A seller looks at the Shopify dashboard and sees $40,000 of sales for the month. The bank shows deposits of $36,200. QuickBooks shows income of $36,200, or sometimes $76,200. None of these numbers is wrong on its own. They are measuring different things, and the gap between them is where e-commerce bookkeeping goes astray.
A payout is not a sale
Shopify Payments and Amazon do not send you your sales. They send you a settlement: sales for a period, minus refunds, minus processing and selling fees, minus advertising or fulfilment charges, plus or minus adjustments and reserves. Sales tax collected is often inside the payout too, and on marketplaces some of it may be collected and remitted by the marketplace itself.
If the deposit is recorded as income, three things go wrong at once: revenue is understated, fees and refunds never appear as expenses, and sales tax may be counted as income.
Timing makes it worse
Settlement periods rarely line up with calendar months. Amazon settlements commonly span two weeks, and a payout that arrives early in the month can relate mostly to the month before. Without an adjustment, sales land in the wrong period and month-to-month comparisons become unreliable.
The clearing account method
The standard solution is to record each settlement in full, not only the net deposit.
- Create a clearing account for each sales channel, for example “Shopify clearing” and “Amazon clearing”.
- For each settlement, post a summary entry: gross sales, refunds, each category of fee, sales tax collected and any reserve movement, with the net amount going to the clearing account.
- When the payout reaches the bank, record it as a transfer from the clearing account.
- At month end the clearing account should show only settlements still in transit. Any other balance is an error to find.
Tools such as A2X automate the summary entries and split settlements that cross month end, which is why I use it for most Shopify and Amazon clients. The method works without a tool as well. It simply takes longer.
A monthly reconciliation routine
- Match every bank deposit from each channel to a settlement.
- Confirm each clearing account balance equals the payouts in transit.
- Compare gross sales in the books to the channel reports for the same period.
- Reconcile sales tax collected to the liability account and to what was filed or remitted.
- Review fees as a percentage of sales. A sudden change is worth investigating.
Why it matters beyond tidy books
With gross sales, refunds and fees recorded separately, you can see true margin by channel, notice when fees or return rates rise, and give your CPA figures that agree with the forms the platforms issue at year end.
I work with Shopify and Amazon sellers on exactly this. See bookkeeping and monthly close, the e-commerce section of my industries page, or get in touch.
This article is general information. Sales tax obligations depend on where and how you sell, so confirm yours with a qualified adviser.