eBay bookkeeping for UK sellers: what to record and when
Good eBay bookkeeping is not complicated, but it is unforgiving about timing. Almost everything that goes wrong at year end goes wrong because a figure was not captured when it was easy to capture — and by the time anyone needs it, the supplier email is buried and the memory is gone.
This is a routine rather than a theory: what to record, when to record it, and how long to keep it.
The four figures everything rests on
Whatever system you use, you must be able to produce these for any period:
| Figure | Why |
|---|---|
| Total sales | Your turnover, before anything is taken off |
| Cost of goods sold | What the items you sold cost you. Without this, profit cannot be calculated |
| Business expenses | Fees, postage, packaging, subscriptions, storage |
| Closing stock | What you are holding on the last day of the period |
Cost of goods is the one that fails, because it is the only one that lives outside eBay.
What to record daily
Two minutes, and it removes most year-end pain.
- Supplier purchases — what you bought, how many, what it cost including any delivery and tax you paid on the way in. Keep the confirmation.
- Postage you paid — label costs, if you buy them outside eBay
- Refunds given, and which order they relate to
The refund one matters more than it looks. A refund in March for a January sale belongs to January's trading, and if it is not tied back you will misstate both months.
What to reconcile monthly
Match payouts to orders
A payout is not income. It is a transfer covering several orders, minus fees and refunds, and it frequently straddles a month end. Treating payouts as revenue overstates some months and understates others, and makes year-end reconciliation genuinely difficult.
Separate platform costs from per-order costs
Shop subscription, listing fees and account-level promoted listing charges are overheads — you pay them whether you sell or not. They are not part of any individual order's cost. Lumping them in makes every order look worse than it is and hides which lines are genuinely unprofitable.
Find the orders with no cost against them
This is the single highest-value monthly habit. An order with no supplier cost recorded is counted as pure profit by almost every system, so your figures drift upward quietly. Chasing them at the end of the month is easy; chasing them in eleven months is not.
What to do at year end
- Count your closing stock and value it at what you paid, not what you hope to sell it for
- Make sure every order has a cost — the last chance to do it while the trail is warm
- Note your VAT status and any date it changed during the year
- Total your expenses by category rather than as one figure
- Export everything — a CSV of every order behind the totals, not just the summary
The export matters. A summary tells an accountant the answer; the detail lets them check it, which is what they will want to do.
Which stock cost applies? FIFO in practice
If you buy the same product repeatedly at different prices, you need a consistent rule.
FIFO — first in, first out — treats the oldest stock as sold first. It is the most common approach for resellers and it matches how stock physically moves.
The important part is not which method you pick but that you apply it consistently and can show how you arrived at a figure. Switching between methods because one gives a nicer answer is the thing to avoid.
How long do you need to keep records?
Longer than most sellers assume, and the rules differ depending on whether you are a sole trader or a company. HMRC publishes the current periods and they are worth checking directly rather than relying on a blog.
The practical advice: keep the supplier confirmations, not just the summary figures. A number in a spreadsheet is not evidence. The email showing what you paid is.
VAT, briefly
If you are not registered, nothing is deducted for VAT and your figures are as they appear.
If you are registered, three things change: VAT on sales is not yours to keep, VAT on eBay's fees is generally reclaimable on the standard scheme, and the flat rate scheme works differently again. Registering part-way through a year means orders either side of that date must be treated differently.
That last point is the one that breaks spreadsheets. Your records need to know which status applied on which date, not just what your status is today.
How VAT applies to you specifically is a question for your accountant.
The common mistakes
- Treating payouts as income — the most frequent, and the most disruptive at year end
- No cost of goods — makes profit and tax both wrong
- Refunds not matched to their original sale — distorts two periods at once
- Platform fees mixed into per-order costs — hides which lines actually lose money
- Keeping summaries but not evidence — fine until someone asks
Making it a routine rather than a project
All of the above is achievable by hand at low volume. The reason it fails is not difficulty but repetition — it has to happen every day, and the day it stops happening is the day the year-end job becomes archaeology.
SellerControl captures the supplier cost as the purchase happens and matches it to the eBay sale, keeps payouts separate from profit, and produces a period export with every order behind the totals. It also states plainly what it does not do: it does not calculate your VAT, and it does not work out the tax inside eBay's fees. Those are your accountant's call.
For the underlying profit calculation, see how to calculate your real eBay profit.
Frequently asked questions
What records do eBay sellers need to keep in the UK?
Sales, supplier invoices showing cost of goods, postage costs, eBay fee statements, business expenses and closing stock. Keep the underlying documents, not just your own summaries.
How do I record cost of goods sold for eBay?
Record what you paid for each item, including delivery and any tax you paid on the way in, and tie it to the order it was sold on. Use a consistent rule such as FIFO where you buy the same product at different prices.
Are eBay payouts the same as income?
No. A payout is a transfer of money covering several orders, minus fees and refunds, and it may straddle a month end. Income is what you earned on the sales themselves in the period they happened.
Do I need an accountant to sell on eBay?
Not necessarily, but if you are trading rather than clearing out your loft, you have tax obligations. An accountant is usually cheaper than getting it wrong, particularly around VAT.
What is closing stock and why does it matter?
The stock you still hold at the end of the period, valued at what you paid. It affects the accounts because stock you have not sold is not a cost of sale yet.