E-commerce bookkeeping looks deceptively simple until you're actually in the weeds of it. The clients who sell through Shopify, Amazon Australia, eBay, Etsy, or their own WooCommerce store generate a class of transactions that sits awkwardly across several areas of the Australian tax system — and the reconciliation challenges are unlike anything you encounter in a bricks-and-mortar retail client.
This guide covers the main pain points I see with e-commerce clients and how to resolve them.
GST on E-Commerce Sales: Who Pays It and When
The GST treatment of online sales depends on who your client is selling to and from where.
Selling to Australian consumers: Standard 10% GST applies on all taxable supplies. This is straightforward. The complexity arrives when your client starts selling internationally.
Exporting goods overseas: Physical goods exported from Australia to overseas customers are GST-free supplies (zero-rated). This means your client doesn't charge GST on the sale, but they can still claim input tax credits on costs related to that supply. The key requirement is evidence of export — customs documentation, freight confirmations, etc. Ensure these are retained.
Digital products and services sold to overseas customers: This is where many e-commerce clients get caught. Under the Digital Economy Package rules that have applied since 2017 and continued into 2026, non-resident businesses selling digital services to Australian consumers are required to register and collect GST. But for Australian businesses selling digital products overseas — ebooks, software, courses, templates — the supply may be GST-free if the overseas customer is not an Australian resident. The evidence requirements here can be tricky and are worth confirming with the client's accountant.
Marketplace operator rules: Platforms like Amazon AU and eBay operate as "marketplace facilitators" and may remit GST on your client's behalf for sales through their platform. This changes the bookkeeping significantly — your client may receive settlement amounts already net of GST, or the platform may issue its own tax invoices to the customer. Check each platform's documentation carefully.
The Platform Fee Problem: Gross vs. Net Settlement
The most common reconciliation headache in e-commerce is platform fees. When Shopify Payments, Stripe, PayPal, or Amazon Marketplace remit funds to your client, they typically send the net amount — gross sales minus their fees and any refunds. This creates a matching problem if you record only what hits the bank account.
Consider a client who makes $10,000 in sales through Shopify in a month. Shopify deducts its payment processing fees ($290) and sends $9,710 to the bank. If you record only the $9,710 bank receipt, you've understated revenue by $290 and missed the fee expense entirely.
The correct approach is to record:
- Revenue: $10,000 (gross sales)
- Payment processing fees: $290 (expense, code to merchant fees or payment processing — check GST treatment of the fee, discussed below)
- Bank receipt: $9,710
Most cloud accounting platforms can handle this with a journal entry or by matching the bank transaction to a batch receipt. The source data is in the platform's settlement reports, which are typically available as CSV downloads.
For GST purposes, Shopify Payments and Stripe are registered in Australia and charge GST on their fees. You can claim input tax credits on these fees, which makes the coding more important — don't just write off the net shortfall as a mystery adjustment.
GST on Overseas Platform Fees
Here's a subtlety that catches many bookkeepers: some overseas platforms that your client uses may not be registered for Australian GST, which means the fee they charge doesn't include GST and your client can't claim an input tax credit. The treatment for imported services consumed in Australia is complex — technically, a GST-registered business purchasing services from an unregistered overseas supplier may have a reverse-charge obligation — but the ATO has practical thresholds that affect when this applies. Confirm with the client's accountant which platforms require this treatment.
Practical approach: flag all overseas platform fees separately in your chart of accounts (e.g., "Overseas merchant fees — no GST") so the accountant can review the total at year end and determine whether any reverse-charge applies.
Handling Refunds and Chargebacks
E-commerce clients issue refunds regularly, and chargebacks (where a bank reverses a transaction following a customer dispute) are a fact of life for many. Both require careful coding.
Refunds: Record against the original revenue account (reducing revenue) and reverse the GST collected. If the platform processes the refund and nets it against the next settlement, the settlement report will show the gross figures — work from the report, not the bank.
Chargebacks: These involve an additional complication — the platform typically also charges a chargeback fee. Record the reversal of the original sale and the chargeback fee separately. If the client disputes the chargeback and wins, record the recovery when the funds are returned.
Inventory and Cost of Goods Sold
E-commerce clients who sell physical products need ongoing inventory management, which affects both the balance sheet and cost of goods sold coding. The two main methods are:
- Perpetual inventory: Stock levels are updated with each sale. Requires integration between the e-commerce platform and accounting software. Accurate but requires setup effort.
- Periodic inventory: Stock is counted periodically and COGS is calculated as opening stock plus purchases minus closing stock. Simpler, but requires a physical count.
For clients on Shopify with a moderate product range (under 500 SKUs), the Shopify–accounting software integration typically handles perpetual inventory automatically. For larger or more complex catalogues, a dedicated inventory management tool (e.g., Cin7, Dear Inventory) is usually warranted.
Reconciliation in Practice
E-commerce bank reconciliation involves reconciling not just the bank account but also each platform's settlement account. Build a reconciliation template that covers:
- Settlement report from each platform (Shopify, Amazon, eBay, etc.)
- Gross revenue per platform vs. recorded revenue
- Platform fees per platform vs. recorded expenses
- Net settlement amount per platform vs. bank receipt
- Outstanding payouts (sales made but not yet settled)
- Refunds and chargebacks processed during the period
This process is more involved than a standard bank reconciliation, but once systematised it becomes a reliable rhythm rather than a monthly scramble.
Summary
E-commerce bookkeeping rewards bookkeepers who understand the platform economics before they start coding. GST treatment depends on whether goods are exported or digital, platform fees need to be grossed up from settlement reports, overseas fees have their own GST considerations, and refunds and chargebacks require careful matching. Build a reconciliation template that works from the platform's own settlement reports and you'll have a far more defensible set of accounts — and fewer surprises at tax time.