Running a Shopify store can start off feeling simple. You set up your site, list some products, and then wait for orders to come in. When the first sale hits, it’s exciting. Then more sales follow, and suddenly it starts to feel like a real business. But what most people don’t realise is that once the money starts coming in, things get complicated fast — especially with the numbers.
Sales are fun to track. But accounting? Not so much. That’s the part most people push aside until it starts causing real problems.
Sales Aren’t the Same as Profit
Just because a store is getting orders doesn’t mean it’s actually making money. This is where a lot of sellers get confused. The number on the dashboard might show £1,000 in sales this week, but how much of that is really staying in the bank?
There are so many costs that pull money out of each sale — product costs, shipping, platform fees, returns, advertising, and more. After all that, the actual profit might be way lower than expected.
And then there’s tax. That’s one of the biggest surprises for new sellers, especially in the UK. Many don’t realise they need to register for VAT once they hit a certain threshold, or that they should be setting money aside throughout the year.
Some sellers choose to get outside help once their store starts growing. For those in the UK, it might help to speak to someone who actually understands how Shopify works. For example, Your Ecommerce Accountant works with online stores and knows what kinds of costs, rules, and tax problems come with them. Support like that can make things a lot less confusing.
The Shopify Dashboard Doesn’t Show Everything
It’s easy to rely on the Shopify dashboard. It gives you a clean view of total sales, refunds, and even traffic data. But what it doesn’t show is the full picture of your business’s money.
For example, it won’t show:
● How much you’re spending on ads
● What you owe in taxes
● The real cost of each product
● How much profit you’re keeping each month
If all you look at is the total sales number, it’s almost impossible to tell how healthy the business really is. That’s why it’s important to track every expense and make sure nothing is missing.
Even small costs, like monthly app charges or transaction fees, add up over time. If they’re not being tracked, they’ll sneak up on you — and they can take a big bite out of your profit.
UK Tax Rules Catch People Off Guard
One of the trickiest parts of selling online in the UK is dealing with tax. It’s not just about filling out forms at the end of the year — there are rules that kick in way earlier than most people expect.
For example, if your store earns over £90,000 in a 12-month period, you have to register for VAT. But many sellers don’t notice they’ve hit that point until they’ve already gone over it. That can lead to fines and a lot of stress.
Then there’s the difference between sole traders and limited companies. Each one has different tax responsibilities. If you’re not sure which one fits your business best, it’s easy to make mistakes — or miss out on money you could be saving.
Even things like keeping digital records properly are a legal requirement under the UK’s Making Tax Digital rules. And yes, that applies to ecommerce sellers too.
Returns Still Cost Money
When a customer returns something, it feels like a clean refund — but the truth is, it still costs money. You might not get back the transaction fees. You still have to pay for return shipping. And if the product is damaged or can’t be resold, that’s a total loss.
All of those costs need to be factored in. Otherwise, a store can look successful on the surface while slowly losing money behind the scenes.
It helps to track how often returns happen and why. If one product has a high return rate, that might mean something’s wrong — maybe the description isn’t clear enough, or the quality isn’t what buyers expected. Fixing those problems can protect your profits in the long run.
Ads Work — But Only When You Track Them
A lot of Shopify sellers rely on ads to drive traffic. Facebook, Instagram, Google — they all work if used the right way. But ads also get expensive fast.
If you’re spending £100 a day on ads and only making £120 in sales, that’s a problem. Once you subtract product costs, shipping, and fees, that £120 might only leave £10 or less. That means you’re actually losing money on every sale.
To avoid that, it’s important to track ad costs and match them to the profit from those sales. That’s called return on ad spend (ROAS). If it’s too low, it means your ads are costing more than they’re worth.
Growth Brings Bigger Problems
It’s easy to think more sales means less stress. But the truth is, when a store grows fast, problems grow with it. More orders mean more shipping, more returns, more questions from customers — and way more financial stuff to track.
That’s why setting up good systems early is so important. Simple things, like updating spreadsheets weekly or setting aside money for tax as soon as a sale comes in, can make a huge difference.
And when things really pick up, using proper accounting tools — or getting help from someone who knows Shopify — saves a lot of time and prevents mistakes.
Key Things to Watch If You Want to Stay in Control
There’s no way to avoid all the boring parts of running a store, but knowing what to focus on makes it easier. Here are a few things smart sellers track regularly:
● Total profit per product
● Ad spend vs. return
● Tax owed (monthly or quarterly)
● Refunds and return rates
● Monthly expenses, even the small ones
It doesn’t have to be complicated. But skipping these things makes it harder to grow and easier to make mistakes — especially when tax season comes around.
Why It All Matters
Selling online is a great way to build a business. It’s quick to start and fun to grow. But once the money starts coming in, it has to be taken seriously.
Accounting is what shows you if the store is actually working. It helps you stay out of trouble with tax rules, plan for growth, and keep more of what you earn. It’s not the most exciting part of ecommerce — but it’s one of the most important.
The sooner it’s handled right, the smoother everything else runs.
