Year-End Ecommerce Accounting Checklist: What to Close, Track, and Report

Did you know that nearly 60% of ecommerce businesses miss tax deadlines due to sloppy year‑end accounting? That’s a big deal. Without clean records, you risk overpaying taxes, failing audits, or losing insights into your business performance.

Let’s walk through a simple yet powerful year‑end checklist. That way, your ecommerce finances close smoothly—and you start the new year ahead.

 

Table of Contents

 

1. Close Open Sales Channels

2. Reconcile Inventory and Cost of Goods Sold

3. Match Bank, Payment, and Platform Records

4. Review Sales Tax Collected and Paid

5. Record end‑of‑year Expenses and Prepaids

6. Track Depreciation and Fixed Assets

7. Evaluate Pre‑Paid Subscriptions and Fees

8. Prepare Financial Statements

9. Consult With an Ecommerce Accountant Near You

10. FAQs

11. Conclusion

 

Close Open Sales Channels

 

Do you still have active listings or orders from last year? Check every channel—Shopify, Amazon, eBay—to ensure all transactions that belong to the old year are recorded. That means no uncounted sales or refunds sneaking into next year’s books.

 

Clean closing of each channel sets a firm starting point for the new year.

 

Reconcile Inventory and Cost of Goods Sold (COGS)

 

Inventory is one of the trickiest areas for ecommerce businesses. Overstate it, and your profit shrinks. Understate it, and taxes may go up.

 

Next, count items at year‑end and compare that to your records. Then, calculate COGS using your accounting software. This ensures expense accuracy for income tax and business insights.

 

Match Bank, Payment, and Platform Records

 

Mismatched financial data is a common issue in ecommerce. Ensure your bank statements align with PayPal or Stripe reports, then cross-check them against your ecommerce sales records.

Investigate any discrepancies right away to avoid errors. Accurate matching helps you catch missing transactions and prevents double counting.

 

This simple step keeps your records clean and ensures your year-end financials and tax filings stay accurate.

 

Review Sales Tax Collected and Paid

 

Ecommerce transactions often cross state or national lines, making sales tax compliance more complex. At year-end, it’s essential to gather sales tax reports generated by your ecommerce platform.

 

These reports must be carefully reviewed and compared against what was actually filed with local and state tax authorities. Discrepancies—either underpayments or overpayments—can easily be missed without this review.

If your records don’t match the filings, your year-end financials may be inaccurate. This misalignment can create issues later, especially during audits or future tax filings.

 

Addressing these inconsistencies early helps you avoid last-minute surprises and ensures compliance with multi-jurisdictional tax obligations.

 

Record End of Year Expenses and Prepaids

 

Year-end often includes expenses that belong to the current year and prepayments that apply to the next. For example, December advertising charges or annual software subscriptions may straddle two accounting periods. You should classify any expenses clearly related to 2024 in the 2024 books and treat those meant for 2025 as prepaid assets.

 

Failing to separate them properly can distort your profit and loss statements. Overstating expenses in one year or underreporting in the next may affect tax liability and financial analysis.

Remember, clear classification keeps reporting transparent and compliant with accepted accounting principles.

 

Track Depreciation and Fixed Assets

 

If you’ve purchased long-term assets such as computers, furniture, or specialized equipment, these cannot be written off in full immediately. Instead, they must be depreciated over time. Begin by recording the acquisition of each fixed asset and assigning it a depreciation schedule based on IRS guidelines.

 

Whether you use straight-line or accelerated depreciation, maintaining accurate records ensures you neither miss out on deductions nor overstate them.

Proper tracking also helps you understand the remaining value of your assets and supports both financial reporting and tax planning.

 

Evaluate Prepaid Subscriptions and Fees

 

Ecommerce operations often depend on annual subscriptions—such as ERP software, marketing tools, or seller platforms. These prepaid services can span multiple fiscal years. It’s important to retain all relevant invoices and break down the fees according to the periods they apply to.

This ensures accurate reporting in your bookkeeping and prevents the entire amount from being allocated to a single year. Misreporting these costs can distort financial statements and complicate tax filings.

 

Accurate categorization of prepaid expenses leads to cleaner financials and fewer corrections later.

 

Prepare Financial Statements

 

Now that your financial data is clean and complete, it’s time to generate key reports. Start with your Profit & Loss (P&L) statement, Balance Sheet, and Cash Flow Statement to get a full financial picture.

Review each report carefully. Look for any irregularities such as inconsistent margins or unexpected liabilities. These may indicate input errors or business issues that need attention.

 

These statements aren’t just for your records. They play a vital role in tax filing, securing financing, and investor presentations.

 

Consult an Ecommerce Accountant Near You

 

Even the best tools can miss platform‑specific quirks, tax changes, or multi‑state issues. A professional with ecommerce account management experience can catch these:

1. Missing platform fees

2. Sales tax nuances

3. Inventory accounting strategies

4. International shipping and tax treatment

 

Engage an ecommerce accountant near you before the year closes. They’ll confirm accuracy and help you take advantage of last‑minute planning opportunities.

 

FAQs

 

1. Should I close financials by December 31 or after returns arrive?

Close your books with entries posted through December 31. Future filings or returns should relate back to that cutoff. That creates a clear separation of reporting periods.

2. Can I delay depreciation until tax season?

Yes, but it’s cleaner to set depreciation schedules in real time. That helps monthly reporting and keeps records ready for audits or financial reviews throughout the year.\

3. Do I need to re-count inventory each year‑end?

Yes, if physical inventory is material to your business. A count once a year helps verify records and prevents unseen shrinkage or data errors.

4. What if I miss a year‑end expense?

Amend your books early in January. Avoid waiting until tax filing. That minimizes corrections and streamlines your current year’s accounting.

5. How often should I meet with my accountant?

Monthly reviews are ideal for growing ecommerce businesses. At minimum, meet quarterly. Year‑end meetings ensure compliance, deductions, and clean tax filing.

 

Takeaways

 

Closing the year right helps your ecommerce business stay on track, compliant, and ready to grow. Use this checklist to close channels, reconcile inventories, record expenses correctly, and prepare clean financial statements.

If you want full support in ecommerce account management, consider hiring an ecommerce accountant near you—someone who knows your platforms and local tax rules. That peace of mind is invaluable.

 

For expert help planning your year‑end and filing accurately, reach out to Anu Agrawal CPA Inc. We support ecommerce owners with reliable, platform‑savvy accounting that frees you to focus on what you do best—growing your store.