Four things make e-commerce bookkeeping different: payment gateways settle net of fees days after the sale, shipping charged to customers is income rather than a cost recovery, returns and refunds must reverse both the sale and the stock, and multi-channel sellers have to reconcile several platforms to one bank account. Get those four right and the rest is ordinary accounting.
The single most common error is recording the deposit that lands in your bank as the sale. It is not — it is the sale, less commission, less gateway fees, days later, sometimes for several orders at once.
1. Payment gateway settlement
What happens: a customer pays R1,150. Your gateway deducts a fee of roughly 3%, and deposits R1,115.50 two or three days later, often batched with other orders.
What must be recorded:
| Line | Amount |
|---|---|
| Sale (including VAT) | R1,150.00 |
| Gateway fee (expense, with input VAT) | R34.50 |
| Net deposited to bank | R1,115.50 |
Recording only the R1,115.50 understates both your revenue and your expenses. It also understates your output VAT, which is a SARS problem rather than just a reporting one.
Add the cut-off issue: a sale on 28 February settles on 2 March. The sale belongs in February; the cash arrives in March. Without an adjustment your year-end revenue is understated and your gateway account does not reconcile.
The fix: treat the gateway as a bank account in your accounting software. Sales go in gross, fees come out as expenses, and settlements transfer to your bank. The balance is then money in transit, and it reconciles.
2. Shipping is income, not a recovery
Shipping charged to the customer is part of your revenue. The courier cost is a separate expense.
Netting them off hides whether shipping is profitable — and for many South African sellers offering flat-rate or free shipping over a threshold, it quietly is not.
Worth tracking monthly: shipping revenue against courier costs. If courier costs consistently exceed shipping revenue, your free-shipping threshold is set wrong.
VAT point: where the sale is standard-rated, the shipping charged is generally standard-rated too. It follows the supply.
3. Returns and refunds
A refund reverses the sale, the output VAT and the stock movement.
A credit note is required, not a negative invoice. It must reference the original tax invoice and state the reason. See what makes a valid tax invoice.
Three things often missed:
Returned stock goes back into inventory — otherwise your stock and gross margin are both wrong
Damaged returns are written off, not returned to stock
The gateway fee is often not refunded to you, so it stays as an expense on a sale that no longer exists
Track your return rate. In apparel it can exceed 20%, and a business modelling profitability on gross sales without allowing for returns is modelling a business it does not have.
4. Multi-channel reconciliation
Selling through your own site, a marketplace, and social channels means several settlement streams arriving in one bank account on different cycles, net of different fees.
Reconcile each channel separately:
| Channel | Gross sales | Commission | Fees | Net settled | Received |
|---|---|---|---|---|---|
| Own website | |||||
| Marketplace | |||||
| Social / other |
Marketplace commission is a cost, not a discount. Record the gross sale and the commission separately, and calculate margin by channel. A product that works at 40% margin on your own site can be loss-making at 20% marketplace commission plus shipping.
VAT for online sellers
Selling to South African customers: standard-rated at 15%, exactly like a physical shop.
Exporting goods: exports are zero-rated, but only with the prescribed documentary proof. Keep the customs and shipping documentation — a zero-rating you cannot support becomes a standard-rated supply on audit, and you pay the 15% out of a price that never included it.
Zero-rated sales still count towards the VAT threshold. An exporter turning over R2.5 million entirely in exports is liable to register at R2.3 million, even though every sale carries 0% VAT. Once registered, they are usually in a permanent refund position, which is good for cash flow.
Importing stock: import VAT is payable on the customs value plus duty plus a prescribed uplift. It is claimable as input tax, but the proof is the customs documentation, not the foreign supplier's invoice. Where a clearing agent pays on your behalf, get the underlying bill of entry, not just the agent's invoice.
The threshold changed. Compulsory registration rose to R2.3 million on 1 April 2026, voluntary to R120,000. See the VAT registration threshold.
Digital products and services have their own rules, and foreign suppliers of electronic services to South African customers operate under a separate registration regime. If you sell downloads, subscriptions or software, take specific advice.
Stock and margin
You cannot calculate gross margin without a stock count. Purchases are not cost of sales.
Cost of sales = opening stock + purchases − closing stock
Landed cost is the right basis for imported stock — purchase price plus freight, insurance, duty and clearing costs. Using the invoice price alone overstates your margin, sometimes substantially.
Count monthly if stock is material. Quarterly at absolute minimum. A business that counts once a year has no reliable margin figure for eleven months.
The systems question
A live integration between your store, your payment gateway and your accounting software is worth more than almost any other efficiency in an online business. Manual capture of hundreds of small transactions is both expensive and error-prone.
What to look for:
Orders sync as invoices, gross, with VAT
Gateway fees post as expenses automatically
Settlements match to bank deposits
Stock levels update on sale and on return
Refunds create credit notes rather than negative invoices
Getting this configured properly once removes most of the recurring cost of e-commerce bookkeeping.
Frequently asked questions
How does accounting work for an online store in South Africa? Record gross sales rather than net deposits, treat payment gateway fees as an expense, treat shipping charged to customers as revenue with courier costs as a separate expense, process returns through credit notes that also reverse stock, and reconcile each sales channel separately to the bank.
Do I charge VAT on online sales in South Africa? Yes, at 15% on sales to South African customers once you are registered. Exports are zero-rated but only with the prescribed documentary proof, and zero-rated export sales still count towards the R2.3 million compulsory registration threshold.
How do I account for payment gateway fees? Record the full sale including VAT as revenue, and the gateway fee as a separate expense on which input VAT is claimable. Treating the gateway as a bank account in your accounting software makes settlement timing and fees reconcile automatically.
Is shipping charged to customers income or a cost recovery? Income. Shipping charged to the customer forms part of revenue and the courier cost is a separate expense. Netting them off hides whether your shipping policy is profitable.
Can I claim VAT on imported stock? Yes, import VAT is claimable as input tax where the goods are for making taxable supplies. The documentary proof is the customs documentation, principally the bill of entry with proof the VAT was paid — a foreign supplier's commercial invoice is not sufficient on its own.
When must an e-commerce business register for VAT? Once taxable supplies exceed R2.3 million in any consecutive 12-month period, a threshold that rose from R1 million on 1 April 2026. Voluntary registration is available above R120,000, and zero-rated export sales count towards both thresholds.
How do I handle returns in my books? Issue a credit note referencing the original tax invoice, which reverses both the sale and the output VAT. Return saleable stock to inventory and write off damaged goods. Note that gateway fees are often not refunded, so they remain an expense on a sale that no longer exists.
Books that reconcile to every channel
E-commerce bookkeeping is not conceptually difficult, but the volume and the number of moving parts make manual processing expensive and unreliable.
Smartbook sets up the integrations between your store, gateways and accounting software so sales, fees, settlements and stock flow automatically — then handles VAT, imports and monthly management accounts with margin reported by channel.
Last reviewed: 26 July 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. Export zero-rating, imported services and electronic services rules are fact-specific — take advice on your own supply chain. General guidance, not advice on your circumstances.
Primary sources: SARS — Value-Added Tax · SARS — Budget 2026 Frequently Asked Questions · SARS — FAQs on Supplies of Electronic Services · SARS — Tax Invoices