E-commerce accounting: what to get right before your first cross-border sale
Short answer. Accounting for an online store differs from ordinary bookkeeping in three places: sales run through a platform, money arrives as a payout with fees already deducted, and VAT may be due in another country. In practice that means watching the EU-wide EUR 10,000 threshold, reconciling the platform report against the payment provider's payout, and recording sales rather than the cash you receive.
The short version
- Sales and cash are not the same thing. A platform payout is a net figure. Gross sales belong in the books, with the fees recorded separately as costs.
- VAT follows the customer. Once distance sales to consumers in other EU countries pass EUR 10,000, you register for OSS or in each country separately.
- Inventory and returns are the most common error in the annual accounts, because the platform never shows what the stock is worth.
- E-invoicing rules are arriving country by country. In Latvia, structured e-invoices become mandatory between businesses from 1 January 2028.
What makes e-commerce accounting different?
For an ordinary service company the revenue chain is short: invoice, payment, entry. For an online store there are at least two intermediaries between the sale and the money, and each one adds its own layer of data.
Shopify or WooCommerce knows what was sold. Stripe or PayPal knows how much cash was transferred. The bank sees only the payout. None of them knows what your inventory is worth, or whether you have picked up a VAT obligation in Germany.
That is exactly why e-commerce needs a different approach from standard outsourced accounting. The workload is not in the number of invoices, it is in reconciling data between systems.
When does an online store need a VAT number?
Every EU country sets its own domestic registration threshold, measured over the previous 12 months. In Latvia it is EUR 50,000. You can also register voluntarily, and for an online store that often makes sense, because you can then deduct input VAT on goods, advertising and platform fees.
After registration three things change: invoices have to show VAT, returns have to be filed, and you have to keep track of which country each transaction is taxable in.
Read the full article on VAT registration →
What is OSS and when does it become mandatory?
This is the most important line on the page.
While your distance sales to consumers in other EU countries stay below EUR 10,000 a year, you can charge your home country's VAT rate. The threshold is EU-wide: it counts every member state together, not one by one. Once it is crossed, VAT is due in the customer's country at that country's rate.
From there you have two routes. Either you register for VAT in every country you sell into, or you use OSS, which lets you declare all EU distance sales in one place, in a single quarterly return filed in your own country.
For most online stores OSS is the only sensible option. It does not remove the need to know each country's rate, though, because the return reports them separately.
IOSS is a separate scheme, covering imported consignments valued up to EUR 150.
Read the full article on OSS, IOSS and the threshold →
How to record Shopify, WooCommerce or Amazon sales
The most common mistake is a simple one: EUR 8,400 lands in the bank and gets booked as revenue. In reality the sales were EUR 10,000, the platform took its commission, the payment provider took its share, and part of the amount belongs to the next period altogether.
The right approach is to record gross sales from the platform report, the fees as separate costs, and only then compare the result with the bank statement. If those two do not agree, something has been missed.
Read the full article on payments, platforms and ERP →
What does accepting payments cost?
The fees look small until you multiply them by turnover. Across a year the difference between providers is often a four-figure sum, and on cross-border payments a currency conversion mark-up is added on top.
Work out your own payment costs →
What to do at each stage
| Stage | What to do | When |
|---|---|---|
| You start selling at home | Bookkeeping, VAT registration once the domestic threshold is passed | From the first sale |
| You start selling across the EU | Track the EUR 10,000 threshold | Before the threshold is reached |
| You pass EUR 10,000 | Register for OSS, or in each country | In the same quarter |
| Stock held in another EU country | Local VAT registration in that country | Before the goods arrive |
| Imports from outside the EU | IOSS for consignments up to EUR 150 | Before you start selling |
Inventory, returns and shipping costs
The platform shows sales, but it does not show what the goods on the shelf are worth. That is why inventory is where the annual accounts most often come apart.
Two basic rules. Inbound shipping from your supplier is part of the cost of the goods; outbound shipping to the customer is a cost of sale. And a returned item goes back into inventory at the value you can realistically sell it for, not at its original cost.
Which deadlines apply?
| Obligation | Deadline |
|---|---|
| VAT return | Monthly or quarterly, depending on turnover |
| OSS return | Quarterly |
| Annual accounts, micro and small companies in Latvia | Five months after the financial year end |
Latvia tax calendar 2026 → · On the annual report →
What changes with e-invoicing?
Structured electronic invoicing is arriving across the EU, but the timetable is set country by country, so the date that matters is the one in the country where your company is registered. In Latvia, structured e-invoices become mandatory between businesses registered there from 1 January 2028. Selling goods or services to private individuals is not covered by that requirement.
For an online store this means two things. If you also sell to businesses, your invoicing system has to be ready. And if you are planning to change accounting systems, it is worth weighing this at the point of choosing, rather than in the December before the deadline.
Platform reports or your own system?
While turnover is modest and you sell in one country, platform reports plus an outsourced accountant with a good process are enough.
The line is usually crossed when several things coincide: multiple sales channels, stock in more than one place, sales in several currencies, and a need to see real profit per product rather than in total. At that point assembling the data by hand starts costing more than a system would.
Download the OSS threshold checklist
Frequently asked questions
Does an online store need a VAT number if it only sells at home?
Registration becomes compulsory once you pass your own country's domestic turnover threshold. Below it you can register voluntarily, and for an online store that often pays off, because you can then deduct input VAT on goods, advertising and platform fees.
What happens if I pass the EUR 10,000 threshold without noticing?
VAT on the sales above the threshold becomes payable in your customers' countries with retroactive effect, and you may have to file corrected returns. That is why the threshold needs watching continuously, not at year end.
Can Shopify fees be netted off turnover?
No. Gross sales go into turnover and the fees are a separate expense. Offsetting income against costs is not allowed.
How do I record sales in a currency other than my own?
Convert the amount at the rate in force at the start of the transaction day. At year end, revalue foreign currency balances at the closing rate of the last day of the financial year.
Does an Amazon FBA warehouse in another country create a VAT obligation?
Moving goods into a warehouse in another EU country normally creates a VAT registration obligation in that country. It has to be sorted before the goods arrive there.
What does outsourced accounting for an online store cost?
It depends on transaction volume, the number of channels and whether OSS applies. For e-commerce the workload is driven by reconciling data between the platform, the payment provider and the bank, not by the number of invoices. We can price it concretely after a call.
In closing
Mistakes in e-commerce bookkeeping rarely hurt straight away. They accumulate and surface either in the annual accounts or in a tax authority's question about VAT in another country. We provide outsourced accounting for online stores: reconciling platform and payment data, monitoring the OSS threshold, and getting ready for e-invoicing. We also help work out which country a VAT obligation arises in, and work with local partners where registration has to be done on the ground.
SMAIDA Solutions is a licensed outsourced accountant in Latvia (licence No. AGL0003786).
This page is general information, not individual legal or tax advice.
Published: 11 October 2026.