Record gross sales, not payouts
Each platform provides a payout report that lists orders, fees, refunds and the net transfer. Use it to record gross sales as income and each fee as an expense. If you only record the net deposit, your revenue is understated, your expenses are hidden and your margin looks better than it is.
Many sellers use a connector app that summarizes each payout into one entry. That is fine as long as you spot-check the totals against the platform report every month.
Cost of goods and inventory
Cost of goods sold includes the product cost, inbound freight, packaging that goes with the item and often fulfillment fees. Keep purchase invoices from suppliers. At least once a year, count your stock and compare the value with what your books say. If you use a method like first in, first out, apply it consistently. Products sitting at a warehouse such as an Amazon fulfillment center are still your inventory.
Refunds, chargebacks and returns
A refund reduces income, and the returned item may go back into inventory or be written off if it is damaged. Chargebacks involve a withdrawal plus a fee. Keep them in their own accounts so you can see how often they happen. A rising refund rate on one product is a quality signal long before the profit report shows it.
Sales tax across states
Selling to customers in other states can create sales tax obligations, and marketplaces sometimes collect and remit on your behalf. Do not assume. For each channel, check whether the marketplace collects tax, and whether your own website sales trigger registration in any state. The rules and thresholds change, so confirm with the state tax agencies or a CPA. Record collected tax as a liability, never as sales.
Fees, ads and the monthly checklist
Separate platform fees, payment processing fees, shipping costs, advertising and software subscriptions. A monthly checklist could be: download each payout report, reconcile it to the bank, update inventory, review ad spend against sales, and file any tax due. Track profit by channel if you sell in more than one place, because a marketplace with high fees may not deserve the same attention as your own store.
Handling multiple channels without losing track
If you sell on your own website, a marketplace and in person, create a revenue account or tracking tag for each channel. This lets you compare margin after fees, shipping and ads. A product that sells well on one channel can be a loser on another once costs are included.
Keep one folder per month with payout reports, ad invoices and supplier bills. When something looks off in the reconciliation, you can find the order or payout quickly. Also record holds or reserves a platform keeps from your balance as a receivable, so cash that is merely delayed does not look like a loss.
Common questions
Do I need inventory tracking in my accounting software?
If you carry meaningful stock, yes, or a reliable spreadsheet that feeds a monthly adjustment. Without it, cost of goods will be a guess.
Are shipping labels an expense?
Yes, usually part of cost of goods or a shipping expense line. Charges you collect from the customer for shipping are income.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.