Struggling to reconcile thousands of daily e-commerce transactions from platforms like Shopify, Amazon, and Square? You’re not alone. For CPAs, the surge in e-commerce has transformed accounting into a complex maze. Gross sales don’t match bank deposits, fees are vaguely labeled, and sales tax spans multiple states and cities.
“Everything has moved to net deposits,” explains Jason Richelson, CEO of Bookkeep, in a recent Earmark Expo. “It used to be that gross sales plus sales tax equaled your deposit the next day. Now, everything is net of fees, and it’s becoming increasingly complicated.”
As e-commerce continues to dominate retail, CPAs face an evolving ecosystem of platforms and payment systems. To navigate this complexity and deliver value to clients, they must embrace cutting-edge accounting technologies that offer automated reconciliation, real-time reporting, and multi-channel integration.
This article explores the key challenges of modern e-commerce accounting and how innovative technologies are revolutionizing the field, transforming CPAs into strategic advisors.
The Complex Landscape of E-Commerce Accounting
Gone are the days when retail accounting meant simply reconciling a cash register with a bank statement. The rise of e-commerce has introduced new challenges for CPAs.
“We had about 50 clients,” Jason recalls. “We started developing software, thinking people could handle it manually. They do it manually, but I’m surprised that six years later, they just can’t find people to do this.”
The core problem lies in the shift to net deposits. “It used to be that in your POS, your gross sales plus sales tax equaled the credit card deposits you received the next day,” Jason explains. “But now, businesses receive net deposits—the gross amount minus various fees and adjustments.”
Consider a client using Shopify for online sales, Square for in-person transactions, and selling on Amazon as well. Each platform has its reporting system, fee structure, and payout schedule. Amazon pays out every two weeks, so Christmas sales might not hit the bank account until January.
The complexity compounds with cross-platform sales. A business using Shopify might also sell through Facebook and Instagram. While Shopify shows total sales, including sales tax, the actual deposit might not include that sales tax if Facebook pays it directly. Without specialized tools, a CPA might mistakenly think the business failed to collect sales tax.
“A lot of people just record deposits as income,” Jason notes, “because they’re overwhelmed or don’t have access to detailed data. But we book your sales summary and then your payout deposits separately.”
Innovative Solutions in E-Commerce Accounting
As the e-commerce landscape grows more complex, innovative technologies are emerging to meet the challenge. Specialized accounting software revolutionizes how CPAs manage multi-channel sales, reconciliations, and reporting.
One key feature of Bookkeep is automated reconciliation. “We post summary sales information daily, typically on an accrual basis when the transaction occurs or when it is fulfilled,” Jason explains. This approach allows for accurate, real-time sales tracking across multiple platforms, regardless of when the actual payout occurs. It solves the Amazon payout delay by recording sales when they happen, not when the deposit is received weeks later.
Another crucial aspect is the separation of sales data from payout deposits. This separation allows for clearer tracking of actual sales versus received funds, solving the net deposit problem that plagues many e-commerce businesses. CPAs can now easily reconcile gross sales with net deposits, identifying fees and adjustments.
These systems also offer detailed breakdowns of fees and adjustments. “All the data we post to your accounting platform, we also provide spreadsheets with all the backup data,” Jason says. This level of detail allows CPAs to quickly identify and resolve discrepancies, saving countless hours of manual reconciliation work.
Multi-channel integration is another key feature. Bookkeep handles data from Square, Shopify, PayPal, Amazon, and more, consolidating information from multiple sales channels into a single, coherent financial picture. This integration extends to sales tax management as well. “We will file and pay your sales tax for you, and we do it through Avalara,” Jason explains, addressing the complex issue of multi-jurisdictional sales tax compliance.
These tools are adaptable to the rapidly changing e-commerce landscape. When e-commerce platforms introduce new features or payment methods, the software updates to accommodate them, ensuring CPAs always have accurate, up-to-date information.
The Evolving Role of CPAs in E-Commerce
Innovative technologies are not just making CPAs’ jobs easier—they’re reshaping the role of accountants in the e-commerce era. The focus is shifting from data entry to strategic advisory.
“We’re here to help you understand the data coming through,” Jason explains. “That’s really where accounting is going—it’s about data flows and proper categorization.” This shift means CPAs need to develop new skills and knowledge to thrive.
Understanding the intricacies of various e-commerce platforms is essential. “Shopify moves very fast. Square is also providing great tools. TikTok is coming onto Shopify as well,” Jason notes. CPAs need to stay current with these developments to provide accurate advice and ensure proper accounting treatment.
Sales tax complexity presents another opportunity. With Bookkeep’s integration with Avalara, CPAs can offer comprehensive sales tax management services. “Nobody inside these e-commerce businesses wants to learn that stuff,” Jason says. By mastering these tools, CPAs become indispensable advisors, helping clients navigate multi-jurisdictional sales tax requirements.
Some CPAs might worry that these technologies could replace their roles. However, the reality is that these tools free CPAs from tedious tasks, allowing them to focus on higher-value activities. CPAs can offer strategic insights into cash flow management, profitability analysis, and growth strategies by interpreting the detailed data these systems provide.
Embracing the Future of E-Commerce Accounting
E-commerce accounting is evolving rapidly, but CPAs can turn these challenges into opportunities with the right tools and mindset. You can stay ahead in this digital era by embracing innovative technologies and focusing on strategic advisory.
To better understand these cutting-edge solutions and how they can transform your practice, we encourage you to watch the on-demand webinar featuring Jason Richelson’s insights on the evolution of e-commerce accounting. You’ll learn about the latest trends in e-commerce platforms, discover how to leverage automated reconciliation tools, and gain strategies for positioning yourself as a valuable advisor to e-commerce clients.