Ecommerce accounting with contribution margin by SKU and channel

A payout lands in the bank.

It gets treated as the sale. Processing fees, refunds, and chargebacks are already netted out of it, so your revenue line is wrong and your margin line is worse.

A payout is not a sale. Gross sales are reconciled to net deposits with fees, refunds, and chargebacks each broken out on their own line.

You are deciding whether to reorder.

You look at what is in the bank and what is selling, and commit six figures to inventory without knowing the landed margin on the unit.

Inventory and COGS are tied to landed cost including freight and duty, so the reorder decision starts from the margin rather than the revenue.

Blended ROAS looks acceptable.

One channel is losing money on every order and the average is hiding it, so you keep funding the thing that is draining you.

Contribution margin is calculated per channel and per SKU after ad spend, returns, merchant fees, and fulfillment. The loser is named.

A buyer or a lender runs diligence.

The books are cash-basis, inventory was never valued properly, and the adjusted number you pitched does not survive the first week.

Accrual books have been maintained monthly and inventory has been valued consistently, so diligence tests the business rather than the bookkeeping.

• Payout reconciliation across channelsGross sales reconciled to net deposits across Shopify, Amazon, Stripe, Walmart, and TikTok Shop, with processing fees, refunds, and chargebacks separated rather than netted.
• A2X and QuickBooks OnlineSettlement data mapped through A2X into QuickBooks Online, so the books reflect the settlement detail instead of a lump deposit.
• Accrual basis, maintained monthlyBooks kept on accrual through the year rather than converted once at year end, which is what makes margin by period meaningful.
• Landed cost and inventory valuationFreight, duty, and inbound fulfillment capitalized into unit cost, with inventory valued consistently and COGS recognized in the right period.
• Amazon FBA fees and reimbursementsFBA fee categories reconciled and reimbursement claims tracked, so recoveries are recorded rather than disappearing into a settlement line.
• Contribution margin by SKU and channelMargin after ad spend, returns, merchant fees, and fulfillment, calculated at the level where you make decisions.
• Multi-state sales taxNexus monitored as thresholds approach, with marketplace facilitator rules applied so you are not filing where the platform already remitted.
• Deferred revenueSubscriptions and pre-orders recognized when the obligation is delivered rather than when the card is charged.

Brands that sell get diligenced on inventory accounting and revenue recognition before anything else. Keeping the books to that standard from the start is a different job from keeping you compliant, and it is considerably cheaper than reconstructing three years of history under LOI.

‍

Our quality of earnings team runs sell-side diligence, so we know what the buyer's team will test and we keep the records in a form that answers it.