Sector · E-Commerce & Retail
Selling online is simple. The accounting behind it rarely is.
Marketplace fees buried inside gross revenue. Shopify payouts that don’t match your bank. VAT obligations that shift the moment you start selling into Europe. Stock sitting on a balance sheet at the wrong value. Growing e-commerce businesses carry more accounting complexity per pound of turnover than almost any other sector — and most accountants don’t understand the detail.
The e-commerce accounting challenge
Five problems that compound as you scale
- Marketplace VAT — Amazon, eBay and Etsy handle some VAT for you, but not all of it, and the rules differ by platform and territory
- Platform reconciliation — Shopify and WooCommerce gross revenue is not your bank balance, and the gap between them isn’t always obvious
- Multi-currency — exchange rate timing affects both your reported profit and your VAT liability in ways most bookkeepers don’t handle correctly
- Post-Brexit imports — customs duties, postponed VAT accounting, and import VAT reclaim are all live compliance obligations
- Fulfilment payroll — scaling warehouse and packing staff quickly creates payroll complexity that needs to run alongside the rest of the function
Marketplace VAT . Shopify Reconciliation . Multi-Currency . Import Duties . Stock Valuation . Fulfilment Payroll . Management Accounts . Post-Brexit Compliance
Where things go wrong
The problems that hide in plain sight as you grow.
These aren’t edge cases. They’re the standard experience for an e-commerce business processing high order volumes across multiple platforms — and they’re almost always invisible until a VAT inspection or a funding conversation forces someone to look properly.
01
The problem
Your Shopify revenue and your bank balance tell different stories
Shopify reports gross sales. Your bank receives net payouts — after platform fees, refunds, chargebacks, and currency conversion. The gap between those two numbers is where margin disappears unnoticed. Most bookkeepers reconcile to the payout. That means the fees never get properly captured as a cost, and your gross margin is overstated on every management report.
How we handle it
We reconcile at transaction level — gross revenue, platform fees, refunds, and net payout treated as separate line items. Your P&L reflects what’s actually happening to margin, not what the dashboard says. Every fee is captured. Every refund is matched. The management accounts become usable.
02
The problem
Amazon and eBay collect some VAT — but the liability doesn’t disappear
Since the 2021 marketplace rules, Amazon and eBay act as deemed suppliers for certain transactions — collecting and remitting VAT on your behalf. But this doesn’t remove your VAT obligations entirely. The interaction between marketplace-collected VAT and your own VAT returns is complex, and getting it wrong creates both over-payment and compliance exposure.
How we handle it
We map your sales by platform, territory, and transaction type — identifying exactly which VAT is the marketplace’s responsibility and which is yours. Your VAT returns reflect the correct position. No overpayment. No under-declaration. No guesswork at quarter-end.
03
The problem
Multi-currency sales create invisible VAT and profit distortions
When you sell in euros or dollars, the exchange rate at the point of sale differs from the rate when the payout hits your account. Most bookkeeping systems record the payout rate — not the transaction rate. That means your revenue is recorded at the wrong value, your VAT calculation is based on the wrong figure, and your gross margin by currency is invisible.
How we handle it
We record transactions at the correct exchange rate for VAT purposes, track realised and unrealised currency gains separately, and give you a clear picture of margin by currency — so you can see whether selling in euros is actually profitable after the conversion cost.
04
The problem
Post-Brexit importing is still being handled incorrectly by most businesses
Postponed VAT Accounting (PVA) was introduced to help importers — but many businesses are still not claiming their import VAT back correctly, or are processing customs duties in the wrong accounting period. Some are missing the monthly PVA statements entirely. The cumulative effect on cash flow and the VAT liability is significant.
How we handle it
We ensure PVA statements are reconciled monthly, import VAT is correctly reclaimed on your VAT return, and customs duties are expensed in the right period against the right product lines. For businesses importing regularly, this alone often recovers meaningful cash that was sitting unclaimed.
05
The problem
Stock valuation is wrong — and it’s distorting your profit every month
Stock sitting on the balance sheet at purchase cost sounds straightforward. In practice — with multiple suppliers, varying landed costs, currency-denominated purchases, and returns — the cost of goods figure used in your management accounts is usually an approximation at best. That means every gross margin figure you’ve seen is probably wrong.
How we handle it
We build a stock valuation method that reflects your actual buying patterns — landed cost including duties and freight, consistently applied. Your gross margin becomes a number you can actually manage from, rather than one you apologise for at year-end.
Platform knowledge
We know how each platform actually works — and where it breaks.
Each platform has its own fee structure, payout timing, VAT handling, and reporting format. Generic bookkeeping doesn’t account for these differences. We do.
Platform 01
Shopify & WooCommerce
The foundation — handled with precision
Direct-to-consumer platforms where gross revenue, net payout, and bank receipt are three different numbers. Payment gateway fees (Stripe, PayPal, Shopify Payments) sit between the sale and the receipt and need to be captured correctly.
- Transaction-level reconciliation to payout
- Payment gateway fee capture by provider
- Refund and chargeback matching
- Shopify Payments vs third-party gateway treatment
- Currency conversion at correct rate
Platform 02
Amazon & eBay
The picture — current enough to lead from
Marketplace platforms where fees are deducted before payout and VAT is collected by the marketplace on certain transactions. The settlement reports require interpretation — the payout figure alone is not sufficient for accurate bookkeeping.
- Settlement report reconciliation
- FBA fee and storage cost separation
- Marketplace-collected VAT identification
- Advertising cost capture (Sponsored Products)
- Refund and return cost allocation
Platform 03
Etsy & Other Marketplaces
The presence — in the room when it matters
Smaller marketplaces with their own fee structures and varying approaches to VAT collection depending on where the buyer is located. For sellers on multiple platforms simultaneously, the consolidation across platforms is where errors multiply.
- Multi-platform consolidation
- Listing fee and transaction fee separation
- Offsite Ads fee capture
- Buyer location VAT treatment
- Cross-platform margin comparison
VAT in e-commerce
VAT for online sellers is not straightforward.
Here is what the liability actually looks like across common e-commerce scenarios — and whether it’s typically handled correctly by businesses without specialist advice.
UK sale via Shopify direct — standard UK VAT, collected and remitted by you on your return
Handled
UK sale via Amazon (UK buyer) — Amazon collects and remits as deemed supplier; excluded from your VAT return correctly
Often wrong
Sale to EU buyer (goods under €150) — marketplace collects VAT under EU OSS rules; your obligation depends on platform and setup
Frequently missed
Goods imported from China — postponed VAT accounting — import VAT deferred and reclaimed on VAT return via monthly PVA statement
Often unclaimed
Multi-currency sale — exchange rate for VAT — HMRC requires specific exchange rate methodology; payout rate is not acceptable
Rarely correct
Sale to B2B EU buyer with valid VAT number — zero-rated under reverse charge; requires evidence of business status
Handled
The pattern we see
The businesses that come to us have usually been filing VAT returns that are technically submitted on time but structurally incorrect. The errors aren’t obvious — they don’t trigger immediate penalties. They accumulate quietly until a VAT inspection surfaces them, at which point the correction covers multiple periods and carries interest.
The most common single error: import VAT not being reclaimed through postponed VAT accounting. For businesses importing regularly from Asia, this is real cash sitting unclaimed — sometimes tens of thousands over two to three years.
The full service
Everything the finance function of a growing e-commerce business needs.
From transaction-level bookkeeping through to tax planning and strategic advice — one person, covering the whole function.
Accounts & Insight
The picture — current enough to act on
Monthly management accounts that show margin by platform, by product category, by channel — not just total revenue against total cost. The financial picture a growing e-commerce business needs to make sourcing and channel decisions.
- Monthly P&L with platform and channel breakdown
- Gross margin by product category — landed cost basis
- Cash flow forecasting — incorporating stock purchase cycles
- Stock valuation — consistent, landed cost methodology
- Fulfilment payroll — up to 20 employees
- Quarterly strategic review — pricing, channel, cost structure
Compliance & Tax
The foundation — handled precisely
Tax done correctly from the start avoids the expensive corrections later. VAT, corporation tax, and self-assessment structured for your business model — not a generic retail template.
- VAT returns — marketplace, import, multi-currency all handled correctly
- Postponed VAT accounting — monthly reconciliation and reclaim
- Corporation tax — timing and structure planned, not just filed
- Self-assessment and personal tax for the director
- HMRC correspondence managed directly
- MTD compliance and digital record-keeping via Xero
Where you are now
The finance function needs to grow with the business.
What a small, single-platform Shopify store needs from its accountant is very different from what a large, multi-platform operation needs. We work across that range — and the service evolves as your complexity does.
- Single platform, direct-to-consumer — getting the foundations right
At this stage the priority is clean bookkeeping, correct VAT from the start, and a management accounts structure that will scale. Decisions made about how to categorise costs and recognise revenue now affect the quality of every report you’ll ever produce. - Adding marketplaces — where the VAT complexity begins
The moment Amazon or eBay is added alongside Shopify, the VAT picture becomes materially more complex. Marketplace-collected VAT, settlement report reconciliation, and the interaction between platforms all need to be handled deliberately — not bolted on as an afterthought. - International sales and importing — post-Brexit obligations live
Selling into Europe or importing stock from Asia introduces postponed VAT accounting, customs duties, and currency accounting that most bookkeepers aren’t equipped to handle correctly. This is the stage where unclaimed VAT and misstated margins become most expensive. - Scaling the team — payroll running alongside the finance function
As fulfilment headcount grows, payroll becomes a weekly compliance obligation that needs to run cleanly alongside the rest of the function. Real-time Information submissions, auto-enrolment, and seasonal workforce variation all need to be managed as part of the same joined-up function — not handed to a separate bureau.
Pricing
Fixed monthly fees. No surprises.
All fees confirmed after a free discovery conversation — e-commerce complexity varies significantly by platform mix, transaction volume, and whether you’re importing. These are the starting points.
Foundation
Bookkeeping & Compliance
From
£450
/mo
Platform reconciliation done correctly, VAT handled, records clean and current.
- Transaction-level platform reconciliation
- VAT returns — marketplace and import rules applied
- Postponed VAT accounting monthly reconciliation
- Xero setup and maintenance
- Payroll — up to 5 employees
- HMRC correspondence managed
Most chosen
Financial Controller
From
£750
/mo
Foundation plus monthly management accounts with platform and margin breakdown.
- Everything in Foundation
- Monthly management accounts with commentary
- Gross margin by platform and product category
- Stock valuation — landed cost methodology
- Cash flow forecasting — stock cycle aware
- Payroll — up to 10 employees
- Quarterly business review
Full function
Fractional FD
From
£1,200
/mo
The complete finance function — tax, accounts, and strategic input on channel, pricing, and sourcing decisions.
- Everything in Financial Controller
- Corporation tax — planned and filed
- Self-assessment and personal tax
- Multi-currency strategy and hedging advice
- Payroll — up to 20 employees
- Monthly strategic review
- Unlimited direct access — no meter running
Fees vary by platform count, transaction volume, and import activity. Confirmed at discovery — no obligation.
Other sectors
Every sector has its own financial complexity.
Running an e-commerce business and not certain your accounts reflect reality?
A first conversation is free. Bring your platform mix, your current VAT setup, and the questions you haven’t been able to get a clear answer to. That’s usually enough to establish whether there’s a problem — and how material it is.
- Specialist knowledge of Shopify, Amazon, eBay, WooCommerce and Etsy accounting
- Post-Brexit import VAT and postponed VAT accounting — handled correctly
- Multi-currency transactions recorded at the right rate for VAT and profit
- Fixed monthly fee — no surprise invoices when you have a question
- One contact — Chloe directly, not a managed service