The six most expensive e-commerce accounting mistakes we see: treating online retail like standard bookkeeping, mishandling chargebacks, missing GST on low-value imports, misclassifying export sales, unreliable inventory, and no forecasting. The numbers behind them: card-not-present fraud reached $816 million in Australia in 2024, GST applies to imported goods of A$1,000 or less, and exports are only GST-free when goods leave Australia within 60 days.
Card-not-present fraud cost Australian card holders and merchants $816 million in 2024, and in almost every disputed online sale, the merchant wears the loss. That is only the most visible way weak accounting drains an online business.
Online sales now make up 12.7% of Australian retail turnover (ABS, June 2025), yet most online stores still run on bookkeeping built for bricks-and-mortar businesses. At 42 Advisory, a CPA firm in Chadstone, Melbourne, we see the same six mistakes across e-commerce clients. Here is each one, what it costs, and how to fix it.
E-commerce accounting differs because revenue arrives through payment gateways, not directly from customers. Every payout bundles sales, refunds, fees, chargebacks and GST across multiple channels and currencies. Recording gateway deposits as revenue overstates income, understates costs and produces an incorrect GST figure on the BAS.
A Shopify or Amazon settlement is never one sale. It is dozens of sales, minus refunds, minus platform fees, minus reserve holdbacks, sometimes converted from another currency. When a bookkeeper codes that deposit straight to sales, the books show inflated revenue, missing costs and "profitable" months that are actually cash-flow negative.
The fix is structural, not cosmetic: a purpose-built e-commerce accounting system that reconciles every order, fee and payout line by line, supported by bookkeeping processes designed for gateway data rather than bank data.
The merchant carries the risk in almost every online card dispute. Card schemes are built to protect the cardholder, so in a card-not-present transaction the seller usually loses the goods, the shipping cost and the sale amount, and pays a dispute fee on top, unless strong customer authentication such as 3D Secure shifted liability to the card issuer.
Card-not-present fraud made up 90% of all Australian card fraud in 2024, according to AusPayNet. Stripe, PayPal, Afterpay and Shopify Payments make selling easy, but they do not absorb dispute losses. They deduct them from your next payout.
In poorly structured books we regularly find chargebacks coded as bank fees, refunds never linked to the original sale, and no GST adjustment when a sale is reversed. Each of those errors compounds: revenue is overstated, GST is overpaid, and margins are distorted. A refund or chargeback is an adjustment event, and the GST originally reported can be claimed back as a decreasing adjustment on your next activity statement. Stores that skip this step pay GST on money they never kept. Getting these adjustments right is core BAS preparation work.
Take one disputed order from a typical online store:
| Item | Amount |
|---|---|
| Sale price (including $30 GST) | $330 clawed back |
| Product cost (goods not returned) | $180 lost |
| Shipping | $25 lost |
| Processor dispute fee | $25 charged |
| Original processing fee (not refunded) | $6 lost |
The sunk cash cost is $236. At a 10% net margin, the store needs roughly $2,360 of new sales just to earn that back. The correct accounting treatment: reverse $300 of revenue, claim the $30 GST back as a decreasing adjustment, expense the $25 dispute fee, and write off $180 of stock. Code the whole $330 clawback to "bank fees" instead and the books overstate revenue by $300 and gift the ATO $30 of GST.
Yes, in most cases. Since 1 July 2018, GST applies to imported goods valued at A$1,000 or less sold to Australian consumers. Sellers, online marketplaces and re-deliverers with A$75,000 or more of annual Australian GST turnover must register, charge 10% GST at the checkout and remit it to the ATO.
Dropshipping is squarely captured. If your business is registered for GST and sells goods that are overseas at the time of sale and shipped directly to Australian customers, you account for GST on those sales even though the stock never touches your warehouse. The ATO's guidance on low-value imported goods also applies GST to the shipping and insurance connected with each sale, a detail many store owners miss.
Where a marketplace such as Amazon or eBay is the electronic distribution platform, the platform is generally responsible for the GST instead of the individual seller, per the ATO's rules for imported goods and services. Knowing which side of that line you sit on determines what belongs on your BAS. If you are unsure, a tax compliance review settles it quickly, and our 2026 ATO due dates guide covers when each lodgement falls due.
No. Exports of goods are GST-free only if the goods leave Australia within 60 days of the earlier of receiving payment or issuing the invoice. Miss that window without an ATO extension and the sale becomes taxable, with one-eleventh of the price payable as GST. Documentary proof of export is required.
The 60-day rule in the ATO's exports and GST guidance is the trap. Pre-orders, back-orders and slow international freight can all push despatch past 60 days from payment. The detailed requirements, including what counts as sufficient evidence of export, are set out in ruling GSTR 2002/6.
Foreign exchange adds a second layer. Sales settled in USD or GBP must be converted at appropriate rates for GST and income tax purposes, and gateway FX spreads are a real cost that belongs in your margin analysis, not hidden inside a net deposit.
We review gateway settlements, import GST and export classifications for online businesses, and we tell you plainly what needs fixing.
Contact UsAccurate multi-location inventory needs one source of truth: perpetual inventory software connected to every warehouse, 3PL and marketplace, a monthly reconciliation of stock on hand to the balance sheet, and landed costs (purchase price, freight, customs duty) built into cost of goods sold. Without these, margins and forecasts are unreliable.
Amazon FBA stock, a Melbourne 3PL and a supplier warehouse in Shenzhen are three different counting problems. Businesses that track only what Shopify says they sold, without reconciling what each location says they hold, end up with COGS figures nobody trusts. Stock on hand is also trading stock for tax purposes, and the ATO expects it to be valued correctly at year end.
Once inventory is reliable, forecasting becomes possible. That is where an advisory layer earns its keep: 3-way forecasting that links profit, cash flow and the balance sheet so you can see whether the next container order is fundable before you commit to it.
Our work with Watches of Mayfair, a luxury watch e-commerce business, shaped how we approach every online retail client. High-value goods magnify every mistake on this list: a single disputed order can erase the margin on a week of sales, and customs duty or freight left out of landed cost quietly flatters the gross margin on every SKU.
Three habits from that engagement now apply to every store we act for. First, margin discipline at SKU level: every product carries its full landed cost, including freight, duty and insurance, before anyone celebrates a sale. Second, dispute documentation as routine: signatures on delivery, tracking evidence and authentication records filed per order, so chargebacks can actually be fought. Third, lean operations reviewed quarterly, from tax planning down to hiring decisions, including whether new support staff are engaged as contractors or employees.
None of that is glamorous. All of it is the difference between a store that scales and a store that grows revenue while going backwards in cash.
Book an initial online meeting and we will map the gaps in your current setup, from gateway reconciliation to GST and forecasting.
Book a MeetingDisclaimer: The information provided in this article is general in nature and does not constitute specific tax, legal, or financial advice. We recommend seeking professional advice tailored to your individual circumstances. 42 Advisory is a CPA firm and Registered Tax Agent.
Yes, once your annual Australian GST turnover reaches A$75,000, including sales of low-value imported goods. If a marketplace platform facilitates the sale, the platform may be responsible for the GST instead, but your own website sales count toward your registration threshold.
As a reversal of the original sale, not an expense. Reverse the revenue, claim the GST back as a decreasing adjustment on your next BAS, record the processor's dispute fee as an expense, and write off the stock if the goods are not returned.
Generally no. Goods exported from Australia within 60 days of the earlier of payment or invoice are GST-free, provided you keep documentary evidence of export. If despatch runs past 60 days without an ATO extension, the sale becomes taxable.
At least monthly, and weekly for high-volume stores. Every payout should be matched to its underlying orders, refunds, fees and disputes. Monthly reconciliation is the minimum needed for a BAS you can rely on.
They reconcile gateway and marketplace settlements to individual transactions, apply the correct GST treatment to imports, exports, refunds and chargebacks, keep multi-location inventory and landed costs accurate, and layer forecasting on top so the numbers drive decisions rather than just compliance.