What gets included in your eCommerce deposit

This email contains referral links. See my disclosures.

Hi Reader,

I received a great reader question the other day:

The answer is yes.

Cash basis accounting means you generally record income when you receive the money and expenses when you pay them. But it does not mean your bookkeeping should only show the lump-sum deposit that hit your bank account.

What Is Really Inside That Deposit?

For example, if Shopify deposits $850 into your bank account, that deposit may actually include:

• product sales
• shipping income collected from customers
• sales tax collected
• refunds
• processing fees
• app fees, adjustments, chargebacks, or other payout activity

If you record the full $850 as sales, your income will likely be wrong, your expenses may be missing, and your sales tax liability may not be tracked correctly.

In other words, recording only the deposit means you are missing the full picture of what happened in your business.

Why This Matters Even More for Shopify Sellers

This is especially important for platforms like Shopify because Shopify is not a marketplace in the same way Etsy, Amazon, or eBay are.

In many cases, you are the seller responsible for collecting and remitting sales tax when required.

That means sales tax collected through your Shopify store is not really “income.” It is money you may owe to the state. If you only record the net deposit, that sales tax liability can get lost in the shuffle.

Do Not Forget About the 1099-K

There is another big reason to keep the breakdowns: 1099-K matching.

At year-end, your 1099-K will report gross payment amounts, not your net bank deposits. So if your books only show the net deposits, you may find yourself scratching your head trying to match your bookkeeping records to your 1099-K.

And honestly? Anything you can do now to make tax filing easier later is a win.

This Is Exactly Why Office Hours Exists

Questions like this are exactly why I started Bookkeeping Office Hours.

So many small business owners are doing their own ecommerce bookkeeping, and you are smart enough to figure out a lot of it. But that does not mean you won’t have questions.

For example:

• What do you do when you go to reconcile your bank account and QuickBooks says you have a beginning balance error?
• How should you record fees when you have multiple Shopify payment options enabled?
• Why is your Etsy Holding account not balancing this month?
• What does it mean if you see a negative amount on your Balance Sheet?

And how is a business owner supposed to know all of this without having an accounting degree or years of QuickBooks experience?

How Bookkeeping Office Hours Helps

That is where Bookkeeping Office Hours comes in.

Office Hours happens three times a month for one hour. You can log on when you are able, ask your questions, and learn from the questions other business owners are asking too.

It is also a great accountability tool.

Sometimes knowing you have a place to ask questions is the little push you need to actually move forward.

Maybe you want to get your first Amazon journal entry posted before Office Hours so you can make sure you did it correctly. Maybe you have been avoiding your Shopify payouts because you are not sure where all the fees go. Maybe you just need someone to tell you, “Yes, that looks right,” or “Nope, let’s fix that before it snowballs.”

That is exactly what Office Hours is for.

Want Help without Hiring a Full-Time Bookkeeper?

If you are doing your own bookkeeping but would like a little support along the way, take a look and see if Bookkeeping Office Hours might be a good fit for you.

There is a short application to fill out, mainly because I want to make sure I am the right person to help with your specific bookkeeping questions.

Recommended Resources

Don’t wait until tax time to solve your bookkeeping problems. Join Bookkeeping Office Hours now, and gain peace of mind before year-end!

---

Small Business Updates

Do not blindly trust the bank feed.

QuickBooks may be getting smarter with enhanced bank feeds and AI tools, but your bookkeeping still needs human review. Before you click “Add,” ask: Is this income, an expense, a transfer, a loan payment, or owner pay? QuickBooks can help, but it does not know your business the way you do.

Try the new Chart of Accounts lock feature.

If you have a more complicated Chart of Accounts, account locking may help prevent mistakes. For example, if you have a parent category like “Advertising” with subcategories underneath it, you may not want transactions posted directly to the parent account. In that case, you can lock that account from use. I am really liking this feature.

PDF statement uploads may save you time.

One helpful update I have been seeing is the ability to upload a PDF or image of bank or credit card transaction activity instead of needing a perfectly formatted CSV file. This can be especially helpful if your bank or credit card does not connect well to QuickBooks, or if the electronic feed is missing older transactions. Just make sure to review everything carefully before accepting it into your books.

On a Personal Note

I’m really trying to embrace a summer slow-down vibe this year. I’ve mapped out a reduced work schedule, and I’m trying to say yes as often as I can when my big kids want to go for a walk, play croquet in the yard, or play a board game. I’m relaxing after dinner, reading good books on the porch, and enjoying the summer evenings. To accomplish this, I have to be super focused during my work hours. It’s like I have to retrain myself to stay focused every so often! How about you? Do you try to reduce your summer work hours?

Talk soon,
Sarah