E-shop: obligations and accounting for online sales

Running an e-shop is an attractive way into business, but selling online brings specific obligations and accounting requirements. If you get them right from the start, you will avoid both fines and chaos in your finances.

Legal obligations of an online seller

When selling to consumers over the internet, stricter customer protection rules apply. An e-shop must publish clear information about the seller, the goods, the price, delivery and complaints. Terms and conditions and information on the right to withdraw from the contract are essential.

What must not be missing from an e-shop

• the operator’s identification details,
• terms and conditions and a complaints procedure,
• information on the price including all charges,
• information on withdrawal from the contract,
• processing of personal data in line with privacy rules.

Accounting and sales records

Every sale has to be properly recorded and documented. With online payments, cash on delivery and payment gateways alike, you need to keep track of revenue, returns and intermediaries’ fees. Linking your e-shop to your accounting system significantly reduces manual work and errors. With a larger number of orders, it pays to automate both invoicing and stock records, so that you are not swamped by paperwork and always have an up-to-date overview of how your business is doing.

Stock and costs

If you sell physical goods, stock records are an important part of your accounting. You need to know how much stock you have, what it is worth and what costs are associated with it. An overview of your stock will help you set prices correctly, plan purchases and avoid having capital tied up needlessly in unsellable stock. Well-kept stock records are also the basis for calculating your profit correctly.

Taxes and VAT on online sales

When selling goods, you deal with income tax and possibly VAT. A specific situation arises when selling to customers in other EU countries, where special rules for cross-border sales apply. Rates, limits and registration thresholds change, so check the specific current figures and obligations in up-to-date sources or with your accountant.

How to get things in order from the start

1. Choose a suitable legal form for your business.
2. Prepare your terms and conditions and the mandatory information.
3. Set up your sales records and the link to your accounting.
4. Sort out your payment methods and how they are booked.
5. Keep track of your tax and any VAT obligations.

Complaints and returns

In most cases, an online customer has the right to return goods within a set period, even without giving a reason. So prepare a clear process for returns and for booking them, so that returns do not catch you off guard. A good complaints system also builds customer trust and reduces the number of disputes. Describe the returns procedure clearly right on your website and be accommodating when communicating with the customer – a satisfied customer will come back even after an unsuccessful purchase, while a disappointed one will put others off with a review.

When to bring in an expert

As the number of orders and cross-border sales grows, so does the complexity of the accounting. If the administration of your e-shop starts to become too much for you, working with an accountant pays off. You gain the certainty that you are meeting all your obligations and can focus on growing your sales. An expert will also help you set up processes so that, as orders increase, you do not drown in paperwork but have time for your product and your customers.

Related articles: Running a business while receiving unemployment benefit, How to set prices for your services and products, Switching from a trade licence to an s.r.o.: when it makes sense.

Frequently asked questions

What information must an e-shop publish?

An e-shop must state the operator’s identification details, terms and conditions, a complaints procedure, full information on the price and delivery, information on withdrawal from the contract and its personal data processing policy. Check the specific requirements in up-to-date sources.

How should I handle the accounting when selling abroad?

When selling to customers in other EU countries, special rules for cross-border sales and VAT apply. As the limits and obligations are more complex and change over time, we recommend discussing them with an accountant to avoid mistakes.