Reconciliation (what gets reconciled, and how)
Reconciliation is proving your books against independent records: bank statements, settlement reports, payout data, inventory counts. An account is "reconciled" when every balance matches its source and every difference is explained. In ecommerce the workhorse is settlement-to-deposit reconciliation, tying what the marketplace says you earned to what the bank says you received, penny for penny. It's the control that separates books you can trust from books that merely look finished.
Books nobody ties out drift, and the drift always hides something. A real example pattern from onboarding: a seller's QuickBooks showed Amazon income $14,000 higher than settlements supported. The tie-out surfaced a stack of missed refunds, a reserve hold recorded as revenue, and $1,800 of FBA reimbursements Amazon owed but the seller had never claimed. Every one of those was invisible from the bank feed.
What gets reconciled each month
Bank and credit card accounts, against statements. Marketplace and gateway clearing accounts, against settlement and payout reports, so Amazon, Shopify Payments, PayPal and Stripe each tie out separately. Inventory, against FBA, 3PL and warehouse counts. Sales tax payable, against what the channels collected and what you remitted. Loan balances against lender statements, payroll liabilities against filings, and any reserve or receivable the platform is holding. If an account has an outside source of truth, it gets matched to it.
What "reconciled" means in practice
In QuickBooks or Xero, reconciling a bank account means matching each transaction in the file to the statement and marking it cleared, until the book balance and the statement balance agree at period end. Differences that remain are reconciliation items, and each needs a name: an outstanding check, a deposit in transit, a fee the bank charged that nobody entered. A tie-out that balances because someone posted a plug entry to a miscellaneous account isn't done; it's hidden. The tell is a suspense or uncategorized account with a balance that never goes to zero.
Settlements work the same way, one level up. The settlement report says gross sales $100,000, refunds $8,000, fees $15,000, reserve $2,000, deposit $75,000. Each line gets posted, and the deposit clears the clearing account to zero. If the clearing account still carries a balance after every settlement is posted, something was missed or double-counted, and that balance is the size of the error.
Why diligence is just reconciliation
A buyer's QoE team ties your claimed revenue to settlements and 1099-Ks. Books that get this treatment monthly sail through; books that never got it come apart in week one. It's the least glamorous work in accounting and the most valuable, which is why every account in a monthly bookkeeping engagement is reconciled before the close is called done, on the timeline our month-end close guarantee commits to.
Common questions
How often should books be reconciled? Monthly at minimum. High-volume sellers tie out settlements as they land, every two weeks for Amazon and daily for Shopify Payments, so month end is a review rather than a rebuild.
The bank feed already matched everything. Isn't that reconciled? No. The feed confirms cash moved. It doesn't confirm what the cash was for, and a marketplace deposit auto-coded to sales is the most common way ecommerce books go wrong while looking clean.
What if I'm months behind? Working backwards is a catch-up project, and it's usually faster than sellers fear because the source documents still exist. The settlement history is the map.
Where this shows up in our work
This isn’t textbook material for us; it’s the day-to-day of keeping seller books right. See how we handle it in practice:
Monthly Ecommerce Bookkeeping →Related terms