E-commerce accounting, per channel and per SKU.
Amazon settlements, Shopify payouts, multi-state sales tax, and true profitability by product. All reconciled every month.
Where online sellers stall.
Multi-state sales tax
Economic nexus in 45+ states, varying tax rates, and complex exemption rules.
Inventory management
COGS calculations, inventory valuation, and FBA / 3PL reconciliation.
Multi-channel sales
Consolidating Amazon, Shopify, eBay, Walmart, and DTC revenue accurately.
Profitability analysis
True margins after fees, returns, and advertising costs, per SKU and per channel.
Same business. Same twelve months. Different ending.
What the cash trap does to sellers
- Deposits booked as revenue, so your margin is a fiction and the 1099-K mismatch invites an IRS notice.
- Inventory expensed when the wire leaves, so a restock month reads as a loss and your best month is a lie.
- Scaling ad spend against a contribution margin nobody has actually computed.
What selling on real numbers feels like
- Landed cost, channel fees, and returns all in the unit math, so you scale what really earns.
- Sales tax exposure watched across states before it compounds, not after.
- A P&L an acquirer can read, which is exactly what makes an exit clean.
The fourteen-day assessment costs nothing and you keep every deliverable either way. The only thing at risk is another year of the left column.
Get your free e-commerce assessment.
Enter your email and we'll send you a personalized analysis of common e-commerce financial challenges and how to solve them.
The full e-commerce stack.
Books, sales tax, inventory, and monthly channel-level margins.
- Multi-channel revenue reconciliation
- Sales tax nexus analysis and compliance
- Amazon Seller / FBA accounting
- Shopify and WooCommerce integration
- Inventory and COGS tracking
- Marketplace fee reconciliation
- Advertising spend tracking (PPC, Meta, Google)
- Returns and refund management
- Monthly profitability by channel and product
- Multi-state and international tax planning
What you get, every plan
- Books closed on your plan's schedule, every month.
- All fifty states covered.
- Open seven days a week.
- 14 days. No card. Keep the deliverables.
Written for e-commerce sellers, not a brochure.
Nothing below is a summary. Each position names the section it rests on, so open only what applies to you.
01What quietly costs you money5 we find most↓
None of these are exotic. They are the ones we find most often when we open a new set of books.
-
01
Booking the marketplace deposit as revenue
Amazon, Etsy, eBay and Shopify Payments all deposit net. The settlement is gross sales minus referral fees, fulfillment fees, storage, refunds, chargebacks, and on some accounts ad spend. Assume a deposit of $41,200 hits the bank. If the bookkeeper posts that $41,200 as sales, every fee buried inside the settlement disappears from the P&L and revenue is understated by the same amount.
Your gross margin percentage is wrong every single month, so you price off a number that does not exist. Then the 1099-K arrives reporting gross, not net, and it is materially higher than the revenue on your return. That mismatch is exactly what the IRS automated matching program looks for, and you get a CP2000 notice for income you never actually received.
-
02
Treating inventory purchases as an expense when the money leaves
Cash basis feels intuitive and QuickBooks will happily let you code a supplier wire straight to cost of goods sold. Inventory is a balance sheet asset until the unit sells. Under section 471(c) a small business taxpayer can follow its books, but only if the books actually track inventory somewhere. Most do not.
Profit swings violently with restock timing instead of with performance. To illustrate, a $180,000 container purchase in November makes Q4 look like a loss year, and January looks like your best month ever because you bought nothing. You cannot tell whether a SKU is working, you cannot forecast cash, and if you ever go for a line of credit the lender sees earnings volatility that is entirely an artifact of your bookkeeping.
-
03
Assuming Amazon collecting sales tax ends your obligation
All 45 states that impose a state sales tax, plus the District of Columbia, have marketplace facilitator provisions, so Amazon, Etsy, eBay and Walmart collect and remit on marketplace orders. Alaska has no state sales tax, but many local jurisdictions there administer their own remote seller and marketplace rules. Sellers reasonably conclude the problem is solved. It is not. Your Shopify, wholesale and direct sales are your own obligation, and several states still require a registered seller to file a return reporting gross sales including the marketplace portion, then deduct it as tax collected by a facilitator.
You cross an economic nexus threshold in a state on your direct channel, never register, and the liability compounds quietly with interest and penalty on every month of unfiled tax. Sales tax you failed to collect comes out of your own pocket, because you cannot go back and bill a customer from two years ago. It also becomes a diligence item that kills or reprices an exit, since the buyer inherits the exposure.
-
04
Leaving freight, duty and tariffs out of landed cost
The supplier invoice gets coded to inventory and the freight forwarder invoice, the customs broker bill and the duty payment get coded to shipping expense or a general overhead bucket because they arrive separately and weeks apart. The duty line is no longer a rounding error. The $800 de minimis exemption was suspended for China and Hong Kong on May 2 2025 and for all countries on August 29 2025 under Executive Order 14324, CBP indefinitely suspended it for all modes of transport by interim final rules issued June 24 2026, and it is statutorily eliminated effective July 1 2027 under section 70531(b)(3) of the One Big Beautiful Bill Act. Low value direct import parcels that used to arrive duty free now carry duty.
Your unit cost is understated, so your reported gross margin is too high and your contribution margin per SKU is a fantasy. You keep scaling ad spend against a margin that does not exist. For tax, freight in and duties are properly capitalized into inventory, so expensing them early also misstates taxable income between years.
-
05
Recognizing revenue on the order date with no reserve for returns
The sale posts when the order confirms. The return shows up thirty or sixty days later and gets netted into a later month, often against a different cohort of sales. Apparel in particular tends to return at a materially higher rate than other categories, and chargebacks land later still.
Every month looks better than it was and the correction lands in a month that did not earn it, which makes trend analysis useless. You also lose the ability to see whether a specific SKU or a specific ad campaign is generating returns. A book reserve is the right management answer, and it is a book to tax difference we track rather than hide, since the deduction is not taken until the return actually happens.
02The numbers your business actually runs on6 to know cold↓
Contribution margin after ad spend
Net revenue, less landed COGS, less all channel fees, less fulfillment and shipping, less the advertising directly attributable to that channel or SKU. The number that is actually left over to cover overhead.
It moves with fee changes, freight rates, duty, discounting and ad efficiency all at once. Most sellers only watch gross margin, which hides three of those five.
There is no honest universal figure. What matters is that it is positive at the SKU level and that you know it monthly, not annually. We set the report up so you can compare it against your own trailing twelve months.
Blended MER, or total revenue divided by total ad spend
Every marketing dollar across every platform measured against total revenue, rather than each platform's self reported ROAS.
Platform attribution double counts. Meta and Google will both claim the same conversion, so channel level ROAS can look healthy while the business loses money. Blended MER cannot be gamed by attribution windows.
Compare it to your own break even MER, which is one divided by your contribution margin rate before ads. This is arithmetic, not an industry statistic. If your contribution margin before ads is 40 percent, you break even at an MER of 2.5.
Inventory turns and days inventory outstanding
COGS divided by average inventory, and the same idea expressed in days. How long your cash sits as product before it becomes a sale.
It is the single biggest driver of cash conversion in this business. Every extra day of inventory is a day your cash is on a shelf. It also drives Amazon's aged inventory surcharge, which begins once a unit has been in a fulfillment center for 181 days, steps up the longer it sits, and is billed monthly. It replaced the old long term storage fee, so aging stock now costs you faster than it used to.
Varies enormously by category, so we benchmark against your own history and against your supplier lead time plus safety stock. The test is whether turns are improving while stockouts are not.
Refund and return rate by SKU
Refunded units divided by units sold, tracked per SKU and per channel rather than as one company wide percentage.
It changes true revenue, it changes fee drag since some marketplace fees are not fully refunded, and on Amazon a high return rate on a listing affects account health.
Track the trend and the outliers. One SKU with a return rate well above your account average is usually a listing problem, a sizing problem or a quality problem, and it is fixable.
Economic nexus exposure by state
Rolling twelve month sales and, where the state still uses one, transaction count by state, split between marketplace facilitated and your own direct channels.
It moves every month as you grow, and it moves fastest right after a viral month or a new channel launch. This is the report that tells you where to register before a liability accrues, rather than after.
$100,000 is the most common threshold and the one to watch first. Several larger states sit higher, including California, Texas and New York at $500,000, with New York also requiring more than 100 transactions. A number of states have dropped the transaction count prong entirely, others kept it, so we confirm each state's current rule when we run your study rather than working off a saved list.
Cash conversion cycle
Days inventory outstanding, plus days sales outstanding on wholesale receivables, minus days payable outstanding on supplier terms.
It explains the thing every growing seller feels and cannot articulate: profitable on paper, no money in the bank. Fixing supplier terms is often worth more than fixing ad spend.
As a rule of thumb, negative is the goal, and it is reachable if you have real supplier terms and fast turns. Most direct import sellers who pay deposits up front run deeply positive, which is why growth feels like it consumes cash.
03Where the tax work is5 positions↓
Each one names the section it rests on and who is allowed to perform it.
Section 471(c) small business inventory treatment
IRC section 471(c); gross receipts test under IRC section 448(c); $31,000,000 for 2025 per Rev. Proc. 2024-40 and $32,000,000 for 2026 per Rev. Proc. 2025-32; Form 3115
A taxpayer that meets the gross receipts test can elect out of the general inventory rules and account for inventory as non incidental materials and supplies, or follow its own books and records method. The threshold is average annual gross receipts over the prior three years of $31,000,000 for tax years beginning in 2025 and $32,000,000 for 2026.
Read the full position, 69 more wordsShow less↓
It removes a real compliance burden, but the books and records route only works if your books actually reflect inventory the way you claim on the return. This is where sellers get caught: they claim the small taxpayer treatment while running cash basis books with no inventory account at all.
Changing method is a formal accounting method change on Form 3115, not something you quietly do differently next year.
Who does it: In house. We run the gross receipts test, model the treatment against your actual buying pattern, prepare the Form 3115 where a method change is required, and prepare and sign the return. Returns are prepared and signed by an IRS registered preparer holding a PTIN.
UNICAP exemption for small business taxpayers
IRC section 263A(i); gross receipts test under IRC section 448(c); Rev. Proc. 2024-40 and Rev. Proc. 2025-32
Section 263A normally requires capitalizing an allocable share of indirect costs into inventory, which for a seller means pieces of warehousing, purchasing and handling cost. Taxpayers meeting the same section 448(c) gross receipts test, $31,000,000 for 2025 and $32,000,000 for 2026, are exempt.
Read the full position, 33 more wordsShow less↓
That exemption is worth real money and real hours, and it is one of the first things to check when you approach the threshold, because losing it changes how the return is built.
Who does it: In house.
Economic nexus study, registration and voluntary disclosure
South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018); state marketplace facilitator statutes; state voluntary disclosure programs
After South Dakota v. Wayfair a state can require you to collect based on sales volume alone, with no physical presence. We measure your rolling exposure state by state, separate the marketplace facilitated sales from your direct sales, and register you where you actually have an obligation rather than everywhere at once.
Read the full position, 77 more wordsShow less↓
Registration is quoted per state, from $250 per state, in writing before we start. If you are already behind, a voluntary disclosure agreement will typically limit the lookback period and abate penalty, which is usually a far better outcome than registering normally and inviting a full history review, though terms differ by state.
Inventory sitting in a third party warehouse in a state is a separate physical presence question, and states have taken different positions on it.
Who does it: Nexus study, registrations, back filings, voluntary disclosure paperwork and ongoing returns are all in house. If a state audit escalates to a formal protest or appeal that requires a licensed representative to hold a power of attorney, that piece is coordinated through our vetted partner network under a signed engagement letter, and we prepare the records and schedules behind it. WAYG is not a CPA firm and does not perform audits, reviews or compilations.
1099-K reconciliation and the gross versus net gap
Form 1099-K; IRC section 6050W; One Big Beautiful Bill Act; IRS Form 1099-K FAQs updated October 23 2025
For third party settlement organizations the reporting threshold is back to more than $20,000 in payments and more than 200 transactions, after the $600 rule was repealed retroactively by the One Big Beautiful Bill Act, so some smaller sellers will stop receiving those forms. Do not assume that means no form at all.
Read the full position, 94 more wordsShow less↓
There is no minimum threshold for payment card transactions, so if you run Shopify Payments, Stripe or any card processor, you get a 1099-K regardless of volume. Either way, the threshold changes nothing about your obligation to report the income.
The bigger issue is that a 1099-K reports gross transaction volume before fees, refunds and chargebacks, so it will always be larger than what you banked. The return needs to show gross receipts that tie to the forms, with the fees and refunds shown as what they are, or you get a matching notice.
Who does it: In house. We reconcile every 1099-K and every marketplace settlement report to the general ledger before the return is prepared, and we prepare and sign the return.
Equipment and warehouse buildout expensing
IRC section 179; Rev. Proc. 2025-32
Racking, forklifts, packing and labeling equipment, warehouse fitout and the computers that run it are ordinary capital purchases for a seller who brings fulfillment in house. The section 179 limit is $2,500,000 for 2025 and $2,560,000 for 2026, with the deduction beginning to phase out once total qualifying purchases exceed $4,000,000 for 2025 and $4,090,000 for 2026.
Read the full position, 52 more wordsShow less↓
Both figures sit far above what most sellers will ever spend, so the real planning work is timing. Placing equipment in service in a high income year versus a low one, and coordinating that with an inventory heavy year end, is a decision worth modeling before you buy rather than in March.
Who does it: In house.
E-commerce accounting questions.
Do you integrate with Amazon Seller Central?
Yes, we integrate directly with Amazon Seller Central and specialize in FBA accounting. We reconcile settlements, track fees, handle reimbursements, and provide accurate inventory valuations for tax purposes.
How do you handle multi-state sales tax?
We analyze your nexus across all states, register you where required, and handle ongoing filing and remittance. We work with tools like TaxJar and Avalara, or manage filings manually where that's simpler.
Can you calculate profitability by product or SKU?
Absolutely. We help you understand true profitability after product cost, shipping, marketplace fees, returns, and advertising, so you know which products to scale or discontinue.
What are your goals?
Two weeks. Real books. Real margins by channel and SKU. You keep the deliverables.
Curious how we stack up? See how we compare to Bench →