Link Successfully Copied to Clipboard!
The Ecommerce Guide to Bookkeeping and Accounting
Legal & Tax
min read

Ready to take control of your e-commerce finances? Learn the basics of bookkeeping and accounting for your business from top to bottom in this helpful guide.

The Ecommerce Guide to Bookkeeping and Accounting
Julia Grant

April 21, 2022

Did you know that 60% of small business owners lack confidence in their finance and accounting situation? With the primary goal of most businesses being to generate a financial profit, this is a bit concerning. Getting your bookkeeping and accounting in order is essential to growing as a business - especially if you own e-commerce business.

GIF of a judge screaming "order!"
Source: Giphy

Accounting and Bookkeeping For Your E-commerce Business: Key Points to Consider in a Solution

Ecommerce businesses must be financially stable to succeed. Nevertheless, only 40% of small businesses are profitable and about ⅓ of businesses fail because of their cash flow. While good accounting certainly can’t fix a business with a bad product or a poor marketing plan, it can help keep a promising business on track.

GIF of a woman saying "my plan's actually working!"
Source: Giphy

Much of the time, business owners are not keeping well enough track of their finances (e.g. financial statements, an income statement, accrual accounting reports, inventory management, accounts receivable, cash basis accounting reports, financial transactions, sales tax reports, etc.) to know what their expenses are, be sure of their net profit, stay on track with taxes, and properly set aside the funds necessary to stay afloat. 

This is where accounting and bookkeeping come in. Professional accounting and bookkeeping are important for any business, but especially e-commerce businesses that are dealing with many transactions and unique financial conditions that require accounting expertise.

Why Are Bookkeeping & Accounting Important For E-commerce?

Bookkeeping and accounting are important for e-commerce because they…

  • Keep you informed about your financial health
  • Quickly detect overcharges and banking errors
  • Assist you in qualifying for loans
  • Help you maximize tax deductions
  • Ensure your tax payments are on time
  • Enable you to sell your business
  • Define your break-even point
  • Help you determine when you can go full time

All of these benefits cannot be overstated. Keeping proper track of your books and using professional accounting services will keep your business healthy and ready to grow. 

Not sure where to start? Here are a few tips to begin.

GIF of a newscaster on SNL  raising his hand saying "I have a tip!"
Source: Giphy
  • Keep personal and business finances separate. Too many small business owners forget to do this in the beginning, and things become messy very quickly. Open up a business bank account under the name of your DBA or LLC (depending on your current business structure) and get a business credit card for expenses. If you already have a personal PayPal, Stripe, or Square account, make a new one for your business if applicable. Any financial accounts or cards used by your business must be specific to your business. Do not mix and match.
  • Record everything. When in doubt, record it. You must record every expense and every income for your business - which is easier said than done. It’s easy to forget about that one late-night purchase or the receipt you accidently threw out from Walmart. A good way to avoid missing expenses is to take pictures of all your physical receipts and log them on your bookkeeping software. Save everything pertaining to your financial records for at least 3 years to stay safe in case of an audit. Digital records are great, but try to maintain as many physical records as possible too. 
  • Reconcile your accounts frequently. Reconciling is the process of comparing income to the outcome and closing out your books. This should be done on a regular basis (weekly, monthly, and quarterly) to ensure you aren't left with a mess to clean up. Create accurate financial reports (P&L statement, balance sheet, and cash flow statement are all critical reports to include here) on a monthly and quarterly basis.
  • Keep an accurate ledger. You will want to have a chart of accounts or ledger that tracks all your financial activity in one place. You should have a ledger for your business as a whole, but also keep sub-ledgers for specific categories of your business. These are typically organized on a “chart of accounts.”
  • Use a cloud service to start. When you begin, you may not have the budget to hire help. Use trustworthy accounting software or services like Quickbooks or Xero to manage your accounting. Stick with a brand-name service that professional accountants use (both Quickbooks and Xero fall in this category) to make it easy to onboard professional help in the future. 

Are Bookkeeping & Accounting the Same?

Bookkeeping and accounting are not the same, though these roles are frequently merged together and you can usually find a qualified individual or agency who handles them both. 

GIF of a woman in Victorian attire saying "please don't put us in the same category."
Source: Giphy

A bookkeeper records the day-to-day finances of your business. This includes your purchases, sales, and other business expenses. They help to keep you organized on a regular basis. 

An accountant takes the data that a bookkeeper collects and organizes and discerns what this data means for your business at large. An accountant can perform the tasks of a bookkeeper (and many times they do), but a bookkeeper cannot perform all the tasks of an accountant (unless they become certified). 

The bookkeeper organizes the data, while the accountant interprets the data. Bookkeepers don’t need to be certified but can be licensed through the American Institute of Professional Bookkeepers or the National Association of Certified Public Bookkeepers. Any accountant you deal with should be a CPA or a firm with CPAs on board. Many accountants will also handle bookkeeping.

A bookkeeper is less expensive than an accountant. When you start your business, you may be able to manage by hiring a bookkeeper occasionally to keep you organized. As you grow, however, it’s essential to have someone professionally managing both of these aspects of your business.

Do I Need to Hire Someone?

GIF of Sheldon from the Big Bang Theory emphatically saying "YES TO ALL!"
Source: Giphy

Yes - you should hire someone to handle your bookkeeping and accounting professionally. The data above suggests that most businesses are not confident in their financial situation and that most businesses do not succeed. While we would have to conduct an official study to verify that this relationship is causational and not correlational, the logic does seem to follow that perhaps businesses that do not take the proper steps to guard their financial health don't fare too well financially. 

Ecommerce accounting is complex and filled with uncertainties. You need to work with a professional to make sure you’re not missing anything. 

GIF of Jimmy Fallon showing one of his guests a huge list.
Source: Giphy

That being said, your ecommerce bookkeeping and accounting needs will differ as your business grows. If you are in the startup stage, and you’re not dealing with massive sales or expenses yet, you may not need a staff accountant. It is critical at this stage to start off with a well-organized system and keep things tidy - so consulting with a bookkeeper when you begin and on a monthly basis would be a good idea. If it’s in your budget, consult with an accountant or agency once a quarter, too.

As you grow, you will eventually need to hire an accountant or accounting agency, or a combination of them both (depending on your size). This will be critical to your continued success. The more that you can stay organized in the beginning stages, the easier it will be to onboard this person or agency in the future. 


E-commerce finance is difficult but necessary. If you want to make it in business, you need to keep your books in order and track your financial health professionally. EcomHub can help you do just that. Our accounting team consists of qualified CPAs with experience handling Amazon stores and other e-commerce businesses. We are currently accepting new clients, so shoot us a message and let us know what your business needs! 

Learn How To Build A Profitable Amazon Store
Stop putting off having your own profitable, thriving business backed by Amazon’s rapidly growing platform! Have our experts launch your store right alongside you.

No items found.
The Ecommerce Guide to Bookkeeping and Accounting

Julia Grant

Julia Grant is a copywriter specializing in e-commerce and small business, helping businesses expand their reach with copy that clearly communicates their message and converts. She is a certified translator and interpreter and prides herself on providing culturally relevant content in both English and Spanish.

See more posts from this author

More Articles

Stay connected

Get the latest curated e-commerce tips, tricks, and stories in your inbox every week.