5 Accounting Checks Before Holiday Sales Season

Holiday sales can historically generate up to 40% of annual revenue for many e-commerce sellers. However, it’s a double-edged sword: the same surge that grows the top line can overwhelm back-office processes like accounting and bookkeeping.

To help you ace the holiday season we recommend running through these five e-commerce accounting checks so you can spend peak season watching dashboards instead of scrambling in spreadsheets. 

Want even more details? Download A2X’s E-commerce Bookkeeping Checklist (Holiday Season Prep Edition) and work through it in the lead-up to the holiday sales season.

1. Automate Payout Reconciliation

If you sell on online channels such as Amazon or Shopify, then you’re likely familiar with their payout structure.

Shopify and Amazon deposit lump-sum amounts into your bank account. But these deposits aren’t just made up of sales– they also include fees, refunds, gift cards, tax, and other transactions.

Manual reconciliation during the holiday season can steal hours you could spend restocking fast-moving inventory, fine-tuning live ad campaigns, or resolving high-priority customer tickets.

Instead, connect A2X to each sales channel and let its one-click journals close the gap between gross sales and net deposits. The software summarizes transactions, splits out fees, refunds and tax, then lands perfectly balanced entries in QuickBooks or Xero– ready for a single-click match to the bank feed. 

Pro tip: Use A2X to post sales journals, and Cin7 to post COGS entries in your general ledger (GL)– together they automate almost every step in e-commerce bookkeeping.

2. Confirm Sales Tax Compliance

The information provided here is general and is not sales tax/VAT/GST advice. Each business’s tax compliance requirements differ, so we strongly recommend consulting a qualified tax professional to ensure your obligations are met correctly.

The lead-up to the holiday season is a great opportunity to:

• Verify you’re collecting the correct sales tax/VAT/GST rates: Run test checkouts in every jurisdiction you ship to and compare the calculated tax to the current official rate tables.
• Ensure each tax liability lands in the right GL account: Separate marketplace-collected tax from merchant-collected tax so remittances, refunds, and audit trails reconcile in seconds.
• Check how your products are taxed: Take a look at any new gift bundles, holiday sets, or promotional products you’ve added. Make sure they’re set up with the right tax codes. If you’ve marked any items as tax-free, double-check that they still qualify for exemptions in the regions you sell to.

Most importantly, keep an eye on where you need to collect tax. Big sales (i.e., during the holiday season) can push you over sales limits in certain states or countries faster than expected. That means you might need to start collecting tax in new places. Check your thresholds, register early if needed, update your filing calendar, and be ready to file returns on time.

3. Plan Ahead for Returns

Don’t let returns from holiday sales catch you off-guard! Just as sales spike during the holidays, return rates climb right alongside them.

To avoid a return-induced financial headache in January: 

• Estimate what might come back: Look at how many orders were returned last January. Adjust that rate if you’ve grown this year or added new products that tend to get returned more often.
• Set aside money now: Before December 31st, make sure you’ve earmarked enough in your books to cover expected returns. This gives you a clearer picture of your actual holiday profits.
• Track returns weekly: As refunds and chargebacks roll in, compare them to what you’ve set aside. If things are way off, make a quick adjustment so your numbers stay accurate.

4. Count Inventory and Lock In Landed Costs

The holidays bring in loads of traffic – which is great for sales, but unforgiving if your inventory’s not spot-on. One wrong stock count can turn into stockouts, unhappy customers, and wasted ad spend on products you don’t even have.

Do a quick stock check now, especially for your bestsellers. Make sure your counts are accurate and you know the full cost of each product – including shipping, customs, and fulfilment fees. This helps protect your profits and gives you a solid foundation for restocking as orders start to fly in.

Reminder: When A2X sends perfectly balanced sales journals into your general ledger and Cin7 synchronizes COGS and stock levels, the finance-to-ops loop closes automatically – freeing you to focus on revenue instead of reconciling spreadsheets.

Another helpful resource: Work with your accountant to streamline your inventory accounting process. This free template can help.

5. Forecast Cash Flow

Take some time in the weeks leading up to the holidays to build best-, base- and worst-case cash flow forecasts that layer holiday-level sales, ad spend, freight surcharges and elevated return rates onto your normal run-rate. 

Feed the model weekly with fresh settlement journals so you anticipate a cash flow crunch before it happens (and not two weeks later when the credit card bill lands). 

If your sales forecast shows you might run low on cash – especially when it’s time to pay your team or place big inventory orders – it’s better to act early. Sort out extra funding now while things are calm. That could mean increasing your credit card limit, renewing your line of credit, or getting pre-approved for a loan backed by your inventory. Cin7 customers are in luck! They have access to funding directly in the platform. Lenders get busy in Q4, so securing extra runway now can save you a big headache later.

Get Your Accounting Ready for the Holidays

Automating your bookkeeping today means that when the holiday rush hits, you can focus your time on results instead of data and administrative headaches.

Get more tips for preparing your accounting for the holiday season by downloading A2X’s free Holiday Bookkeeping Checklist for E-commerce Businesses.