E-commerce
Your marketplace deposit is not your revenue. We break apart the fees, track inventory costs per unit, and show you which products actually make money.
The Industry
E-commerce looks simple from the outside. You sell products online, money shows up in your bank account. But that deposit from Amazon or Shopify is not your revenue. It is a net number after referral fees, fulfillment charges, storage fees, advertising costs, returns, and sometimes promotional credits have all been deducted. A $16,000 payout might represent $24,000 in actual sales. The $8,000 difference is spread across a dozen fee categories buried in a settlement report that most sellers never fully unpack. Without breaking that apart, your financial statements are missing half the story.
Inventory adds another layer. You are buying product weeks or months before it sells. The true cost of a unit includes the product itself, shipping from the manufacturer, customs duties if you are importing, and freight to the fulfillment center. All of that has to be captured into your per-unit cost so that when the product sells, your cost of goods sold is accurate. Get that wrong and your margins are fiction. Add multiple sales channels with different fee structures and payout timing, and the accounting gets complicated fast for what seems like a straightforward business model.
Who This Covers
Who This Covers
Amazon FBA sellers, Shopify store owners, Etsy sellers, dropshippers, direct-to-consumer brands, and multi-channel retailers. Anyone selling products online through one or more platforms in the Phoenix area and beyond.
What Makes It Complicated
What Makes It Complicated
Platform fees buried inside settlement reports that bundle dozens of line items into a single deposit. Inventory purchased months before it generates revenue. Advertising costs spread across Amazon PPC, Facebook, and Google. Returns that affect both revenue and inventory simultaneously. Multi-state sales tax obligations triggered by economic nexus thresholds.
What We Handle
We start by reconciling your marketplace settlement reports so that QuickBooks reflects your actual gross revenue, not just the deposit. Every fee category gets broken out. Referral fees, FBA fulfillment, storage charges, advertising spend, return processing. When you look at your profit and loss statement, you can see exactly where the money went between what customers paid and what landed in your bank account. This matters because you cannot reduce costs you are not tracking. We configure QuickBooks Online to handle multi-channel selling so each platform’s activity is clear and your books are not a jumble of net deposits with no context.
Inventory accounting gets set up properly from the start. We track your landing costs so each unit carries its true cost on the balance sheet until it sells. Cost of goods sold hits the books when revenue is recognized, not when you pay the manufacturer. This gives you accurate monthly margins instead of wild swings driven by when you happen to place purchase orders. For sellers with more complex operations, we provide cash flow forecasting that accounts for inventory lead times and platform payout schedules so you know when cash is tight before it becomes a problem.
Platform Reconciliation and Fee Tracking
Platform Reconciliation and Fee Tracking
Settlement reports from Amazon, Shopify, and other channels broken apart into gross revenue, fees by type, returns, and advertising. Each category mapped to the correct account in QuickBooks. Payouts matched to actual sales activity so nothing falls through the cracks between what the platform reports and what hits your bank.
Inventory Costing and Product Margins
Inventory Costing and Product Margins
Landing costs tracked per product including supplier cost, shipping, duties, and freight. Inventory held on the balance sheet and moved to cost of goods sold as units sell. Product-level profitability that shows which items generate real margin after all fees, advertising, and fulfillment costs. Year-end inventory valuations prepared accurately for tax filing.
What Goes Wrong
The most common mistake is recording the marketplace deposit as revenue. When Amazon sends $12,000, that becomes the top line. But actual sales were $18,000 and the difference went to referral fees, FBA charges, storage, returns, and ad spend. The profit number might end up roughly the same, but your financial statements understate both revenue and expenses. You lose all visibility into your cost structure. You cannot tell whether your fees are 28% or 38% of sales because you never tracked them separately. You cannot evaluate whether your advertising is generating a return because the spend is netted out before you ever see it. The numbers technically balance, but they tell you nothing useful.
Inventory is the other problem area. Many sellers expense the full purchase when they pay the supplier. A $30,000 inventory order hits in March, making that month look like a disaster. Then units sell over the next five months with no associated cost, making those months look unrealistically profitable. The profit and loss statement becomes useless for understanding actual monthly performance. At year end, the books show the wrong amount of inventory on hand, which means cost of goods sold on the tax return is wrong. You either overpay in taxes or create a discrepancy that will need to be corrected later.
Net Deposits Hiding the Real Numbers
Net Deposits Hiding the Real Numbers
Platform fees, returns, and ad spend disappear into a single net deposit. Financial statements miss the actual revenue and the actual cost structure. You have no way to evaluate fee percentages, compare advertising performance across channels, or identify which cost categories are growing. Decisions get made on gut feeling because the books do not give you anything to work with.
Inventory Timing That Distorts Everything
Inventory Timing That Distorts Everything
Expensing inventory at purchase instead of when units sell creates months that swing from massive losses to unrealistic profits. The pattern has nothing to do with business performance and everything to do with when purchase orders were placed. Year-end inventory counts do not match the books. Tax returns carry incorrect cost of goods sold because unsold inventory was never properly held on the balance sheet.
What Changes
Every product shows its true margin after platform fees, fulfillment costs, advertising, and returns. You can look at a SKU and know whether it is making money or just generating activity. The decision to reorder, discontinue, or increase ad spend on a product is based on real profitability data instead of guesswork. When a product looks like a bestseller by volume but barely breaks even after Amazon fees and advertising, you find out before you order another 2,000 units.
Monthly financial statements reflect what actually happened that month. Cost of goods sold matches the units that were sold, not the timing of purchase orders. Revenue is gross, with every fee category visible beneath it. Your tax preparer receives books with properly valued inventory, accurate cost of goods sold, and platform fees already categorized. The conversation moves from cleaning up the numbers to finding ways to reduce your tax burden. And if you need financing to scale inventory, your financial statements show a lender a business they can understand and trust.
Product-Level Decisions Based on Data
Product-Level Decisions Based on Data
SKU profitability reveals which products drive the business and which ones consume resources without contributing real margin. Advertising spend gets directed toward products where the return justifies it. Inventory purchasing is planned around items that generate profit, not just revenue. You stop scaling products that look busy but do not actually make money.
Books That Support Growth
Books That Support Growth
Financial statements a lender or investor can review without confusion. Tax returns with accurate cost of goods sold and properly valued inventory. Monthly reporting that shows real trends instead of numbers distorted by purchase order timing or payout delays. A clear financial picture that lets you make decisions about new products, new channels, and bigger inventory orders with confidence.
Bookkeeping for East Valley Small Businesses
The Next Step:
Tell Us About Your Business
Let us know where things stand with your books and what kind of help you're looking for. We'll give you an honest assessment and a clear price.
