Why QuickBooks for e-commerce?
QuickBooks Online is the most popular accounting software for small businesses, and for good reason. It's affordable, your accountant or CPA almost certainly knows it, and it has a large ecosystem of integrations. For e-commerce sellers specifically, QuickBooks handles the fundamentals well: tracking income, expenses, profit margins, and tax preparation.
But e-commerce bookkeeping is different from a traditional business. You don't just have one revenue stream. You have Amazon deposits, Shopify payouts, Etsy payments, eBay managed payments, and possibly PayPal and Stripe transactions. Each platform deducts fees before paying you, and those fees need to be tracked separately from your revenue.
Without proper setup, your QuickBooks will be a mess. Revenue won't match what your platforms show. Fees will be buried in the wrong categories. Inventory costs won't tie out. And tax time will be a nightmare.
This guide walks you through the right way to set up QuickBooks for multichannel e-commerce.
Setting up your chart of accounts
Your chart of accounts is the foundation of your bookkeeping. Getting it right from the start saves hours of cleanup later. Here's a recommended structure for multichannel sellers.
Income accounts
Create separate income accounts for each sales channel. This lets you see at a glance how much revenue each platform generates.
- Product Sales - Amazon
- Product Sales - Shopify
- Product Sales - Etsy
- Product Sales - eBay
- Product Sales - Other (for any additional channels)
- Shipping Income (if you charge customers for shipping)
Expense accounts for platform fees
Each platform charges different fees. Track them separately so you can see exactly what each channel costs you.
- Amazon Fees (referral fees, FBA fees, storage fees)
- Shopify Fees (subscription, transaction fees, app fees)
- Etsy Fees (listing fees, transaction fees, payment processing)
- eBay Fees (final value fees, store subscription)
- Payment Processing Fees (Stripe, PayPal, for non-marketplace transactions)
Cost of goods sold (COGS)
- Product Costs (wholesale cost of items sold)
- Shipping Costs (postage, labels, packaging materials)
- Fulfillment Costs (3PL fees, FBA fulfillment fees if tracked here)
Other key expense categories
- Advertising (Amazon PPC, Facebook ads, Google ads, per-platform if significant)
- Software & Subscriptions (inventory management, email marketing, design tools)
- Supplies & Packaging
- Returns & Refunds
You want enough detail to make informed business decisions, but not so many accounts that categorizing every transaction becomes a chore. Five to eight income accounts and ten to fifteen expense accounts is typical for a multichannel seller. You can always add more later if you need finer detail.
Connecting your sales channels
The biggest time sink in e-commerce bookkeeping is getting data from your sales channels into QuickBooks. There are three approaches, from most manual to most automated.
Option 1: Bank feed + manual categorization
Connect your bank account to QuickBooks. As deposits arrive from Amazon, Shopify, and other platforms, categorize them manually. This works but requires you to break out gross sales, fees, and refunds from each deposit, which the bank feed alone doesn't do.
Option 2: Integration apps
Apps like A2X, Link My Books, or Webgility connect directly to your sales platforms and create proper journal entries in QuickBooks. They break each platform payout into its components (gross sales, fees, refunds, shipping, tax collected) and post them to the correct accounts.
This is the recommended approach for most sellers. A2X is especially popular and handles Amazon, Shopify, Etsy, eBay, and Walmart. It costs $19-79/month per channel but saves hours of manual work and produces much cleaner books.
Option 3: Custom integration
Larger sellers sometimes build custom integrations using QuickBooks API. This is only worthwhile if you have very specific needs that the off-the-shelf apps don't handle.
Bank feed vs integration apps
| Method | Accuracy | Time Required | Cost |
|---|---|---|---|
| Bank feed only | Low (net deposits only) | 2-4 hrs/month | Free |
| Bank feed + manual breakout | Medium | 4-8 hrs/month | Free |
| Integration app (A2X, etc.) | High (line-item detail) | 30 min/month | $19-79/channel |
If you're selling on more than one platform, an integration app pays for itself in time saved within the first month. If you have a bookkeeper, it saves them time too (and potentially saves you money on their fees).
Reconciliation for multi-platform sellers
Reconciliation is the process of matching what your platforms report with what actually hits your bank account. For multichannel sellers, this is where bookkeeping gets tricky.
Why platform payouts don't match gross sales
When Amazon sends you a deposit, it's not your gross sales. It's gross sales minus referral fees, minus FBA fees, minus refunds, minus advertising costs, plus any reimbursements. The same applies to every platform. Shopify deposits are gross sales minus transaction fees minus refunds.
If you just record the bank deposit as "sales," your revenue is understated and your expenses are invisible. You won't know your true profit margins, and your tax reporting will be wrong.
The reconciliation process
- Match each platform payout to the corresponding period's sales. Amazon pays every two weeks. Shopify pays daily or weekly. Each payout corresponds to a specific set of orders.
- Break out the components. For each payout, identify gross sales, fees deducted, refunds issued, tax collected (if applicable), and any other adjustments.
- Post the journal entry. Debit your bank account for the deposit amount. Credit sales for the gross revenue. Debit fee accounts for the platform charges. Debit refund accounts for refunds.
- Reconcile to the bank statement. At month end, make sure your QuickBooks bank balance matches your actual bank balance.
If you use an integration app like A2X, steps 1-3 happen automatically. You just need to do the monthly bank reconciliation (step 4), which QuickBooks makes straightforward.
Handling sales tax in QuickBooks
Sales tax collected is not your income. It's a liability (money you owe to the state). Set up a Sales Tax Payable liability account in QuickBooks. When you collect tax, it goes into this account. When you remit tax to the state, it comes out. If you use TaxJar for automatic filing, the payments to states should match the decreases in your Sales Tax Payable account.
Tracking cost of goods sold
Knowing your true profit requires accurate COGS tracking. This is one of the areas where e-commerce sellers struggle most in QuickBooks.
What counts as COGS
Cost of goods sold includes everything directly related to producing or acquiring the items you sell:
- Wholesale product cost (what you paid your supplier)
- Inbound freight (shipping from supplier to your warehouse)
- Customs and duties (for imported goods)
- Direct labor (for handmade products)
- Raw materials (for manufactured goods)
COGS does not include shipping to the customer, platform fees, advertising, or general overhead. Those are operating expenses.
COGS tracking methods
Simple method (good for most sellers): Track your total inventory purchases and your ending inventory value. COGS = Beginning Inventory + Purchases - Ending Inventory. Update monthly or quarterly. This is the approach most small e-commerce businesses use.
Per-unit method (more precise): Track the cost of each SKU and record COGS for every sale. This gives you product-level profitability data. QuickBooks doesn't do this natively, but inventory management tools (like Commerce Kitty) can track per-unit costs and sync that data to your books.
Inventory valuation
QuickBooks Online supports FIFO (first in, first out) inventory valuation. This means the cost of your oldest inventory is recorded as COGS first. For most e-commerce sellers, FIFO is the appropriate method and is what your CPA will likely recommend.
Common bookkeeping mistakes to avoid
Recording net deposits as revenue
If Amazon deposits $8,500 and you record that as sales, you're wrong. Your actual sales were $10,000, and Amazon deducted $1,500 in fees. Your books understate revenue and hide your true fee burden. Always record gross sales and fees separately.
Mixing personal and business transactions
Use a dedicated business bank account and credit card. Mixing personal expenses with business transactions makes reconciliation difficult and creates headaches at tax time.
Ignoring inventory until tax time
If you don't track inventory costs during the year, you'll scramble to calculate COGS at tax time. Set up your COGS tracking from day one. Even the simple method (tracking purchases monthly) is better than ignoring it.
Not reconciling monthly
Reconcile your bank account every month. If you wait until year-end, finding and fixing discrepancies is exponentially harder. Set a recurring reminder for the first week of each month.
Treating sales tax collected as income
Sales tax you collect from customers is not your money. It's held in trust for the state. Record it as a liability, not as revenue. When you remit it, the liability decreases. If you record tax collected as income, you'll overstate your revenue and potentially overpay income tax.
Frequently asked questions
Which QuickBooks plan is best for e-commerce sellers?
Do I need an integration app like A2X?
How do I handle Amazon FBA fees in QuickBooks?
Should I track inventory in QuickBooks or separately?
For sales tax specifically, read our guides on setting up sales tax for online sellers and using TaxJar for multichannel sellers.