Untying the Tricky Knots of Merchant Fees for a Flawless eCommerce Bookkeeping

Michael Pignatelli
Dec 20, 2021

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

If you sell on an eCommerce platform, you need to follow the give-and-take system. You get a spot on the marketplace to expand your customer base, and the site earns a percentage. But are you prepared for the complex system that awaits your bookkeeping and accounting duties?

We understand that eCommerce is a complicated place to navigate. There are so many different eCommerce merchant fees that can affect your bottom line, and they're not always easy to understand.

This blog post will help you untangle the tricky knots of merchant fees and eCommerce bookkeeping. We will help you understand and find the best bookkeeping solution for your online business.

An Overview About Merchant Fees: Definition, Process, and Variations

Before we associate bookkeeping with merchant fees, let's first discuss these fees and how they work.

What are Merchant Fees?

Merchant fees, also called seller fees or transaction fees, are eCommerce charges that e-stores collect from you in exchange for making a sale on their platform.

Types of seller fees vary depending on the specific platform. Some of the most common fees you can find in many stores are sales percentage, flat fees, shipping fees, hosting fees, order fulfillment fees, and advertising fees. Among the platforms, Amazon is one of the marketplaces with the most complicated seller fee system.

How Does It Work?

When you make a sale, the merchant deposits sales into your bank account in the form of net sales. This indicates the percentage they've deducted from your gross sales.

eCommerce bookkeeping services - fees concept in wooden cubes

Merchant Fees and eCommerce Business Bookkeeping

The concept of seller fees is fairly easy to understand, but it gets complicated when bookkeeping is involved. So now, let's break down what role seller fees take part in bookkeeping and how they make financial documentation complex.

What Is the Role of Merchant Fees in Bookkeeping?

Naturally, transaction fees are a part of your overall financial documentation. Without them, you won't have complete and accurate information on your list of expenses, which is important for budgeting analysis and planning.

Plus, you have to record them for compliance with IRS regulations. They will require you to report your sales before the merchant fees are taken into account. Therefore, you need accurate details on both merchant fees and gross sales. In addition, merchant fees are tax-deductible, which is another important role for your business.

Undoubtedly, merchant fees are bookkeeping essentials. They're a vital part of your revenue, which is a major aspect of the success of your eCommerce business.

How Do Seller Fees Make Bookkeeping Complicated?

In bookkeeping for eCommerce, you need to know the exact difference between your net and gross sales. Unfortunately, most eCommerce platforms do not send a detailed list of charges, leaving you with only the net sales data.

Amazon, for instance, has several merchant fees but documents all these expenses collectively as "Amazon fees." As a result, it makes financial management, analysis, and planning difficult because you won't know where exactly the money went.

What Solutions Can Help Keep My Books Accurate?

Fortunately, there are solutions to help keep your books accurate in the face of all these tricky merchant fees. These include finding reliable bookkeeping and accounting tools and outsourcing to an experienced bookkeeper or accountant.

  • Bookkeeping and Accounting Software

Technology is a very helpful tool to ease up your online bookkeeping and accounting obligations. Software like A2X and QuickBooks for small businesses are highly recommended for their excellent seller fee tracking features.

An example of these features is integrating the software to a certain eCommerce platform, such as Amazon or Shopify. It will then automatically import your sales, deductions, and fees to save you from the hassle of manual data entry.

best eCommerce bookkeeping services - accounting team at work
  • Outsourcing Bookkeeping Obligations to a Professional Team

If you're concerned with your bookkeeping skills or the amount of time it takes to complete, then hiring an eCommerce bookkeeper or accountant is the best way forward. They are experienced in this area, so they know exactly what fees exist and how to track them down in detail.

In addition, a professional team can help you invest enough time in other important business tasks. Hence, outsourcing for eCommerce bookkeeping services enables you to stay on top of every expense while working on other aspects of your business worry-free.

Seamless Fee Tracking With Unloop's Best eCommerce Bookkeeping Service

As an eCommerce seller, you now know how significant accurate bookkeeping is for your business. You also understand that keeping track of all financial data can be challenging, especially various miscellaneous fees like merchant fees. For these reasons, you want to find a solution that keeps your books accurate and up-to-date.

With Unloop, you can rest easy knowing that we got your back. We aim to be your long-term business partner who shares the same enthusiasm in pushing your business to growth and success. We specialize in bookkeeping for eCommerce and work with partner accounting firms to keep your books accurate and compliant.

Unloop's Bookkeeping Package

We work on bookkeeping, income tax, and sales tax. We know how difficult it can be to track important data when selling internationally on various platforms like Amazon or Shopify. With that in mind, we're ready to assist you with other bookkeeping tasks, such as calculating COGS, dealing with foreign currency transactions, inventory tracking, and profitability analysis.

Upon acquisition of our bookkeeping package, we can help you out with the following:

  • Financial statements such as the monthly income statement, cash flow statement, and balance sheet.
  • Preparation of these statements through accrual accounting.
  • A Hubdoc or DEXT subscription.
  • A Quickbooks Online or Xero subscription.
  • Unlimited financial accounts and associated monthly reconciliations.
  • Expert, unlimited support, and analysis.
  • Three tailored KPI's for Amazon, Shopify, and other platforms.

If you think Unloop fits as a solution to your financial woes and needs, contact us today so we can get started.

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About unloop
Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting.. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.
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