Can Your E-Commerce Business Afford Its Next Stock Order?

By Sergiy Kucherenko CPA, Director, 42 Advisory. Last reviewed 24 October 2026.

Your store has $60,000 in the bank and a supplier wants a 30% deposit on a $44,000 order. Sales are growing, so the order looks affordable. It stops looking affordable once the supplier balance, payroll and a BAS payment are placed in the same six weeks.

This guide shows how to test a stock order against a weekly e-commerce cash flow forecast before you sign the purchase order. It is written for Australian retailers selling physical goods they own through an online store or marketplace. All figures are illustrative and in Australian dollars.

What Should E-Commerce Accounting Tell You Before You Order Stock?

E-commerce accounting brings sales, platform settlements, stock, expenses and tax together. Compliance needs that for the BAS and the tax return. A growing retailer also needs it to decide what to buy and when to pay for it.

A reconciled bank balance is the starting point, not the answer. If the books are a quarter behind, the stock decision is being made on old numbers. Our bookkeeping support keeps platform activity current so that purchasing decisions can rely on it.

How Do You Check Platform Payouts Before Relying on Them?

Customer payments, reported sales and bank deposits rarely match line for line. A payout is usually net of platform fees, refunds and reserves, and some money may still sit with the provider at month end. Our guide to settlement accounting and gross versus net payouts explains the bookkeeping in detail.

Decide whether your cash forecast works from gross customer collections or net payouts, and stick to it. If you forecast net payouts, the platform fees are already deducted, so do not list them again as a separate payment. The same discipline applies to software connections: an integration posting sales and a bank rule posting the matching payout as sales will record the same revenue twice. Our Xero and Shopify setup guide covers the usual configuration.

How Do You Calculate Contribution Margin Per Order?

Include the full landed cost of the product, not just the supplier invoice. Freight, duty and inbound charges belong in the cost of the stock; our article on landed cost for imported inventory shows how to build it.

Check what your reports measure before using them to approve stock. Shopify's help centre states that profit is reported only for products and variants that had a cost recorded at the time they were sold. A product with no cost entered simply drops out of the profit figure.

A modest discount can halve the result

Consider a GST-registered retailer selling one item per order. The sale is fully taxable and the customer pays no separate delivery charge. Figures are per kept order and exclude GST, which is recoverable. The fee rate is a modelling assumption, not any platform's published rate.

Returns assumption: refunded orders are excluded from revenue, so the table shows orders the customer keeps. The $6.00 allowance is the expected net cost of returns spread across kept orders: return postage and handling, returned stock that cannot be resold, and any fees the platform does not refund on a refunded sale, less the value of stock returned to inventory. If your refund rate is material, model refunded revenue and recovered stock explicitly instead.

The 10% discount cuts contribution per order by 47.5%. To earn the same total contribution as 100 orders at full price ($2,400), the promotion needs at least 191 orders ($2,400 divided by $12.60, rounded up), assuming costs per order stay as shown. That is a 91% lift in orders before fixed overheads, interest and income tax. Our e-commerce profit margin calculator lets you run your own inputs.

How Much Stock Do You Actually Have Available to Sell?

A stock report should separate goods available for new orders from goods committed to customers, damaged goods and items awaiting inspection. Reconcile stock held by a third-party warehouse or marketplace, and confirm who owns goods in transit under the supplier's terms.

Check which definition each report uses. Shopify's inventory guidance states that from 1 October 2026 its inventory reports measure stock by On hand quantity instead of Available quantity, while data before that date is unchanged. On hand includes committed and unavailable units, so a report run today can show more units than you can sell, and a year-on-year comparison may mix the two bases.

For a simple replenishment test: 300 usable units and expected sales of 10 a day give about 30 days of cover. If the supplier needs 45 days to deliver, there is a 15-day gap even if the order is affordable. Adjust demand for seasonality and any planned promotion, and check popular sizes or variants separately; a store-wide total can hide a shortage.

Is a stock payment an expense when you pay it?

Usually not. For accounts prepared under AASB 102 Inventories, inventory is measured at the lower of cost and net realisable value (paragraph 9). Net realisable value is the estimated selling price less the estimated costs of completion and the costs necessary to make the sale (paragraph 6), not simply the selling price. Cost includes the purchase price, import duties and inbound transport, but excludes taxes the business later recovers, such as GST credits (paragraphs 10 and 11).

The carrying amount becomes an expense when the goods are sold. Write-downs to net realisable value and inventory losses, such as damaged or missing stock, are expensed in the period they occur, which can be before any sale (paragraph 34). A supplier deposit normally starts as a prepayment and becomes inventory when the business obtains the goods.

When is stock deductible for tax?

Income tax follows its own rules. Under section 70-15 of the ITAA 1997, an outgoing for trading stock that is not yet on hand is generally deductible in the income year the stock becomes on hand, not the year it is paid. Sections 70-35 and 70-45 then bring the change in stock value into the calculation each year, as the ATO's general trading stock rules explain.

"On hand" does not mean physically in your warehouse. The ATO's ruling IT 2670 treats goods as on hand where the business has the power to dispose of them, and confirms that goods in transit can be on hand. Whether stock shipped before 30 June but delivered in July is on hand at 30 June depends on the contract and shipping terms, including when title and risk pass. The same ruling flags that arrangements contrived to change year-end stock may attract Part IVA, so check the terms with your tax agent rather than timing a purchase around them.

Businesses with aggregated turnover under $10 million can use the simplified trading stock rules. For income years starting on or after 1 July 2021, the rules also extend to businesses with aggregated turnover of $10 million or more but less than $50 million that meet the other conditions. Under section 328-285 of the ITAA 1997, a stocktake can be skipped where you reasonably estimate the difference between opening and closing stock value is $5,000 or less. Our tax planning service reviews the timing of stock purchases and other deductions before 30 June, when the decision can still change.

How Do You Build a Weekly Cash Flow Forecast for a Stock Order?

Use actual cash amounts, including GST where it is charged, and label the basis. Australian Government guidance on setting up a cash flow statement asks you to state clearly whether figures include or exclude GST. Keep the forecast GST-inclusive and the margin analysis GST-exclusive, and do not mix the two. A three-way forecast links the same assumptions to profit and the balance sheet, so the stock you buy shows up as inventory, not as a loss.

Worked example: two stock orders, week by week

Assumptions: the retailer starts with $60,000 and compares a $44,000 order with a $33,000 order, both GST-inclusive, with the same product mix and unit price. Each requires a 30% deposit in week 1 and the 70% balance on shipment in week 6. Receipts are net platform payouts from existing trading, after fees and refunds, so platform fees are not deducted again. The new stock generates no receipts within the eight weeks. Operating payments include fortnightly payroll in weeks 2, 4, 6 and 8. The $12,000 tax payment in week 4 is a BAS for an earlier period, and no GST credit on the new order turns into cash during the forecast.

The owner has set a $15,000 minimum cash buffer. The larger order's lowest point is $9,500 in week 6, the week the supplier balance falls due alongside payroll. That is $5,500 below the buffer, and the business stays below it until week 8 closes at $13,000. The smaller order's lowest point is $20,500, also in week 6, which keeps $5,500 above the buffer in every week.

Looking only at week 8 would hide the real pressure point: the gap between the two orders at week 8 is $11,000, but the larger order spends three weeks under the buffer first. The buffer itself is a business decision, not a legal threshold; its size should reflect payment commitments, how volatile sales are and access to funding.

The smaller order may still cause a stockout later. Extend the forecast through the next reorder and compare the contribution lost from running short. Other options include staged deliveries, moving the balance date, or business finance arranged before the order is placed, not after the account is overdrawn.

How Do GST and Tax Payments Affect the Forecast?

Under section 188-10 of the GST Act, current GST turnover covers this month and the previous 11, and projected GST turnover covers this month and the next 11. The ATO's GST registration guidance requires registration within 21 days of meeting the threshold. GST turnover is not simply gross receipts or payouts after fees: it is the value of supplies excluding GST, and it leaves out input-taxed sales, sales not connected with Australia and certain other supplies. The $75,000 figure is set by regulation 23-15.01 of the GST Regulations 2019.

Your net BAS payment depends on GST on sales less eligible credits and adjustments. When each amount falls into a BAS depends on whether the business accounts for GST on a cash or non-cash basis (GST Act sections 29-5 and 29-10). The ATO's guidance on choosing a GST accounting method confirms that businesses with aggregated turnover under $10 million can generally choose either. Confirm the basis before forecasting the next BAS.

If you import, confirm who makes the creditable importation and keep the import declaration before assuming an import GST credit (GST Act sections 15-5 and 15-15). Our GST guide for Australian e-commerce sellers covers the wider obligations, and our BAS and IAS lodgement service gives you an estimated liability and due date to put in the forecast.

What Happens to the Order If Sales Slow Down?

In the example above, suppose $5,000 of payouts in each of weeks 5 and 6 slips beyond week 8. The larger order's balance falls to minus $500 in week 6, so the account would be overdrawn in the week the supplier balance is paid, and week 8 closes at $3,000. The smaller order's lowest week falls to $10,500, now $4,500 below the buffer, and week 8 closes at $14,000. One delayed-receipts assumption turns a manageable order into an unfunded one, and pushes even the safer order under the buffer.

Then test the risks that matter to your store: slower sales of existing lines, higher cost per acquisition, a delayed container or extra fulfilment charges. A supplier's bulk discount should be weighed against the extra cash committed and how long the extra units take to sell. A lower unit cost does not help if the business then cannot meet a tax payment or payroll. Our article on e-commerce accounting mistakes that cost you money covers the record-keeping errors that usually sit underneath.

Keep a Short Record of the Purchasing Decision

Before you commit, file a one-page record with the supplier quote. When the next order comes up, it shows which assumptions held.

Update the forecast as actual receipts and payments arrive, and compare sales, contribution and stock movement with the assumptions you used to approve the order.

How 42 Advisory Helps E-Commerce Owners Make These Decisions

Our e-commerce accounting team starts with reconciled platform activity, reliable inventory costs and a clear view of tax payments coming up. Our business advisory and three-way forecasting service then models the decision you are considering, such as comparing order sizes, supplier terms and the timing of receipts, and reviews the assumptions as actual results arrive. Engagements are on fixed fees, agreed in writing after your initial meeting.

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