Key takeaways
What this article covers, in order:
- The chart of accounts for an online store
- The 3 entries an online store gets wrong
- What an online store can claim
- The reports to run every month
- Frequently asked questions
- Where to go next
A marketplace pays you a fortnightly lump that is sales minus commission minus advertising minus refunds minus a reserve. One deposit, six different ledger entries. Book it as revenue and every margin number you have is wrong.
This is the bookkeeping side of that problem: the accounts to set up, the entries that go wrong, and what you can claim. If you are still choosing software, the round-up linked at the end compares the options.
The chart of accounts for an online store
Start from these rather than the default template. The codes are illustrative; the separations are what matter, because each one answers a question you will be asked later.
1200 Inventory at landed cost
1210 Inventory in transit
1220 Stock held at fulfilment centres
1130 Marketplace settlement receivable
4000 Online sales — gross
4100 Refunds and returns — contra
5000 Cost of goods sold
6400 Marketplace commission and advertisingThe 3 entries an online store gets wrong
A marketplace payout
Split it: gross sales, commission, advertising, refunds, reserve movement. One revenue line understates sales and hides every fee you pay.
Inbound freight and duty
Part of landed cost in inventory, not a period expense. Expensed, gross margin looks better than it is on every unit.
A customer return
Reverse the sale and put the stock back at cost — and only if it is resaleable. Netting refunds against sales loses the return rate, which is the number that tells you the listing is wrong.
What an online store can claim
Deductibility follows the rule in your own jurisdiction, so this is a checklist to take to your accountant rather than an answer. For an online store the cost lines to review first, and the record each one needs, are:
| Cost line | The record to keep |
|---|---|
| Cost of goods sold | The invoice, and the business-use split where the cost is shared |
| Marketplace commission and advertising | The invoice, and the business-use split where the cost is shared |
Whether each of those is deductible, and how much of it, is a rule your tax authority sets and changes. Keep the record either way; take the question to your accountant with the figures in front of you.
The reports to run every month
- Marketplace settlement broken into gross sales, fees, advertising, refunds and reserves — review it monthly, not at year end.
- Landed cost per SKU, including freight and duty, not just the supplier invoice — review it monthly, not at year end.
- Sales tax or VAT by destination, including marketplace-facilitator rules — review it monthly, not at year end.
- Refunds, chargebacks and returned stock put back at the right value — review it monthly, not at year end.
Frequently asked questions
What is the best accounting software for ecommerce?
There is no single best one; there is a best one for a shape of business. For an online store, work down the criteria in the section above and stop at the first option that clears all of them — that list is short, usually two or three.
The criteria that eliminate most options fastest are: Marketplace settlement broken into gross sales, fees, advertising, refunds and reserves; Landed cost per SKU, including freight and duty, not just the supplier invoice; Sales tax or VAT by destination, including marketplace-facilitator rules.
Give me a list of accounting software for ecommerce that offer the best security?
Ask for evidence rather than adjectives. The things worth checking, in order: an independent audit you can see (SOC 2 Type II or ISO 27001, with the report date), encryption in transit and at rest, enforced multi-factor authentication, role-based permissions fine enough that a bookkeeper cannot export your whole ledger, an immutable audit trail of who changed what, where your data is hosted and under which country's law, and a stated backup and recovery position.
Then ask the question the brochure will not answer: can you see, after the fact, who changed a figure and what it was before? For an online store that audit trail is worth more than any single feature on the security page. A vendor who will send the audit report under NDA is telling you something; one who answers with the words "bank-grade security" is telling you something too.
Is there free accounting software for ecommerce?
There are free tiers, and they are real — but the limit is what matters, not the price. Find the cap before you move your books: how many documents or transactions a month, how many bank accounts, how many users, and whether the free tier includes the one thing you came for. HelloBooks has a free plan; /pricing lists what it covers today.
How much does accounting software for ecommerce cost?
Published prices move, and the figure that matters is the one including the module you actually need — inventory, payroll or multi-currency are often a tier up, so the headline price is rarely the price you pay. Price each shortlisted option at the tier that carries what you actually need, on the vendor's own page, on the day you decide.
How do I switch accounting software without losing my history?
Migrate on a period boundary and bring three things: opening trial balance, open customer and supplier balances, and your chart of accounts. Transaction history can usually stay in the old system as a read-only archive — attempting to re-import years of detail is where most migrations lose a week and a reconciliation.
Where to go next
- HelloBooks for ecommerce
- HelloBooks in the United States
- HelloBooks pricing and what each plan includes
This guide is written for businesses in the US, UK, Canada, Australia, New Zealand and Singapore. Tax treatment differs by country — check the rule for yours before you act on it.
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