Settlement reconciliation is where most books break
A Shopify or Amazon payout is a net number. Inside it sit gross sales, refunds, chargebacks, marketplace fees, advertising, shipping labels, fulfilment charges and sales tax collected on your behalf. Booking the payout as revenue understates both revenue and expense, destroys gross margin visibility, and misstates the sales tax liability.
We break each settlement into its components and post them to the right accounts, every cycle, across every channel. The result is a P&L where gross margin means something and advertising sits where you can measure it against contribution.
Inventory and cost of goods sold
Inventory is the largest asset on most e-commerce balance sheets and the one most often wrong. Landed cost has to include freight, duty and tariffs, not just the supplier invoice. Units have to be tracked across your own warehouse, third-party logistics providers and marketplace fulfilment centres.
- Landed cost calculation including freight, duty and customs
- COGS recognised on sale rather than on purchase
- Reconciliation between the inventory system and the ledger every month
- Treatment of damaged, returned and unsellable stock
- Cash flow planning around purchase order cycles and supplier terms
Sales tax nexus across states
Economic nexus thresholds vary by state and are triggered by revenue, transaction count, or both. Physical nexus is triggered by inventory, which means storing stock in a marketplace fulfilment network can create an obligation in a state you have no other connection to.
Marketplace facilitator rules shift collection responsibility to the marketplace for sales made through it, but they do not necessarily remove your registration or filing obligation, and they never cover your direct-to-consumer channel. We map exposure across both, register where required, and file on the calendar each state sets.
The metric that matters
Revenue growth on its own tells you nothing in this industry. Contribution margin after cost of goods, fulfilment, payment processing and advertising, calculated per channel and per SKU, tells you which products are funding the business and which are quietly consuming it. That is the number we build the reporting around.
Frequently asked questions
We sell on Amazon, Shopify and TikTok Shop. Can you handle all three?
Yes. Multi-channel is the normal case, and the reconciliation approach is the same: decompose each settlement, post the components, tie back to the platform report.
Do we owe sales tax if Amazon collects it for us?
Amazon collects and remits on marketplace sales under facilitator rules, but you may still need to register and file returns reporting those sales, and you are fully responsible for tax on your own storefront. The answer is state specific.
How do you handle inventory held by a 3PL?
It stays on your balance sheet and it can create physical nexus in the state where the warehouse sits. We track it by location and factor it into the nexus map.