E-Commerce accounting

If you sell through sales platforms such as Allegro or Amazon or are planning to do so, the accounting of your business must take into account important aspects related to cross-border transactions.

Amazon

Amazon offers various business models on its platform. Broadly speaking, they are divided into Seller Central and Vendor Central. The first one is intended for sellers who sell their products directly to Amazon customers via the marketplace. The second one involves selling wholesale quantities of goods to Amazon, which also distributes them.

FBA

Fulfillment by Amazon (FBA) is a sales method in which a seller ships their products directly to Amazon’s warehouses, but they still belong to the seller. They are then sent to the indicated address by Amazon, which is also responsible for customer service management.

FBM

Fulfillment by Merchant (FBM) is a sales method on Amazon in which the seller lists his products on the marketplace, but has his own warehouse, manages shipping and customer service himself (or through another logistics operator).

Vendor

Vendor is a sales method in which the customer delivers a bulk amount of goods to Amazon, and Amazon itself handles the sales.

Depending on the form of cooperation with Amazon, your accounting and tax obligations will look different, especially in the area of VAT.

Sales on foreign markets do not always require VAT registration. The exception is Great Britain, where one of the effects of Brexit was the imposition of such an obligation on every entity wishing to sell to this country. Moreover, VAT is necessary to maximize profits from sales. This is because, thanks to its registration, the seller can take advantage of the option of free, automatic invoicing of orders on all European Amazon markets, as well as use the FBA program.

WSTO (Intra-Community Distance Sale of Goods)

The sale of goods to private customers (B2C) from other countries is defined in tax regulations as Intra-Community Distance Sales of Goods (EES). The method of VAT taxation of ESPO transactions depends mainly on the value of sales to other EU countries. At the European Union level, an ESPO sales limit of EUR 10,000 has been established. This limit applies to the value of B2C sales made to all EU countries in a given calendar year. After exceeding the limit, the seller is obliged to tax his sales at the VAT rates applicable in the country of receipt of the goods.

VAT OSS (One Stop Shop)

This is a special procedure that entered into force on July 1, 2021 in the European Union as part of the e-commerce package. It is addressed to entrepreneurs who sell on a B2C basis to customers from other member states. VAT OSS allows you to settle sales to customers from different EU countries under one collective declaration. Moreover, thanks to this procedure, entrepreneurs do not have to register for VAT locally in other countries.

Additional responsibilities in foreign e-Commerce sales

Sometimes it is necessary to carry out the necessary registration processes with appropriate institutions in order to complete all formalities related to entering a given market, e.g. for the German market, you must register in the special LUCID Verpackungregister system. This is related to the obligation to dispose of and recycle all packaging introduced into Germany.

Cash register in e-Commerce

The supply of goods by mail (by post or courier) is exempt from having a cash register if the supplier of the goods receives full payment for the activity performed by post, bank or cooperative savings and credit union (to the taxpayer’s bank account or to the taxpayer’s account, respectively). cooperative savings and credit union of which he is a member), and the records and evidence documenting the payment clearly indicate what specific activity it concerned and for whose benefit it was made (purchaser’s data, including his address).

The exemption from having a cash register when selling online does not apply to all goods. This group includes, among others.:

perfume,
photographic equipment, excluding parts and accessories for photographic equipment and equipment,
parts and accessories for motor vehicles (excluding motorcycles), not elsewhere classified.

E-Commerce warehouse

Our many years of experience show that a big challenge for customers running online commerce is the full integration of accounting with warehouse management and sales and purchasing. It is often the case that the entrepreneur is not able to determine what inventory levels he has at a given moment, and sales portals do not have information about the actual inventory levels because they are not imported from the entrepreneur’s warehouse systems or the warehouse documents (WZ / WZ) are not issued on an ongoing basis upon arrival of the delivery or shipment of the goods. Additionally, the accounting itself only takes into account purchase and sales invoices, without taking into account warehouse movements. In the long run, as the company develops, such a situation leads to inappropriate presentation of the financial result, and therefore to tax results, as well as to inappropriate business decisions made by the entrepreneur.

That’s why we deal with such matters at ASK. We are able to eliminate existing arrears and use appropriate, modern IT tools in the area of purchasing, warehouse and sales services.