Ecommerce Bookkeeping: P&L Setup for DTC Brands

Your chart of accounts was designed for a services business. Here's how to restructure it for ecommerce.

Jakob Sperber

Director

Finance

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Your chart of accounts was designed for a services business. It doesn't separate variable costs from fixed costs, it treats shipping as overhead, and it gives you a gross margin number that's meaningless for ecommerce decision-making.

Here's how to restructure your bookkeeping so your P&L actually tells you what's going on.

The Ecommerce P&L Structure

Standard P&L: Revenue → Gross Profit → Operating Expenses → Net Profit. This hides the costs that matter most for ecommerce.

The structure you need, as covered in our CM1-CM2-CM3 framework:

  1. Gross Revenue

  2. Minus returns, refunds, discounts = Net Revenue

  3. Minus COGS (landed product cost) = CM1 (Gross Profit)

  4. Minus Variable Costs (shipping, processing, fulfilment, packaging) = CM2

  5. Minus Marketing (ad spend by channel, influencers, affiliates) = CM3

  6. Minus Fixed Costs (rent, salaries, software) = Net Profit

CM2 is the number that tells you how much you can spend on marketing. CM3 tells you if growth is profitable.

Setting Up Your Chart of Accounts

Revenue Accounts

  • Gross Revenue — total sales before deductions

  • Returns & Refunds — contra-revenue account, deducted to get net revenue

  • Discounts — promotional discounts, loyalty rewards

COGS (CM1 Level)

  • Product Cost — landed cost per unit (not invoice cost — include freight, duties, customs)

  • Packaging — boxes, mailers, inserts, branded materials

Variable Costs (CM2 Level)

These MUST sit between gross profit and marketing — not in overheads:

  • Shipping/Delivery — outbound to customer. This is variable, not fixed.

  • Payment Processing — Shopify Payments, Stripe, PayPal, Afterpay fees

  • Pick & Pack / Fulfilment — 3PL per-order fees or in-house labour allocated per order

  • Marketplace Commissions — Amazon, eBay, The Iconic referral fees (if applicable)

Marketing (CM3 Level)

  • Google Ads — separate line item

  • Meta Ads — separate line item

  • TikTok / Other Paid — separate

  • Influencer / Affiliate — separate

  • Email/SMS Platform — Klaviyo, etc.

Separating ad spend by channel is essential. "Advertising" as one lump sum is useless for decision-making.

Fixed Costs

  • Rent, salaries, software subscriptions, insurance, accounting fees, depreciation

COGS: Landed Cost, Not Invoice Cost

Your product cost isn't just the supplier invoice. Landed cost includes freight to Australia, customs duties, import GST, inspection fees, and warehousing on arrival. If your supplier invoice says $12/unit but landed cost is $16, every margin calculation using $12 is wrong. See our accounting guide for the full breakdown.

Returns: The Hidden Margin Killer

Track returns as a percentage of gross revenue. A 15% return rate on fashion turns a 60% gross margin into ~45% effective margin. Returns need to be netted against revenue in the period they're processed — not ignored until they show up as a cost in a random month.

Cash vs Accrual

Most AU ecom brands use cash accounting (simpler, ATO-friendly). But accrual gives a more accurate picture of profitability because it matches revenue and costs to the period they relate to. Run accrual for management reporting even if you file taxes on cash. For the cash timing dynamics, see our guide on ecommerce cash flow.

BAS and GST for AU Brands

Lodge BAS quarterly (or monthly if revenue exceeds $20M). GST on domestic sales is straightforward. Where it gets tricky: GST on imported goods (applies to consignments under $1,000), GST on marketplace sales (platform may collect), and fuel tax credits if you run your own delivery.

The Monthly Close

  1. Reconcile bank accounts

  2. Review and categorise all transactions (correct account, correct period)

  3. Net returns against revenue

  4. Update COGS with any new landed cost data

  5. Separate variable costs from fixed costs

  6. Calculate CM1, CM2, CM3

  7. Compare actuals to contribution margin targets

This should take 2–3 hours per month for a sub-$2M brand. If it takes longer, your chart of accounts needs cleaning up.

The Bottom Line

Your bookkeeper handles compliance. Your management P&L drives decisions. They're different documents that answer different questions. Set up the chart of accounts correctly, track landed cost at the SKU level, separate variable from fixed, and break out marketing by channel. Do this once and every financial decision you make from that point forward is based on reality, not an accounting structure designed for someone else's business.

Start with a free profit audit.

Find out what's holding your profit back.

We look at your numbers, identify the primary constraint, and tell you exactly what we'd fix. No obligation. You keep the findings regardless.

Start with a free profit audit.

Find out what's holding your profit back.

We look at your numbers, identify the primary constraint, and tell you exactly what we'd fix. No obligation. You keep the findings regardless.

Start with a free profit audit.

Find out what's holding your profit back.

We look at your numbers, identify the primary constraint, and tell you exactly what we'd fix. No obligation. You keep the findings regardless.

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