Set up the ledger before you connect anything
A new channel goes into the books without a mess when the chart of accounts, the clearing account, the tax treatment, and the SKU mapping exist before the first order syncs. Connect first and fix later, and the first month's transactions land in whatever accounts the sync could find, which is usually one income line called "Sales" and one expense line called "Fees." Untangling that is more work than the setup, and it recurs at every close until someone does the setup anyway. The checklist below runs in four phases. Every step has a test for when it is done.
The same list applies whether the new connection is a marketplace or an operations tool that feeds the ledger. ConnectBooks' integration pages cover Amazon, Shopify, Walmart, eBay, TikTok Shop, and Temu, along with shipping, order management, and inventory tools, and each of those connections goes through these same four phases.
Phase one: before connecting
- Add the channel's accounts to the chart of accounts. At minimum: a sales income account for the channel, a refunds contra-income account, and one expense account per fee type the channel charges. Amazon needs referral, fulfillment, storage, and advertising at least. A marketplace that pays sellers on a settlement cycle also needs a clearing account (step two). Use classes or tracking categories if you prefer one income account across channels, but the fee split has to exist somewhere. Done when: every line on the channel's sample settlement report has a named account to land in.
- Create the clearing account. Marketplaces pay in settlements that never line up with sales periods. Sales post when they happen; cash arrives later, net of fees. The clearing account (a current asset) holds the difference. Done when: the account exists, and the accountant can say in one sentence what its balance should equal at month end (unsettled sales less unsettled fees).
- Decide the tax treatment. Most US marketplaces collect and remit sales tax under marketplace facilitator laws, which means the tax on the settlement is not your liability and should not post to your sales tax payable. Some channels and some jurisdictions differ. Confirm with your CPA or the state's Department of Revenue which applies, and set the sync to post marketplace-collected tax to a pass-through account, not a liability. Done when: you can point to the line on the settlement where tax appears and name the account it will post to.
- Map SKUs. The channel's item identifiers (ASINs, listing IDs, variant IDs) have to map to the SKUs the ledger costs. Bundles and multipacks need a mapping to their component SKUs so COGS relieves the right units. Done when: every active listing on the channel resolves to a costed SKU, and the list of unmapped listings is empty.
- Confirm landed cost exists for every mapped SKU. A SKU with no cost will post sales with no COGS, and margin for the channel will read as gross revenue. Done when: an inventory valuation report shows a non-zero unit cost for every SKU the channel sells.
Phase two: connecting
- Choose the historical window. Decide how far back the sync should pull. Going back to the start of the fiscal year keeps the year consistent. Going back further creates duplicates if those periods were already booked by hand. The ConnectBooks pricing FAQ states that transactions can be downloaded up to 18 months back, with the first six weeks before signup included at no charge. Done when: the start date is written down and any manual entries in the overlap period have been identified for reversal.
- Run the first settlement and tie it out by hand. Take the first settlement the sync posts and reconcile it on paper against the marketplace's own settlement report.
Illustrative numbers. A first settlement deposits $18,432.10. The report shows sales of $24,110.00, refunds of $610.50, fees of $4,822.40, and a reserve held of $245.00. Check: $24,110.00 minus $610.50 is $23,499.50; minus $4,822.40 is $18,677.10; minus $245.00 is $18,432.10. It ties. Now confirm each of those four figures posted to the account planned in step one, and that the $245.00 reserve sits in the clearing account, not in fees.
Done when: the deposit in the bank feed matches the settlement to the penny, and every component is in its planned account.
- Check the tax line on that first settlement. Marketplace-collected tax should have posted to the pass-through account from step three, not to income and not to sales tax payable. Done when: the sales tax payable account did not move as a result of the settlement.
Phase three: first close
- Reconcile the channel to the bank deposit. Every deposit from the channel in the month matches a settlement, and the clearing account balance at month end equals the sales and fees from orders not yet settled. Done when: the clearing balance can be rebuilt from the open settlement period with no unexplained residue.
- Check COGS relief. Units sold on the channel per its order report, valued at FIFO, equals the COGS posted for the channel. Done when: the unit count in the order report and the unit count relieved from inventory agree, and any gap is a named list (free replacements, samples, unmapped SKUs).
- Review fee categorization. Read the fee accounts line by line for the first month. New channels have fee types that the setup did not anticipate, and the sync will have put them somewhere. Done when: no fee account contains a fee type that belongs in a different account, and any new fee type has its own account or a deliberate decision to group it.
- Compare channel margin to expectation. Revenue less refunds, fees, and COGS for the channel, as a percentage. If the figure is far from what the channel's fee schedule and your product margins predict, one of steps four, five, or eleven is wrong. Done when: the margin is within a few points of the pre-launch estimate, or the difference has a named cause.
The longest version of this phase, for a channel with its own settlement quirks, is in Temu and QuickBooks. The steps are the same. The surprises are channel-specific.
Phase four: ongoing
- Set the cadence. Settlements reconcile as they arrive. The clearing account, COGS relief, and fee review happen at every monthly close. The SKU mapping check runs whenever listings are added. Done when: the tasks are on a calendar with an owner, not in someone's head.
- Define exception handling. Decide in advance what happens when a settlement does not tie: who investigates, within how many days, and whether the close waits. Reimbursements, chargebacks, and reserve releases are the usual causes, and each has a standard treatment once someone has seen it twice. Done when: the last three exceptions were resolved by following a written rule rather than by improvising.
What the setup buys you
A channel connected this way produces a clean channel P&L from its first full month, and the second month's close takes a fraction of the first. ConnectBooks reconciles settlements from six marketplaces into QuickBooks or Xero at the transaction level, with COGS relieved at FIFO and fees split by type, which covers phases two and three for those channels. The chart of accounts, the tax decision, and the calendar are still yours. If you want to see the setup on your own channels before committing, book a demo.
Fourteen steps. Do the first five before you touch the connection.
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