Why online stores need different books
Payouts come in net of fees, refunds and shipping labels, sometimes from several platforms at once. Stock is bought ahead and sold over months. Sales tax depends on where your customers are. An online seller's bank deposits almost never equal their sales, and that's where the books go wrong.
What a bookkeeper for online stores keeps track of
- Each payout split into sales, refunds and platform fees
- Stock bought and the cost of what sold
- Sales tax or GST/HST by where customers are
- Shipping and packaging costs
- Ad spend by platform
In the US
- Once your sales into another state pass its threshold (often $100,000 a year), you may owe that state's sales tax. Marketplaces like Amazon, Etsy and eBay collect it for sales made on them.
- Payment platforms send a 1099-K once you pass $20,000 and 200 sales in a year.
- Stock you haven't sold yet isn't a cost until it sells.
In Canada
- GST/HST is charged at the rate of the province your customer is in, not yours.
- Marketplaces collect GST/HST for sellers who aren't registered; once you register, you charge it yourself.
- Sales to customers outside Canada are usually zero-rated.
What SumSwift does for online sellers
- Connects to WooCommerce, Wix, Squarespace and PayPal today, with Shopify, Amazon, Etsy and eBay coming, and reads Shopify, Square and Amazon export files
- Each payout split into sales, refunds, tax and fees, so deposits match sales
- Sales tax or GST/HST worked out by where each customer is
- Stock kept item by item, first in first out or average cost, with cost of goods sold each month
- Receipts snapped with your phone or forwarded by email are read and matched to the charge
- Every statement checked against the balances your bank printed, to the cent, with personal spending kept off your profit