How’s your eCommerce business looking as we head into the holiday season? As the year winds down, every seller knows how important it is to take a close look at their finances. This checklist isn’t just about running numbers—it’s about ensuring your financial house is in order and setting yourself up for success in the new year.
In this checklist, we’ll break down a simple to-do list that covers everything from balancing your books to preparing for tax season. By the time you’re finished, you’ll have a clear picture of your financial situation and some much-needed peace of mind as you head into the new year.
Start by ensuring all your business bank accounts, including credit cards and online payment systems like PayPal or Stripe, match your accounting records.
Don’t overlook hidden discrepancies: Double-check those cash flow records against your bank statements. A little work now will save you a lot of stress come tax season!
Is your inventory list accurate? Do a complete physical count and compare it to what you have on record. It’s easy for inventory to get out of whack—damaged or outdated items need to be written off.
Inventory valuation matters: How you value your inventory (FIFO, LIFO, or weighted average) can impact your financial reports and might help you write off unsellable inventory for less taxable income.
Are you on top of all your invoices? Ensure you’ve sent out all invoices and keep an eye on overdue payments from customers. Outstanding receivables? Schedule some follow-ups to get that cash flowing.
Take advantage of year-end deductions: If possible, make those final payments to suppliers to reduce your taxable income.
Are your sales numbers accurate? Reconcile sales data from Amazon, Shopify, eBay, and other platforms with your accounting software.
Sales tax compliance is key: Accurate reporting helps you avoid penalties and stay compliant in multiple states.
How’d you do this year? Take a close look at your Profit & Loss, Balance Sheet, and Cash Flow statements. Spot any unusual expense patterns or trends in your Cost of Goods Sold (COGS)? These could indicate valuable insights.
Ensure all revenue and expenses are properly accounted for to optimize your tax filing and identify financial trends for next year’s strategy.
Reflect actual production costs: Make sure all direct costs, inventory changes, and purchases are accurately recorded in COGS.
Check your profit margins: Accurate COGS gives you a clear picture of gross profit and helps identify improvement areas.
Are you compliant in every state? Reconcile the sales tax you’ve collected for each jurisdiction and ensure accuracy. This is especially important if you’ve sold in new areas.
Final entries make a big impact: Record depreciation, accrued expenses, and amortization to comply with GAAP or tax regulations.
Write off bad debts and depreciate assets to keep your financials accurate.
Reconcile your payroll records: Make sure all payroll data matches your accounting records and issue W-2s and 1099-NECs on time for the IRS.
Log bonuses and holiday pay to ensure they’re properly expensed.
Have you rounded up all deductible expenses? Gather and double-check records for things like your home office, shipping, and marketing expenses.
Consider tax-saving strategies: Delaying revenue or making retirement contributions could reduce your taxable income.
Be audit-ready: Store all purchase invoices, receipts, financial statements, and other important documents in a secure system.
Keep both digital and physical copies of critical records to stay organized and compliant.
What will you do differently next year? Evaluate this year’s performance to set realistic goals and tighten up budgets.
Identify cost-saving opportunities: Automate repetitive tasks and plan for growth to streamline operations and boost profitabilityClosing out the year can feel overwhelming, but with this checklist, you’ll be well-prepared to tackle tax season and start the new year strong!
Business owners commonly search for help with reconciling various accounts, especially across multiple payment systems like PayPal, Stripe, and bank accounts.
Questions around physical inventory counts for tax purposes attract searches from eCommerce sellers who need to manage stock accurately before the year ends.
Managing accounts receivable is crucial for cash flow, especially at year-end, and is a common search topic for business owners wanting effective methods to get payments in on time.
Multi-channel reconciliation is highly relevant to eCommerce businesses selling on various platforms, especially as they prepare for tax season.
Cost of Goods Sold is a key financial metric, and explaining its importance for eCommerce sellers can drive traffic from those wanting to understand profitability.
Sales tax compliance is critical, especially for businesses selling across state lines, so many sellers search for help to stay compliant.
GAAP vs. tax regulations is a popular topic, especially as business owners seek to understand end-of-year requirements for accurate financial reporting.
Many eCommerce businesses search for record-keeping guidelines, especially on which documents they need to store for tax or audit purposes.
As business owners wrap up the year, they look for advice on setting goals and planning for the upcoming year, making this a strong question for search volume.
As the year comes to a close, eCommerce sellers should review financial records, reconcile accounts, prepare tax documents, and assess inventory. Utilizing accounting software can streamline this process and ensure accurate reporting for tax purposes. You can Automate Your eCommerce Accounting with ConnectBooks and save yourself alot of the end-of-year hassle around your books.
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.
Ready to level up? Start making smarter, data-driven decisions every step of the way. Try ConnectBooks Free Today or Schedule a Demo
