Most year-end checklists were written for a service business with one bank account. Yours has five sales channels, inventory in three places, and a CPA who will charge you by the hour to clean up what you skipped.
A generic year-end list tells you to reconcile your bank and gather receipts. For an ecommerce brand running Amazon, Shopify, Walmart, eBay, and TikTok Shop, that list misses the three line items that decide whether your return is right: inventory, cost of goods sold, and the split between marketplace-facilitated and self-collected sales tax. Get those wrong and you either overpay tax on phantom profit or hand your CPA a mess that costs more than the software would have.
Work this in order. Each step depends on the one before it.
Your Amazon dashboard, your Shopify reports, and your bank deposits will not agree, and they are not supposed to. The deposit is net of fees, refunds, ads, and reserves. Before anything else, reconcile each channel's settlement activity to what actually hit the bank.
If your channels do not reconcile to cash, every number downstream is built on sand.
This is the step that separates a real ecommerce close from a hobby ledger. Cost of goods sold has to match what you actually sold, not what you bought.
| ITEM | WRONG (CASH-STYLE) | RIGHT (ACCRUAL + PER-UNIT) |
| Inventory purchase | Expensed when paid | Capitalized as asset until sold |
| COGS timing | When supplier invoice hits | When the unit sells |
| Ending inventory | Estimated or ignored | Counted and reconciled |
| Margin by SKU | Blended guess | Per-unit, accurate |
Sellers who expense inventory at purchase overstate COGS in buying months and understate it in selling months. At year-end that distortion lands directly in taxable income.
For the full year, separate the sales tax the marketplaces collected and remitted from the tax you collected on your own channels and owe yourself. Your sales tax liability account should hold only the self-collected portion. Confirm you filed and remitted everything due on your direct sales, and verify your nexus footprint did not change during the year.
The P&L gets all the attention; the balance sheet is where errors hide.
If you paid contractors, you likely owe 1099-NEC forms. Gather W-9s, confirm amounts paid, and note the filing deadline early. This is separate from the 1099-K forms you receive from marketplaces and processors. The full mechanics are in /blog-posts/prepare-1099s-ecommerce-business.
Your accountant should receive a clean set, not a shoebox. A tight package cuts their hours and your bill.
A service business reconciles one income stream. You reconcile five settlement feeds, each with its own fee structure, refund timing, reserve behavior, and tax treatment, then tie them to inventory that moves across locations. Doing this by hand in spreadsheets is where January disappears.
ConnectBooks runs this layer continuously, not just at year-end. It syncs Amazon, Shopify, Walmart, eBay, and TikTok Shop settlements into QuickBooks Online, QuickBooks Desktop, or Xero, applies FIFO COGS per unit, tracks inventory across FBA, 3PL, and your warehouse, and separates marketplace-facilitator from self-collected sales tax. The year-end close becomes a review instead of a rebuild. Plans start at $149/mo.
| NEXT STEPTurn year-end from a rebuild into a review. ConnectBooks keeps COGS, inventory, and sales tax reconciled all year, starting at $149/mo. See /pricing. |
Start the structural work in December, not after the new year. Confirm your channels reconcile to the bank, schedule an inventory count for or near December 31, and gather contractor W-9s. The actual close happens in January, but the inventory count and the channel reconciliations are far easier if you set them up before the year ends.
Expensing inventory when they buy it instead of when they sell it. That inflates costs in heavy purchasing months and understates them later, so taxable income for the year is wrong. The fix is to capitalize inventory as an asset and recognize cost of goods sold per unit as units sell, ideally on FIFO.
Yes. The marketplaces remit tax on their facilitated sales, but you still need to confirm that, and you must separately reconcile and remit the tax you collected on your own channels like Shopify. Your liability account should reflect only the self-collected portion, and your filings on direct sales should be current.
Count or confirm units in every location you hold them: FBA, third-party logistics, your own warehouse, and units in transit that you own. Multiply by per-unit cost using a consistent method such as FIFO, and reconcile the total to the inventory asset on your balance sheet. Multi-location tracking is exactly where manual spreadsheets break down.
A reconciled P&L and balance sheet, a per-channel sales and fee summary, an ending inventory valuation by location, a sales tax summary split into facilitated and self-collected, a fixed-asset purchase list, your 1099 contractor amounts, and notes on anything unusual during the year. A clean package lowers their hours and your fee.
Clean, accurate books make this manageable. Start a free trial of ConnectBooks to get settlement-level accuracy and real margin visibility for your ecommerce business. No credit card required.
Running an e-commerce business comes with plenty of challenges, but ConnectBooks is here to make your life easier. With real-time insights, seamless integrations, and detailed tracking of your profitability and inventory, you can stay ahead of the game. Whether you’re selling on Amazon, Shopify, Walmart, TikTok or eBay, ConnectBooks helps you manage your finances with 100% accuracy and confidence, so you can focus on growing your business.
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