Understanding Chart of Accounts for E-Commerce Stores

Understanding Chart of Accounts for E-Commerce Stores

If you're running an e-commerce business, understanding your financials is crucial, but that begins with setting up a clear and customized Chart of Accounts (COA).

Think of your Chart of Accounts as the financial blueprint of your business. It’s the structured list that categorizes all your income, expenses, assets, liabilities, and equity.

For e-commerce sellers, having a well-designed COA means better visibility, smarter decisions, and fewer headaches at tax time.

Let’s break down what a Chart of Accounts is, and how to tailor it for your online store.

🔍 What is a Chart of Accounts?

A Chart of Accounts is a hierarchical listing of all the accounts used in your bookkeeping system. These accounts are grouped into five main categories:

1. Assets – What your business owns (e.g., inventory, cash, accounts receivable)

2. Liabilities – What your business owes (e.g., credit cards, taxes payable)

3. Equity – Owner’s investment and retained earnings

4. Revenue (Income) – Sales from products, shipping income, discounts

5. Expenses – Costs of running the business (e.g., advertising, shipping, software)

Each transaction in your business gets recorded under one of these categories.

🛒 Why E-Commerce Stores Need a Specialized COA

E-commerce businesses are unique. They deal with:

• Multiple sales channels (Shopify, Amazon, Etsy)

• Payment gateways (PayPal, Stripe, Shopify Payments)

• Inventory and COGS tracking

• Shipping, fulfilment, and advertising costs

• Sales taxes across states or countries

Using a generic COA can make it hard to track true profitability and often leads to messy, unusable reports.

That’s why a tailored e-commerce COA is essential.

🧩 Sample Chart of Accounts Structure for E-Commerce

Here’s a simplified version of what a typical e-commerce COA might look like:

Assets

• 1010 – Bank – Operating Account

• 1020 – Stripe Clearing Account

• 1030 – PayPal Holding Account

• 1200 – Accounts Receivable

• 1300 – Inventory on Hand

Liabilities

• 2000 – Accounts Payable

• 2100 – Sales Tax Payable

• 2200 – Credit Card – Chase

Equity

• 3000 – Owner’s Equity

• 3100 – Retained Earnings

Revenue

• 4000 – Product Sales – Shopify

• 4010 – Product Sales – Amazon

• 4200 – Shipping Income

• 4300 – Discounts & Refunds

Cost of Goods Sold (COGS)

• 5000 – Cost of Goods Sold

• 5100 – Merchant Fees (Stripe, PayPal)

• 5200 – Amazon FBA Fees

Operating Expenses

• 6000 – Advertising & Marketing

• 6100 – Software Subscriptions (e.g., Shopify, Klaviyo)

• 6200 – Shipping & Fulfillment Costs

• 6300 – Professional Services (e.g., accounting, legal)

• 6400 – Office/Admin Expenses

💡 Tips to Get the Most Out of Your COA

• Keep it clean and not overly detailed. Don’t create a new account for every product or fee, use classes or tracking categories if needed.

• Use automation tools like A2X to post clean sales and fees into your COA from Amazon, Shopify, etc.

• Review your COA quarterly to ensure it still aligns with your reporting needs as you scale.

• Separate refunds, chargebacks, and discounts from gross sales for better performance analysis.

📘 Trustale Can Help You Set It Up Right

At Trustale Accounting, we don’t use a one-size-fits-all template. We design your Chart of Accounts based on:

• Your sales channels

• Payment processors

• Inventory systems

• Tax jurisdictions

• Business model (drop shipping, private label, etc.)

With the right foundation in place, you’ll get clear, actionable reports that actually help you grow your business, not confuse you further.

Ready to build your ideal accounting setup?

Let’s simplify your e-commerce accounting from the ground up.
Book a free discovery call with Trustale and let’s talk about getting your COA, and your finances, in perfect order.