How to Simplify Ecommerce Bookkeeping in 2025

Most sellers don’t start their online businesses with ecommerce bookkeeping in mind, but it quickly becomes essential for sustainable growth. In fact, 60% of small businesses struggle with cash flow management. Without accurate records, financial mismanagement can lead to missed opportunities or, worse, legal risks. What can be done to avoid these?

Manual bookkeeping can only go so far. It is prone to errors, delays, and discrepancies, which affect tax filings and financial planning. As transaction volumes grow, these inefficiencies compound.

Ecommerce bookkeeping software, on the other hand, tracks every transaction, updates records automatically, and generates precise financial reports.

In this article, we’ll explore why traditional bookkeeping methods fall short, the key benefits of automation, and how the right software can simplify financial management. By the end, you’ll have a clear understanding of how to maintain accurate records and keep your business financially healthy.

Understanding ecommerce bookkeeping

Ecommerce bookkeeping is the process of recording, tracking, and managing financial data specific to online businesses.

It includes:

• Sales per platform: Logs revenue from Shopify, Amazon, Etsy, etc., with order-level details.
• Transaction fees: Tracks payment processor fees from Stripe, PayPal, and marketplaces.
• Inventory costs: Records product costs, shipping, and storage expenses.
• Sales tax compliance: Calculates and files state, local, and international tax obligations.
• Bank reconciliation: Matches payouts from platforms with actual deposits, flagging discrepancies.

Bookkeeping follows a standard structure. It includes assets, liabilities, equity, income, and expenses. However, for ecommerce businesses, the breakdown and tools required differ significantly. The nature of online transactions, sales channels, and inventory systems introduces unique challenges.

Let’s discuss this in detail in the next section.

How ecommerce bookkeeping differs from traditional accounting

What most consider bookkeeping for ecommerce is often just basic accounting tied to an online store. However, in reality, it requires specialized tracking of multi-channel sales, region-specific taxes, and complex inventory management.

Here’s a quick comparison to help you understand the differences better:

While traditional bookkeeping systems handle basic financials, they struggle with the volume and complexity of ecommerce transactions. Automated bookkeeping solutions for ecommerce offer real-time data synchronization across multiple sales platforms, accurate sales tax calculations, and simplified reporting.

Best practices for ecommerce bookkeeping in 2025

Accurate bookkeeping is essential for ecommerce businesses to avoid tax issues and track profits. Adopting a few key practices will help you maintain organized finances, save time, and avoid costly mistakes.

Below are six essential habits for keeping your books in order.

Regular reconciliation of accounts

Keeping track of every transaction is a huge task. But if you skip regular reconciliations, you will end up with a mess. It’s tempting to think you can do it once a quarter or just when you feel like it, but consistency is key. Try doing daily or weekly reconciliations. This will help you spot discrepancies early. 

Ecommerce bookkeeping tools make this way easier. They sync bank feeds with your transaction records, cutting down on manual work and potential errors. Plus, automated bank rules can quickly match transactions to predefined categories, allowing you to allocate payments to the correct expense accounts without much manual effort. 

Maintaining organized financial records

Without a structured system, receipts pile up, transactions go untracked, and financial reports become unreliable. Digital record-keeping solves these problems by providing a secure, accessible, and efficient way to manage financial data.

Cloud-based systems give you real-time access to your financial records from anywhere. This is especially essential for ecommerce businesses handling frequent transactions. Unlike paper documentation, digital records are protected from physical damage or loss, reducing the risk of missing critical information.

However, simply storing records isn’t enough. You need to categorize expenses accurately to maintain reliable profit-and-loss statements. Misclassified expenses can distort financial reports, leading to incorrect tax filings or missed deductions. 

It’s also vital to keep business and personal transactions separate. Mixing personal and business finances can cause confusion, especially during tax filing, and may lead to legal or tax complications. 

Staying updated with tax regulations and compliance

Tax laws change (and often). And sales tax laws are a headache. But ignoring them can cost you. With economic nexus laws in place in the US, you’re responsible for collecting and remitting sales tax in multiple states (not just where you’re based).

If you sell on Shopify, Amazon, or Etsy, the platforms collect sales tax for you, but you still need to file returns. Some states require marketplace facilitators (like Amazon) to collect tax, while others hold sellers accountable. 

If you don’t keep up, you risk underpaying and risking penalties or overpaying and reducing your profits. Also, track taxable vs. non-taxable sales for easy audit-proof records.

Data entry and management

Always record transactions in real time. Delays increase the risk of missing expenses or misreporting revenue. Maintain consistent categories for income, expenses, and refunds to avoid confusion later.

You should regularly reconcile accounts by matching bank statements with sales records to catch discrepancies early. Always keep detailed records of invoices, receipts, and supplier payments for tax compliance and audits.

Finally, establish a clear process for data entry, whether you handle it yourself or assign it to a bookkeeper. Clean, accurate records make tax season stress-free and help you track your business performance with confidence.

Managing inventory and Cost of goods sold (COGS)

Messy inventory records can wreck your finances. If you’re not tracking the cost of goods sold (COGS) correctly, you might be pricing products too low or overpaying on taxes. Use real-time inventory tracking tools to sync stock across all your sales channels.

Choose the right COGS method—FIFO is great for perishable goods, while Weighted Average Cost works if your costs fluctuate. You should reconcile inventory monthly to catch discrepancies before they become costly mistakes.

If you use Amazon or a 3PL, make sure to account for storage and fulfillment fees in your COGS to keep your profit margins accurate!

Varying processing fees and bookkeeping

When you sell online, you process payments through integrated payment providers or external software. These services often charge fees for each transaction, which need to be tracked and accounted for in your bookkeeping. 

If you use multiple payment providers, it’s essential to reconcile the fees from each one to track all costs accurately. Payment processing fees are deductible business expenses, reducing your taxable income. These fees can accumulate quickly, so keeping a log of each transaction and the associated fee is important. 

Most payment providers offer detailed logs of the fees incurred during each transaction. Reconciling these fees with your overall sales data ensures that your financial records remain accurate and you don’t overlook any costs.

Choosing between hiring an ecommerce bookkeeper vs. DIY vs. automation software

When it comes to managing ecommerce finances, you can choose from one of three paths: hire a professional bookkeeper, do it yourself, or use automation software. Each approach offers different levels of control, cost, and accuracy.

For example, a professional bookkeeper may specialize in ecommerce financials. They can thus handle complex tasks like multi-channel sales, tax compliance, and inventory management. Their expertise minimizes errors, ensures tax compliance, and provides valuable insights. 

On the other hand, DIY bookkeeping for ecommerce offers complete control at a lower cost. It’s suitable for small businesses with a single online store. You can track sales, expenses, and taxes directly. However, DIY can be time-consuming and prone to errors, especially with multi-channel sales and varying tax rates. Managing finances manually becomes more complex as your business grows, leading to missed deductions and tax penalties.

Automation software like Webgility, which integrates with QuickBooks Advanced Inventory and NetSuite, perfectly balances efficiency and affordability. It syncs transactions across platforms like Shopify, Amazon, and eBay, automates sales tax calculations, and keeps financial records up to date in real-time. This reduces bookkeeping errors while streamlining inventory tracking and financial reporting.

The best choice depends on your business size, complexity, and budget. DIY works for small businesses with simple finances, but automation or a professional bookkeeper becomes necessary as complexity grows. A bookkeeper adds expertise for specialized needs, but automation enhances efficiency and reduces costs while also handling complex financial tasks.

Software for ecommerce bookkeeping

Irrespective of which ecommerce bookkeeping software you select, you’ll have to deal with manual data entry to some extent. That means spending time entering orders, updating prices and COGS data, and reconciling transactions. Unfortunately, this can be time-consuming and prone to errors, leading to costly bookkeeping mistakes.

Pairing your ecommerce bookkeeping software with an ecommerce automation tool can drastically reduce your workload.

QuickBooks Online/Desktop: Best for ecommerce bookkeeping app

QuickBooks Online is the most widely used accounting software. It offers cloud-based financial management for small to mid-sized businesses. While QuickBooks Online provides accessibility and automation, QuickBooks Desktop caters to experienced accountants who need advanced features.

With AI-powered automation, QuickBooks simplifies bookkeeping by generating invoices, scheduling payments, and categorizing expenses. Detailed reports and budgeting tools give you insights into spending patterns and profitability.

Plus, QuickBooks Online Advanced helps improve productivity and efficiency with customizable dashboards, automated workflows, and batch invoicing.

Key features

• Expense tracking: QuickBooks syncs with your bank and credit card transactions in real time, ensuring accurate financial records without the hassle of manual entry.
• Tax preparations: QuickBooks helps you stay organized year-round by letting you snap and store receipts on the go, track mileage effortlessly, and categorize expenses, all from the mobile app, so you maximize deductions and stay compliant.
• Custom reporting: With QuickBooks, you can tag transactions by project, event, or location and generate custom reports that highlight the financial insights that matter most, helping you make informed decisions with confidence.

Pricing

• Simple Start: $17.50/month per user
• Plus: $49.50/month per 5 users
• Advanced: $117.50/month per 25 users

For more details on pricing, check out QuickBooks’ pricing page.

Webgility: Best bookkeeping + Inventory automation for Quickbooks users

Trusted by 20,000+ ecommerce sellers, Webgility is the #1 QuickBooks connector, automating bookkeeping and inventory management for QuickBooks users. It seamlessly connects QuickBooks with sales platforms, marketplaces, and POS systems, ensuring every transaction is posted accurately, inventory remains updated, and accounting stays in sync without manual effort.

Webgility supports detailed and summary-based accounting, making it ideal for businesses scaling across multiple sales channels. It records every order in real time, capturing customer details, itemized sales, discounts, taxes, and shipping income. Granular data mapping ensures accurate financial tracking without manual entry.

It also provides deep financial insights by analyzing margins, marketplace fees, and shipping costs. Businesses can generate reports, pivot tables, and track income across sales channels or payment processors, eliminating the need for spreadsheets. Webgility centralizes ecommerce data, allowing shared access for accountants, unlimited users, and role-based permissions.

To prevent stockouts, Webgility automates inventory management and purchase orders. It integrates with QuickBooks Desktop/Enterprise to generate POs for out-of-stock items, ensuring timely restocking.

For tax compliance, Webgility maps sales tax collected across all channels to the correct accounts, streamlining filing and reporting. It also integrates with Avalara and other tax tools for accurate bookkeeping.

Key features

• QuickBooks integration: Webgility automatically syncs sales data, orders, and returns across all ecommerce channels, keeping financial records accurate in real time.
• Automated order reconciliation: By instantly matching sales and returns with corresponding transactions, Webgility eliminates manual tracking and reduces bookkeeping errors. This automation saves time and guarantees financial reports reflect actual revenue.
• Smart tax automation: Webgility maps collected sales tax to the correct accounts, maintaining compliance with state and local tax regulations. By automating tax filings and integrating with tools like Avalara, it minimizes risks and simplifies reporting.

Pricing

• Basic: $59/month per sales channel 
• Pro: $119/month per 2 sales channel

For Webgility’s most recent cost, check their pricing page.

Case study: How Channie’s increased order volumes by 250% with automation

Channie’s Visual Handwriting & Math Resources started as a personal solution for improving children's handwriting. Founder Chan Stimart developed a color-coded block system to help kids maintain letter size consistency. 

The system quickly gained traction with parents and educators, forming the core of the business. Since launching in 2015, the company has expanded its product line to include math resources, dry erase cards, and puzzles, selling across Amazon, eBay, Walmart, and Target.

As Channie’s business grew, so did the complexity of order management. Rapid sales expansion across multiple ecommerce channels led to overwhelming manual data entry, consuming hours daily. 

Stimart, a former global supply chain expert, needed an efficient way to sync orders to QuickBooks Online and maintain real-time performance insights. However, most automation solutions were too expensive for a growing business.

Channie’s implemented Webgility’s ecommerce accounting automation to streamline data entry and financial reporting. With Webgility’s seamless integration, orders from various sales channels were automatically reconciled, eliminating the need for manual bookkeeping. The team also leveraged Webgility’s granular analytics to verify sales data against their inventory system, ensuring accuracy across operations.

As a result of this partnership, the company achieved:

• 250% increase in order volume: Automation freed up time for customer experience improvements, driving significant growth.
• 60+ hours saved per month: Eliminating manual data entry saved two hours per day, allowing the team to focus on sales and service.
• Cost savings: Webgility reduced the need for additional accounting staff, minimizing overhead.
• Enhanced customer experience: With operations running smoothly, the team could prioritize customer support, strengthening brand reputation.

Read the full case study here.

How to measure the effectiveness of your bookkeeping automation

Automating bookkeeping can save time, reduce errors, and improve financial insights for your business. However, ensuring that automation truly enhances your bookkeeping requires regular evaluation. 

Here are four key areas to assess the effectiveness of your bookkeeping automation and optimize its performance.

Accuracy and data integrity

One of the primary reasons for automating bookkeeping is to minimize human error and maintain accurate financial records. Transactions should be recorded correctly, categorized appropriately, and reconciled with bank statements to ensure consistency. Any discrepancies between invoices, receipts, and purchase orders should be flagged and corrected promptly. 

Automation tools that include duplicate detection and anomaly flagging can help catch potential errors early. 

Efficiency and time savings

Bookkeeping automation should free up time for more strategic tasks. By reducing the manual workload, such as auto-categorizing expenses and syncing bank transactions, automation allows businesses to focus on growth and decision-making rather than tedious data entry. 

Tracking how much time is saved on invoice processing, reconciliation, and financial reporting provides a clear measure of efficiency. 

If bookkeeping tasks still require frequent manual intervention, optimizing workflows or upgrading automation tools may be necessary to achieve maximum productivity.

Cash flow and financial reporting insights

A well-automated bookkeeping system should provide precise and real-time financial insights. Accurate cash flow statements, profit and loss reports, and economic forecasts help business owners make informed decisions. 

If reports lack detail or take too long to compile, you may need to upgrade to a more robust bookkeeping software.

Tax compliance and audit readiness

A major advantage of bookkeeping automation is simplifying tax preparation and ensuring compliance. Automated categorization of tax-related transactions, timely tax filings, and accurate tracking of deductible expenses help businesses avoid penalties and last-minute stress. Secure digital storage of receipts and financial documents ensures that records are audit-ready at any time. 

Simplify ecommerce bookkeeping to drive business success

Understanding your business’s financials is non-negotiable. Whether you're doing it yourself or working with a professional, having a clear view of your money flow gives you the power to make better decisions.

Many business owners and bookkeepers assume integrating QuickBooks with their ecommerce platform will meet their needs. But that’s only part of the solution. This integration alone won’t make your books ecommerce-friendly. They’re crucial but represent only one piece of a much larger puzzle.

If you want to make the process even easier, Webgility’s integration with QuickBooks might be the answer. As one of the best bookkeeping software for ecommerce, Webgility automatically syncs your sales, inventory, and payments, saving you time and reducing human error. With Webgility, you can focus on growing your business, knowing your books are accurate and updated.

Book a demo with Webgility today to keep your financials in check!

Frequently Asked Questions

How can I automate bookkeeping for my ecommerce business?

To automate bookkeeping for your ecommerce business, integrate your store with accounting software like QuickBooks + Webgility. Use features like automated tax calculations, bank reconciliations, and workflow automation to get the task done.

How do I integrate QuickBooks with my ecommerce channels?

To integrate QuickBooks with your ecommerce channels, you can use Webgility to sync directly with QuickBooks Desktop. You can track your revenue from platforms like Amazon, eBay, and Shopify in QuickBooks. Additionally, Webgility lets you view fulfillment data, orders, item inventory, and other essential details within QuickBooks.

To get started, simply sign up for a Webgility account. From QuickBooks, go to Company, then My Company, and select Get E-commerce Integration. You can then explore the available Webgility packages, purchase, and activate the integration. If you’re not signed in already, you will be prompted to log into your Intuit account to complete the setup.

What tools or software can help simplify ecommerce bookkeeping?

To simplify e-commerce bookkeeping, consider using accounting software like Xero, QuickBooks+Webgility, Zoho Books, FreshBooks, or Wave.