Black Friday and Cyber Monday can bring your biggest sales days of the year. They can also bring your messiest books. Hundreds of orders, discount codes, platform fees, refunds and shipping costs pile up fast, and January is a bad time to untangle them.
Good e-commerce bookkeeping before the rush means you'll know exactly what you earned, not just what you sold. Here's how to prepare.
1. Clean up your books before the rush
Reconcile your bank, credit card and payment processor accounts through October now. Starting the holiday season with clean books makes it much easier to spot problems when volume spikes.
2. Connect your sales channels to your accounting software
If you sell on Shopify, Amazon, Etsy or your own website, connect each channel to QuickBooks Online or Xero, either directly or through an integration app. Manual entry for hundreds of holiday orders invites errors. Test the connection now with a few orders so you know it's recording sales, fees and refunds correctly.
3. Track gross sales, not just deposits
Your platform deposits are not your sales. Payouts arrive after fees, refunds and reserves are taken out. Record the full sale amount as income and the fees as an expense. This gives you accurate revenue numbers and makes sure you deduct every fee you paid. We'll explain this in more detail in Friday's post on payouts.
4. Plan for discounts and promotions
Decide how you'll record discount codes and "buy one, get one" deals before the sale starts. Most sellers record the discount as a reduction of sales so profit reports stay accurate. Know your margins too: a 30% discount on a product with a 35% margin leaves very little profit after shipping and fees.
5. Get your inventory counts right
Count your inventory before Black Friday and make sure your records match. Accurate counts prevent overselling and help you reorder bestsellers in time. After the sale, your inventory numbers drive your cost of goods sold, which directly affects your profit.
6. Know your sales tax obligations
Holiday sales can push you over a state's economic nexus threshold, which may mean you need to register and collect sales tax there. Check where your customers are and how much you've sold into each state. Our sales tax services help online sellers stay compliant across states.
7. Set money aside for returns and taxes
Holiday returns often roll in through January. Keep a cushion in your account for refunds, and set aside a portion of holiday profits for income and sales taxes so a strong season doesn't turn into a surprise tax bill.
For more ways to protect your cash, read 5 cash flow mistakes small business owners make.
Frequently asked questions
Should I record sales from Shopify or Amazon as the payout amount?
No. Record the gross sale as income and the platform fees as expenses. Recording only payouts understates your revenue and hides deductible fees.
How do I handle holiday returns in my books?
Record refunds as a reduction of sales in the month they happen, and restock returned items in your inventory if they can be resold.
Do I need to collect sales tax in other states?
It depends on where your customers are and how much you sell into each state. Many states require registration once you pass a sales or transaction threshold.
Make this your most profitable holiday season
Ms. Accountability helps e-commerce sellers keep clean books through the busiest season of the year, from sales channel setup to sales tax filing. Prefer to track it yourself? Our Small Business Bookkeeping Tracker is a simple way to stay organized.
Book your free consultation and head into Black Friday knowing your numbers.