Running an online store can feel exciting and frightening at the same time. Money comes in from many places. Fees and refunds go out fast. You might worry that one missed number could tear through your profits. This guide on accounting for e commerce helps you steady that chaos. You learn how to track sales, fees, taxes, and inventory in clear steps. You see how to read your numbers so you can stop guessing and start deciding. You also find when it makes sense to handle the books yourself and when to look for outside help, including small business accounting services . Careful accounting protects you from surprise tax bills. It shields you from cash shortages. It also shows you which products keep your store alive and which drain it. When you understand your numbers, you protect your work, your time, and your peace.
Know what money comes in and what goes out
You first need a clear picture of every dollar that moves through your store. You track three simple groups.
- Money that comes in from sales
- Money that goes out for costs and fees
- Money you keep in profit and cash
Sales can come from your website, online marketplaces, and in person events. Each place may have its own fees. You record the full sale price and then record fees and discounts as separate lines. That way you see what you earn and what you pay to payment processors and platforms.
The U.S. Small Business Administration explains that good records support better decisions and easier loans. You can read more in the SBA guide on record keeping at sba.gov.
Set up clean books from day one
You need one place where you keep your numbers. That can be simple software, a spreadsheet, or a paid tool. The key is that you use it the same way every time.
Create a basic chart of accounts with three groups.
- Income. Online sales, shipping income, other income
- Costs. Product costs, shipping costs, payment fees, ads, software, returns
- Equity. Owner pay, retained earnings
Use separate business bank and credit card accounts. Never mix store money with household money. You then connect your accounts to your software so downloads happen each day or each week. You review every line and tag it to the right income or cost group.
Track sales, refunds, and fees by channel
Each sales channel has its own pattern. You need to see them side by side. That helps you spot where you earn real profit.
Example monthly comparison by sales channel
You see that gross sales do not tell the full story. Net revenue after refunds and fees shows the truth. You can then decide where to focus your time and ads.
Understand product costs and profit
Next you match income to the cost of the products you sell. That cost includes what you pay for the product plus packaging and shipping that you cover. When you track this, you find your gross profit for each product and each order.
Use a simple three step routine.
- Record the cost for each product unit
- Update the cost when suppliers change prices
- Run a monthly report of sales and product costs
If a product sells often but leaves thin profit, you either raise the price, cut costs, or drop it. This protects your store from quiet loss.
Handle sales tax and other taxes
Online sales tax rules can feel heavy. You do not need to master every rule at once. You do need a basic plan.
- Know where you have to collect sales tax based on your sales and presence
- Turn on correct tax settings in each sales platform
- Set up a separate account where you move tax money each month
Sales tax you collect is not your money. You hold it until you send it to the state. Moving that money into a separate account guards you from spending it by mistake.
The Internal Revenue Service shares guidance for small online sellers on record keeping and income tax. You can review it at irs.gov.
Watch cash flow every week
Profit on paper does not always mean cash in your account. Payment delays, large inventory buys, and tax payments can squeeze you. A short weekly cash check keeps you safe.
Use this three line review.
- Cash on hand today
- Expected cash in this week from payouts and sales
- Planned cash out this week for suppliers, ads, tools, and pay
If cash out is higher than cash in, you act early. You can slow stock orders, cut ad spend, or run a short sale. You do not wait until your card declines.
Choose when to seek outside help
You do not need to do everything alone. Some signs show it is time for help.
- You spend more than a few hours each week on books
- You feel unsure about tax rules
- Your store grows fast and you add channels or staff
You can start with a bookkeeper who keeps your records clean. You can also use an accountant for tax filing and planning. Good help does more than fill out forms. It gives you clear reports so you can steer your store with less fear.
Turn your numbers into clear choices
Accounting is not about perfect spreadsheets. It is about clear choices. When you track sales by channel, match product costs, set aside tax, and watch cash, you gain control. You can decide which products to grow, which ads to cut, and when you can safely pay yourself more. That calm control is how your online store supports you and your family for a long time.
