If your e-commerce business sells through several platforms, the bank deposits will usually be lower than the sales totals. Fees, refunds, tax and money held back explain the difference. Reconciliation means checking those movements against the platform reports and your accounts, so each deposit and any remaining balance can be explained.
Should you record orders or payout summaries?
Some connections record individual orders in your accounting software. Others group transactions into payout or period summaries. Choose the detail you need for customer balances, stock, VAT and reporting, and check how the connection handles adjustments.
Payout summaries can reduce the number of entries while keeping sales, fees, refunds and tax separate. Tools such as A2X and Link My Books can support this approach. The account and tax settings still need checking, and you must retain the underlying records. An imported entry needs to be reconciled, just like one entered by hand.
| Approach | What goes into the accounts | Checks you still need |
|---|---|---|
| Individual orders | What goes into the accountsEach order and the adjustments supported by the connection. | Checks you still needMatch the payment provider's balance, fees, refunds and payouts. Check for duplicate sales. |
| Payout summaries | What goes into the accountsGrouped transactions, split between the appropriate sales, fee and tax accounts. | Checks you still needCheck the settings, underlying records, bank deposit and amounts carried into the next payout. |
What to check in each payout
Start with the platform's settlement report and identify each movement. The posting in your accounts must balance, and the amount transferred should agree to the bank after any separately recorded currency conversion or bank charges. Check:
- Sales and VAT: separate sales income from any VAT liability. Check whether the platform or your business is responsible for the VAT on each type of sale.
- Fees and refunds: identify the relevant charges and reversals, including their VAT treatment, and check that they have only been recorded once.
- Money held by the platform: carry forward any balance still due to your business and reconcile it when released or adjusted.
- Transfers and currency differences: match the payout reference to the deposit and explain any conversion or bank charges.
- The remaining balance: agree the amount still due from, or owed to, the platform to its statement.
A reserve is money the platform has held back. Where it remains due to your business, record it as a balance owed to you and check what happens to it in later settlements. Its eventual release is a transfer of money already recorded, rather than another sale.
Checks for each sales channel
Amazon
Use each settlement report to identify sales, refunds, fulfilment, storage, advertising and reserve movements. Separate VAT for which Amazon is responsible from VAT your business must account for. Check the actual settlement dates and any amounts held over.
Shopify
Check Shopify Payments payout details against the bank, including fees, refunds and adjustments. The payout schedule depends on your account settings and location. Orders paid through another provider may settle separately, so trace those payments through the provider that collected them. Your tax setup and the countries involved determine who accounts for VAT.
eBay
Compare the payments report with fees, refunds, advertising charges and each bank deposit. If a charge also appears on an invoice, check whether it is already included in the payout records before posting it again.
Etsy
Reconcile the payment account, including listing, transaction, processing and advertising fees. Check the deposit schedule in your account and any reserve. Identify taxes collected by Etsy separately from the VAT your business must report.
The month-end checklist
- Match payouts received to bank deposits and identify transfers still on their way at month-end.
- Marketplace reserve balances agree to the platform statement at month-end.
- Update stock for purchases, sales and returns. Check costs and any reduction needed for damaged or unsaleable items.
- Compare gross margin with prior months, including by channel where the records support it.
- Reconcile UK VAT to sales and purchase records, including adjustments and marketplace-collected VAT. Check the VAT period required by the tax-point rules and any accounting scheme used; the payout date alone does not decide it.
- Where applicable, reconcile the records for the EU One Stop Shop (OSS) and Import One Stop Shop (IOSS). See our OSS/IOSS guide for the return requirements.
- Advertising costs are recorded in the correct accounting period, including any accruals or prepayments.
- Record refunds against the relevant sales, including any VAT adjustment.
- Exchange-rate differences on foreign-currency payouts have been recognised.
- A profit and loss report by channel is reviewed where the records support that breakdown.
FAQs
Should I sync every order into Xero or QuickBooks?
It depends on the detail you need in the accounting system. Order-level records can be useful, while payout summaries can reduce the number of entries. Either approach needs the fees, refunds, tax and amounts held by the platform to be reconciled. Keep the underlying order records when using summaries.
What is the difference between A2X and Link My Books?
Both are examples of software used to transfer marketplace accounting summaries. Compare support for your sales channels, accounting software, currencies and VAT arrangements. Check the current features and subscription terms, then test an actual payout before relying on the connection.
How do I reconcile Shopify Payments to my bank?
Open the payout details in Shopify and compare the included transactions, fees, refunds and adjustments with the bank deposit. Check any currency conversion and amounts still awaiting payout. Reconcile other payment providers separately so the same sale is not recorded twice.
What should a month-end check include for a multi-channel e-commerce business?
Check that payouts match the bank, amounts held by platforms agree to their statements, stock and refunds are recorded in the right period, and VAT agrees to the relevant records and returns. Review profit by channel where the records support it. Agree the reporting date around the information available.
Sources and software guidance
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HMRC: Keeping VAT records
VAT records and the time of supply, also called the tax point.
-
Shopify: Payout details and transaction exports
Where to find payout transactions, fees, adjustments and reserves.
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A2X: Posting and reconciling summaries
Reviewing account and tax settings and matching entries to bank deposits.