Accounting Built for Ecommerce
Most accounting advice assumes you invoice a client and they pay you. Ecommerce doesn't work like that. You sell fifty orders a day at different prices, a courier holds your cash for three weeks, a fifth of it comes back as returns, and the number that lands in your bank account bears no obvious relationship to the number on your Shopify dashboard.
We do the books for online retailers, and we do them in a way that answers the questions online retailers actually have.
Four places ecommerce books usually break
Your Shopify revenue is not your bank deposit
Shopify reports gross sales. Your bank receives sales minus payment gateway fees, minus refunds processed in that window, minus chargebacks, batched into payouts that don't line up with any calendar period. We reconcile every payout back to the orders inside it, so gross sales, fees and refunds each sit in their own account and your revenue figure is the real one.
Cash on delivery hides your cash
If you sell COD, the money is real long before it is yours. Between the customer taking the parcel and the settlement landing, that money is a receivable, and most COD sellers aren't tracking it as one. We set up a goods-in-transit receivable, age it, and reconcile each courier settlement against the orders it covers.
Returns are a cost you probably aren't measuring
A twenty per cent return rate is not unusual in fashion and footwear. Every return carries a forward delivery charge, a return delivery charge, handling, and stock that may or may not be resaleable. Booked properly, returns become a number — by product, by courier, by reason — that tells you whether a line is worth stocking.
You know your total margin, not your product margin
Total gross margin hides the picture: the products carrying the business subsidise the ones bleeding it, and both look fine in aggregate. Once cost of goods, delivery cost and return cost are landed against the right products, the picture separates — often uncomfortable, always useful.
Six things that make ecommerce books reliable
- Cloud accounting setup. A chart of accounts built for ecommerce rather than a generic template — separate accounts for gateway fees, courier charges, return costs, goods in transit and inventory. Opening balances and inventory migrated properly.
- Weekly revenue reconciliation. Shopify orders against gateway payouts and courier settlements, every week, so discrepancies surface while they're still traceable.
- COD and courier audit. Settlements checked against orders, delivery and return charges verified against your rate card, shortfalls flagged.
- Inventory and cost of goods. Stock valued correctly, cost of goods recognised in the right period, so your gross margin means something.
- Monthly financial statements. P&L, balance sheet and cash flow by the tenth of the following month, with commentary that explains what moved and why.
- Product-level profitability. Margin by product line, after delivery and returns.
We work in Xero and other cloud platforms and connect directly to Shopify, so this runs on your existing stack. No migration to our software, because we don't have any.
Online retailers past the point the spreadsheet coped
Typically somewhere between the point where you hire your first employee and the point where you hire your first accountant. Recent work includes a footwear brand on Shopify selling across card, bank transfer and cash on delivery, and a personal-care retailer whose entire finance function was a cash-basis Excel file. Both had the same underlying problem: real revenue, real growth, and no reliable way to see either. We work with businesses in the US, the UK, Canada and Pakistan — the mechanics of Shopify, couriers and returns are much the same wherever you sell, only the tax layer changes.
Usually with a diagnostic
We take three months of your data — Shopify exports, bank statements, courier settlements, whatever inventory records exist — and come back with what your books currently say, what they should say, and the gap between them. From there it's either a one-time cleanup and setup, or an ongoing monthly engagement, depending on what the diagnostic finds. We'll tell you which one you need, including when the answer is that you don't need us yet.
What you're probably wondering
No. We connect to what you already run.
It's the normal starting point. The diagnostic exists precisely to tell us how much cleanup is involved before we quote anything ongoing.
Once setup is complete, statements land by the tenth of the following month.