The Top 7 Accounting Tips for Running an E-commerce Business

There’s many reasons our clients say they love running an e-commerce business - control over your own time, low start-up costs, minimal required skills and qualifications, and the fact you can usually run it from anywhere you want.

This kind of freedom e-commerce offers, combined with the excitement of orders flying in, stock flying out, and your phone constantly pinging with “New sale!” notifications, make running an e-commerce business increasingly attractive for UK small business owners.

But behind the scenes, keeping your finances in order can quickly become…well, much less exciting. From tracking inventory to reconciling multiple sales channels, it’s easy to get tied up in spreadsheets and spreadsheets about spreadsheets.

Not only does this suck the fun out of online entrepreneurship, it can also cause tax issues and problems with HMRC if you get behind or make errors.

So here’s 7 accounting and bookkeeping tips from us at Sadler Advisory to help you stay on top of your e-commerce finances and keep your business growing confidently.

1. AUTOMATE YOUR SALES DATA (AND STOP MANUALLY ENTERING TRANSACTIONS)

If you’re selling on platforms like Amazon, Shopify or Etsy, you’ll know how quickly the transaction volume adds up. Rather than manually copying numbers into Xero, automate it with a tool like Link My Books.

It pulls sales, refunds, fees, and taxes directly from your sales channels into Xero — automatically summarised and categorised. That means fewer errors, less admin, and better visibility over your true profit margins.

As our own e-commerce clients would tell you, automate as much as you can early. The longer you wait, the messier your data becomes.

2. KEEP YOUR ACCOUNTS AND INVENTORY IN SYNC

Your stock levels, purchase costs, and sales figures are all connected — but they often live in different systems. Make sure your accounting software (like Xero) and your e-commerce platform talk to each other properly.

Use integrated apps or a structured chart of accounts to track cost of goods sold, stock adjustments, and fulfilment costs. This helps you understand your real profitability per product, not just your total sales number.

3. RECONCILE PAYMENTS IN BATCHES (AND SAVE HOURS EACH MONTH)

Payments from Amazon, Etsy or Shopify Payments don’t land as one transaction per sale — they come as lump sums after platform fees and taxes are deducted.

Tools like Apron make reconciling these payments easier by letting you process batch payments, match invoices, and manage supplier bills in one place.

It’s a simple fix that saves hours of admin and keeps your cash flow clear and trackable.

4. UNDERSTAND YOUR CASH FLOW — NOT JUST YOUR PROFIT

Many e-commerce businesses look great on paper but struggle in practice because cash flow gets tight. Use platforms like Syft Analytics to turn your data into clear financial forecasts and dashboards.

You can track trends, visualise cash flow over time, and model “what if” scenarios, like increasing ad spend or changing suppliers, before you make the decision.

5. STAY ON TOP OF VAT AND INTERNATIONAL SALES

If you sell across borders, VAT and sales tax can get complicated fast. Automate as much of it as you can using your accounting integrations — for example, Link My Books can handle marketplace VAT calculations automatically.

Make sure your chart of accounts reflects the right VAT rates, and that you’re using digital record-keeping tools compliant with Making Tax Digital (MTD).

Xero’s MTD for VAT tools make submitting directly to HMRC simple once your data is clean and categorised.

6. SEPARATE YOUR BUSINESS FINANCES (AND PAY YOURSELF PROPERLY)

It’s tempting to dip in and out of your business account, especially in the early stages, but that’s a quick way to lose track of your numbers.

Set up separate accounts, record owner drawings properly, and review your figures monthly so you know what’s really going on. This also makes your accountant’s job easier (and their invoices smaller).

7. REVIEW YOUR PERFORMANCE REGULARLY — NOT JUST AT YEAR-END

Don’t wait until your accountant tells you how you did last year.

Set a monthly or quarterly reporting rhythm using Xero + Syft Analytics to review sales performance, gross margin, and cash flow trends.

Understanding your numbers as you go gives you control and confidence to adjust pricing, manage stock, or invest in marketing when you need to.

BRINGING IT ALL TOGETHER WITH EXPERT E-COMMERCE ACCOUNTING

What’s equally important to e-commerce success, as well as sales volume, is understanding your numbers so you can scale sustainably.

Happily you can now ditch manual bookkeeping and accounting for digital platforms, and get an expert e-commerce accountant.

Combining Xero, Link My Books, Apron, and Syft Analytics, lets you automate your data, streamline your bookkeeping, and get real insight into how your business is performing.

That’s why we use these and other software to give our clients a major advantage.

And if you’d rather have someone handle the setup or reporting for you, that’s exactly what we do at Sadler Advisory — helping e-commerce founders spend less time wrestling with spreadsheets and more time building the business they love.

Talk to us about how we can simplify your e-commerce accounting today.