The online selling platform speaks a whole different language from traditional businesses. From programming the perfect website to importing products into your online store, eCommerce accounting is not exempted from speaking this same language.
Traditional bookkeeping or accounting is less complex for the reason that most accounts are tangible and easily trackable. But for eCommerce businesses, assets are mostly on the virtual platform so it can be easy to overlook the costs.
Ecommerce accounting has its own set of unique challenges and these are the top ones to look out for:

Complex Inventory Management

With so much going on from selling on multiple channels to tracking the shipped products on couriers, it is common for online businesses to have thousands of dollars sitting in their inventory. The troubling part is that many eCommerce businesses don’t know where to account for the capital invested.
Inventory management is one of the greatest problems in eCommerce because as the number of SKUs, transactions, and market channels increase, companies are forced to put in more capital and that creates cashflow challenges.

Tracking Seller Fees

Most online selling platforms, such as Amazon, charge a flat fee monthly to businesses for using their site. But the real challenge for eCommerce companies comes from the miscellaneous fees these platforms charge for listings, advertising, and other transactions that pile up on top of each other. The lack of insight on these seller fees can make budget-planning more difficult than it should be.
You can opt to use online calculators to help you keep track of these seller fees. Some calculator applications are available for free but higher functioning ones might come at a price.

Managing Returns

A good business always has a contingency for returned products due to damage, loss, and other reasons that cause it to not work. Unlike businesses with physical stores where customers can return the items, eCommerce businesses rely on shipping to get the returned items back. Having good return policies can also boost brand loyalty and translate to conversions so it is not an option to not allow returns.
What you can do instead is enhance your quality control to reduce the number of returned items and pay careful attention to detail when writing off inventory, so it won’t be expensed twice and ruin the books.
These challenges should be expected by eCommerce merchants, but they are not impossible to overcome. Planning ahead and investing in reliable accounting tools can give your business good control over these problems.

Next read: Understanding Sales Taxes in the United States and Canada