Year-End Close for E-Commerce Sellers: A Practical Guide

Year-end sneaks up fast when you are juggling Shopify, Amazon, and Etsy payouts along with holiday order volume. Between reconciling fees, counting inventory, and tracking down contractor info for 1099s, it is easy to leave loose ends that turn into headaches in January.

Here is a straightforward way to get your books ready for your CPA and get 1099s out on time.

Reconcile every sales channel to the bank

Each platform has its own way of reporting revenue, fees, refunds, and payouts. Before you close the year, make sure every payout that hit your bank account matches what your channel reports show. Common gaps show up in:

• Shopify payouts that bundle multiple days of sales into one deposit
• Amazon settlement reports that mix sales, fees, advertising costs, and reserves
• Etsy or WooCommerce fees that get recorded as one lump instead of broken out

If these are not reconciled, your revenue and expense numbers will not reflect what actually happened, which makes it harder for your CPA to prepare an accurate return.

Get your inventory and COGS right

Many sellers either skip inventory tracking altogether or rely on rough assumptions about cost of goods sold. At year end, that catches up with you. Before you close the books, check that:

• Inventory on hand is counted or reasonably estimated
• COGS reflects what you actually sold during the year, not just what you purchased
• Any inventory write-offs or shrinkage are recorded

If you have never set up a formal inventory process, year end is a good time to start one so next year is easier.

A simple year-end close checklist

1. Reconcile all bank and credit card accounts through December 31
2. Reconcile each sales channel's payouts, fees, and refunds to the bank
3. Review and finalize inventory counts and COGS
4. Confirm sales tax reports are ready to hand off to your CPA
5. Gather W-9s for any contractors, freelancers, or 1099 vendors you paid during the year
6. Review outstanding bills and invoices so AP and AR are current
7. Run a profit and loss by channel to see which platforms are actually making money

Do not miss the 1099 deadline

If you paid any contractor or vendor $2,000 or more during 2026 for services, you likely need to issue a 1099-NEC. These forms are due February 1, 2027. Start pulling together names, addresses, tax ID numbers, and total payments now, so you are not scrambling in late January. Check with your CPA on which vendors need a form and how to handle any gray areas.

Common mistakes to avoid

• Recording channel payouts as a single lump of revenue instead of separating sales, fees, and refunds
• Guessing at COGS instead of tracking actual inventory costs
• Waiting until January to ask vendors for W-9s
• Not separating sales tax collected from revenue, which can overstate income

What to automate

A lot of this work is repetitive enough to automate. For example, we have set up systems that pull sales, fees, refunds, and payouts directly from e-commerce platforms into the accounting software through APIs, instead of someone manually copying numbers from settlement reports into spreadsheets. We have also built monthly COGS and inventory tracking for a seller who previously had no formal process, replacing guesswork and periodic physical counts with a repeatable monthly calculation.

Closing the year clean does not require working nights through January. Build the habit of reconciling channels monthly, track inventory consistently, and start 1099 prep early, and year end becomes a quick review instead of a scramble.

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