The answer first
Online sellers often look only at what lands in the bank account. But a platform payout is a net figure: sales, minus fees, refunds, chargebacks and reserves, often across currencies. To produce accurate accounts, and pass the audit, each element needs to be recorded separately and reconciled.
Record gross sales and platform fees separately; do not book net payouts as revenue. Reconcile each platform's reports to the bank every month, and keep platform reports and order data for at least 7 years.
At a glance
- Revenue
- Record gross sales, not net payouts
- Reconcile
- Every platform, every month
- Stock
- Count at least at year end
- Keep records
- At least 7 years, including platform reports
What makes up a payout
| Component | How to record |
|---|---|
| Gross sales | Revenue, by sales channel |
| Platform commission and payment fees | Selling expenses |
| Refunds and returns | Reduction of revenue |
| Chargebacks | Reduction of revenue or loss, with supporting evidence |
| Reserves held by the platform | Receivable from the platform until released |
| Shipping charged to customers and paid to carriers | Revenue and cost, recorded separately |
| Currency conversion | Exchange difference recorded when converted |
Monthly routine
- Download settlement reports from each platform and payment provider.
- Post summary entries: gross sales, fees, refunds, reserves.
- Match payouts to the bank statement.
- Reconcile inventory movements with orders and stock records.
- Review unusual items: large refunds, chargebacks, held funds.
Key takeawayInventory is where e-commerce accounts most often go wrong. Count stock at least at year end and reconcile it to sales records.
Tax points to watch
- Where your profits arise depends on where you carry out the operations that earn them; selling online to overseas customers does not by itself make profits offshore.
- Overseas marketplaces and warehouses may create tax or VAT obligations in other countries.
- Payment platforms report to banks and authorities; keep your records consistent with their data.
Please noteCross-border online selling can create obligations in other jurisdictions, such as VAT or GST registration. Take advice on each market you sell into.
Choosing systems
| Need | What to look for |
|---|---|
| Accounting software | Multi-currency support and integrations with your platforms and payment providers |
| Sales integration | Summary postings by settlement period, not one entry per order |
| Inventory | Stock tracking that matches your fulfilment model (own stock, third-party warehouse or dropship) |
| Documents | Automated capture of invoices, receipts and platform statements |
| Controls | User permissions and an audit trail |
Self-check: where do you stand?
| Question | If the answer is no |
|---|---|
| Do you record gross sales and fees separately? | Change your bookkeeping approach |
| Are payouts reconciled to platform reports monthly? | Start a monthly reconciliation |
| Do you count and reconcile stock? | Count at least at year end |
| Do you keep platform reports for 7 years? | Download and archive them monthly |
| Do you know your obligations in overseas markets? | Take local advice |
How DBMS Global can help
- Bookkeeping set-up for multi-platform and multi-currency sales.
- Monthly reconciliations and management accounts.
- Audit-ready year-end accounts and tax returns.
In summary
- Book gross, not net.
- Reconcile monthly.
- Keep the platform data.
Official references
- Companies Ordinance (Cap. 622), section 373: accounting records
- Inland Revenue Ordinance (Cap. 112), section 51C: business records