting their fees, often a few days later and sometimes in combined batches.

We take the order report from your shop as the record of sales, then match each settlement back to the orders it covers. Payment fees are posted as a cost. That way your sales show the full amount customers paid, and you can see what card and wallet processing costs you each month.

PayPal and money held in a balance

PayPal often works like a second bank account. Money sits in the balance, gets spent on supplies or moved to the bank in round amounts. We treat it that way: the PayPal balance is reconciled to its own statement, and transfers to and from your bank are recorded as transfers, not as sales or costs. The same applies to Stripe or Shopify balances that are not paid out straight away.

Refunds, returns and chargebacks

Online sellers usually refund more often than other businesses. A refund can appear in a later payout than the original sale, sometimes in a different month. We record refunds against sales so the net figure is right, and keep them visible so you can track your return rate.

Chargebacks and disputes are recorded when the provider takes the money and again if it is returned. Fees on disputes are posted as costs. Anything that looks unusual is listed and asked about, rather than guessed.

Selling in other currencies, in general terms

Many sellers take payments in euros or dollars, or hold balances in other currencies on PayPal, Stripe or a marketplace. Your accounting software can record those amounts in the original currency and convert them to sterling. The difference between the rate on the sale and the rate when the money is converted is a gain or loss on exchange, and we post it as one.

For VAT, HMRC says amounts must always be expressed in sterling. By default, you use the UK market selling rate at the time of the supply. HMRC also lets businesses use its published period rates, and you cannot then change without HMRC's agreement. Which basis you use is your decision or your accountant's. We record it the same way every time once it is agreed.

VAT and online marketplaces, in general terms

These are general points from HMRC's guidance. Your own position may need specific advice.

• Registration. A UK business must register for VAT if its taxable turnover for the last 12 months goes over £90,000, or is expected to go over £90,000 in the next 30 days. Turnover means your full sales, not your payouts after fees.
• Overseas sellers. A business based outside the UK that supplies goods or services to the UK, or expects to in the next 30 days, must register regardless of turnover.
• Marketplace sales by overseas sellers. An online marketplace is liable for the VAT on goods of any value located in the UK at the point of sale when an overseas business sells them through it. It is also liable on goods outside the UK sold through it to customers in Great Britain where the consignment is worth £135 or less. Business sales where the customer gives a UK VAT registration number are treated differently, and Northern Ireland has its own rules. Where the marketplace accounts for the VAT, the sale is recorded differently.
• Records. VAT records must be kept for at least 6 years, and most VAT-registered businesses must keep some records digitally under Making Tax Digital.

Digital platforms also report information about many of their sellers to HMRC. HMRC's guidance excludes sellers who make fewer than 30 sales of goods in a year and receive 2,000 euros (approximately £1,700) or less. Daily bookkeeping means your own records already show the full picture, whatever a platform reports.

For more background, read our guides to VAT schemes, reclaiming VAT and keeping business records.

Stock, suppliers and other costs

Ecommerce costs come from many places: stock suppliers, packaging, couriers, software subscriptions and app charges billed monthly to a card. We record each supplier invoice with the right category and VAT rate, match card and bank payments to receipts, and follow up anything missing. With your permission, we monitor the finance inbox you agree with us, where many of these invoices arrive.

Stock purchases are posted as you buy them. If you need stock valued at the year end, your stock count or stock report gives the figure for your accountant to use.

Complex settlements get a scoped fixed quote

A seller with one shop and one payment provider is straightforward. A seller on several marketplaces, in several countries and currencies, with fulfilment services and large refund volumes, has more to reconcile. We look at your channels, your reports and how many payouts you receive before we quote. The fee is fixed for the scope we agree, with no hourly billing.

We work in Xero, QuickBooks, Sage, FreeAgent, Dext, VT Transaction+ and others. You keep your software and your subscription. See our Xero and QuickBooks pages for how we work in each.

What is included, and what is quoted separately

Every package covers the same daily work: bookkeeping every UK working day in your existing software, bank reconciliation and receipt matching, finance inbox monitoring, missing invoices and receipts followed up, and a monthly financial summary in plain English. Read more about bank reconciliation and daily versus monthly bookkeeping.

Some work sits outside the monthly packages and is quoted separately: catch-up bookkeeping on older payouts, tax returns, payroll and statutory filings.