Why E-commerce Reconciliation Is Different

UK e-commerce sales reached £286 billion in 2025, representing 38.1% of total retail sales. More than 62 million people buy online. Mobile commerce alone exceeds £100 billion annually. The UK is the third largest e-commerce market in the world after China and the US.

The bookkeeping for this volume is not standard. An eBay seller with 200 orders a month faces reconciliation challenges that simply do not exist for a traditional retail shop. The bank statement shows one deposit. The platform shows 200 transactions. The difference is not a rounding error.

The Many-to-One Problem

A traditional business receives 15 customer payments on Tuesday. The bank statement shows 15 deposits. Reconciliation is straightforward: match each deposit to its corresponding invoice.

An e-commerce business processes 200 orders on Tuesday through Stripe. The bank statement shows one deposit on Thursday. That single deposit represents 200 individual transactions, minus fees, minus refunds, plus or minus adjustments from previous settlement periods. You need to match one bank entry against a platform settlement report that runs to several pages.

This is the fundamental difference. E-commerce creates a many-to-one matching problem. Settlement reports become essential working documents, not optional extras.

Settlement Timing Varies Wildly

A customer places an order on Monday. When does the money reach your bank account? The answer depends entirely on which payment processor you use and your account history with them.

These delays create timing differences between your sales reports and your bank statement. A sale recorded on March 15 might not reach your bank until March 22 via Stripe, March 30 via Amazon, or April 5 via PayPal if you are a new seller. This is normal. Your reconciliation workflow must account for these predictable delays.

Fee Structures That Never Match

The bank deposit is always net of fees. The gross sale amount never appears in your bank account. Understanding the fee structure for each processor is essential because you need to reconcile both the gross sales and the fees separately.

These fees are deducted before settlement. If you sell £1,000 of goods through Stripe at 1.5% + 20p, the calculation per transaction varies by order value, but the settlement you receive will be approximately £985 after fees. Your bank statement shows £985. Your accounting records need to show £1,000 revenue and £15 payment processing expense.

The common error is to record only the net deposit. This understates both revenue and expenses. The bank statement does not tell you what the customer paid. Only the settlement report does.

Returns and Chargebacks from the Past

A customer buys a £200 item in November. You receive the payment in November. The customer returns the item in February. The refund is processed in February but relates to November's sale. Where does this appear in your accounts?

If you are reconciling February, you will see a negative entry in the settlement report. If you reconcile at transaction level, you need to identify the original November sale and reverse it. If you reconcile at settlement level, you accept the negative entry as a February adjustment. Both approaches are defensible but they produce different management accounts for the intervening months.

Chargebacks are worse. A chargeback is a forced reversal initiated by the customer's bank. Common triggers: item not received, item significantly not as described, unauthorised transaction. The customer has 120 days from the transaction date to file a chargeback. That is four months.

Platforms typically deduct the chargeback from your next settlement and add a fee. Stripe charges £15 per chargeback. PayPal charges £14. You lose the original sale, you lose the product if it was shipped, and you lose an additional £15. This appears as a negative entry in the settlement report, possibly months after the original transaction.

Multi-Currency and Foreign Exchange

A UK seller on eBay.de receives a €150 payment. PayPal converts this to GBP at the point of settlement. The exchange rate used is not the rate on the day of sale. It is the rate on the day of settlement. If settlement occurs 3 days later and the pound strengthens against the euro, you receive fewer pounds than you expected.

Your accounting records need to reflect this. The sale was €150. The settlement was £127. The difference is a foreign exchange loss of £2 (assuming you recorded the sale at £129 based on the exchange rate at sale date). This loss is a genuine business expense but it only becomes apparent when you reconcile the settlement to the bank deposit.

Some platforms let you hold balances in multiple currencies. Stripe supports 135+ currencies. PayPal supports 25 currencies. If you hold a euro balance, you avoid the automatic conversion but you create a new reconciliation problem: you now have three bank accounts to reconcile (GBP current account, EUR PayPal balance, USD Stripe balance). Each balance has its own settlement reports and its own timing delays.

VAT Complexity Post-Brexit

E-commerce VAT is not straightforward even for purely domestic sales. Post-Brexit, the complexity increased substantially for sellers who trade internationally.

The VAT registration threshold for UK-established sellers is £90,000. The key detail is "UK-established". If you are a non-UK seller using FBA with stock in UK warehouses, you create a UK VAT obligation regardless of turnover. If you are a UK seller using FBA with stock in EU warehouses, you create local VAT obligations in those countries. The thresholds and rules vary by country. This is why many smaller sellers avoid storing stock abroad.

From July 2026, the EU abolishes the €150 customs duty exemption for low-value shipments. UK sellers shipping to EU consumers will face duties on all parcels. From March 2029, the UK abolishes the £135 import VAT relief. The compliance burden for cross-border e-commerce is increasing, not decreasing. Platform integrations with customs brokers will become essential.

The Reconciliation Workflow

Given these complexities, what does a competent e-commerce reconciliation workflow actually look like?

This workflow is tedious if performed manually. A Shopify seller processing 500 orders a week will spend several hours on reconciliation if doing this by hand. The arithmetic is not complex but the volume is high and the scope for error is substantial.

E-commerce reconciliation is different because the underlying economics are different. Settlement timing, fee deduction, returns windows, chargeback rights and multi-currency conversion create layers of complexity that do not exist in traditional retail. A bookkeeper encountering their first e-commerce client should expect to spend longer on reconciliation than for a comparable traditional business. This is not inefficiency. This is the nature of the sector.

The good news is that the workflow is repeatable. Once you understand how Shopify settlements work, every Shopify client follows the same pattern. Once you understand Amazon's referral fee structure, it applies across all Amazon sellers. The investment in learning the platforms pays dividends across your client base.