ECOMMERCE SOLUTIONS

Selling products online has become a popular way of doing business in the modern world. E-commerce platforms like Amazon and Shopify have made it easier for small and large businesses to reach customers globally. However, selling in Europe comes with its own set of challenges for

Harmonizing cloud-based accounting programs with the German chart of accounts

Many international startups and professional e-commerce sellers are using cloud-based software (e.g. Xero, Quickbooks) to consolidate and manage their e-commerce transactions across marketplaces like Amazon and Shopify.

Unfortunately, most of today’s cloud-based accounting programs still seem to have limitations in terms of managing multiple charts of accounts. For this reason, e-commerce sellers will run into limitations when preparing e-commerce sales transaction data for European OSS and German VAT reporting.

Reconciliation of e-commerce transactions with online payment data

When carefully observing OSS accounting requirements it soon becomes very obvious that data received from marketplaces like Amazon and Shopify are received in raw form (e.g. the Amazon VAT transactions report in CSV format).

The challenge for every e-commerce seller is now to understand the generated sales transaction data in order to have the data prepared in a format that can be seamlessly reported to the right institutions.

This step becomes even more sophisticated when the e-commerce seller is actually a registered legal entity in Germany. If the e-commerce seller is a registered German company every single sales transaction not only has to be created as an individual journal entry but also every journal entry also needs to be reconciled with the corresponding payment transaction.

With regard to the reconciliation of sales and payment transactions, e-commerce sellers need to also think about managing the reconcilation of their marketplaces with multiple payment services. Last multiple payment statuses have to be taken into consideration because not every sales transaction is successfully completed and therefore might not be relevant for the specific reporting.

Selling products on e-commerce platforms like Amazon and Shopify can be a great way to reach customers globally, but it comes with its own set of challenges. Registering for VAT and complying with tax regulations can be time-consuming and complex, but with the right tools and knowledge, it's possible to manage and prepare your sales transaction data and be prepared for European OSS VAT reporting.