The payout is not the revenue
When Stripe, PayPal or Shopify Payments settles, the amount that arrives has already had several things removed: platform fees, payment processing fees, refunds issued in the same period, chargebacks, currency conversion spread and sometimes a rolling reserve. Booking that single figure as revenue understates your turnover, hides your real fee cost and produces a VAT return that does not match your sales data.
Done properly, one payout becomes several entries: gross sales, fees as an expense, refunds against the original sale, and the bank movement itself. That is more work, and it is the difference between accounts that survive a Tax Board query and accounts that do not.
A practical test: if your profit and loss shows a single line called "Stripe income", your VAT return is almost certainly wrong, because the VAT is calculated on the gross sale, not on what reached your account.
Cost of goods you never touch
In dropshipping you never hold stock, which makes people assume there is no cost of goods to account for. There is. The supplier invoice is your purchase, and it has to be matched to the sale it relates to if the margin figure is going to mean anything.
Suppliers on AliExpress, CJ or a private agent often issue nothing that resembles a compliant invoice. That is a real problem for input VAT deduction and for proving the expense at all. Getting proper documentation from the supplier is worth pushing for before volume grows.
Refunds are the most common single error
A refund is not an expense. It reverses a sale, and it has to reverse it in the same country and at the same VAT rate the sale was reported in. If a German customer is refunded and the credit is booked as a general cost, the German VAT you already paid through OSS is never recovered. Across a year of returns that is real money.
Multi-currency
Sales in one currency, supplier payments in another, a payout in a third. Each leg needs converting at the correct rate for the correct date, not at the rate the payment processor happened to use. The difference between the two is an exchange gain or loss, and it belongs in the accounts as such rather than quietly distorting your margin.
Chargebacks and disputes
A chargeback removes money weeks after the sale, often in a different VAT period. It needs treating as a reversal tied back to the original transaction, plus the dispute fee as a separate cost. Left as an unexplained bank debit, it silently overstates profit in one month and understates it in another.
What good bookkeeping looks like here
- Sales imported from the store or marketplace, not derived from bank deposits.
- Payout reconciliations that tie gross sales minus fees minus refunds to the exact amount received.
- Refunds matched to the original order, and therefore to the original country and rate.
- Supplier invoices attached to the orders they fulfilled.
- A quarterly sales report split by destination country and VAT rate, ready for the OSS return.
- Fees, ad spend and app subscriptions treated as reverse charge where the supplier is outside Estonia.
The signs your books are not keeping up
- Turnover in your accounts does not match turnover in the platform dashboard.
- The VAT return is prepared from bank movements rather than from sales data.
- Nobody can tell you the gross margin on a given product line.
- Advertising invoices from outside Estonia appear with no VAT treatment at all.
- You find out you crossed the €10,000 distance selling threshold when the year is already over.
None of this is exotic. It is simply a different shape of bookkeeping from a company that issues fifty invoices a month, and it needs to be set up that way from the start rather than reconstructed at year end.
Frequently asked questions
Can I just book my Stripe payouts as income?
No. The payout is already net of fees, refunds and chargebacks, so booking it as revenue understates turnover and produces an incorrect VAT return. Sales must come from the order data, with fees and refunds recorded separately.
Do I need cost of goods if I never hold stock?
Yes. The supplier invoice is a purchase and should be matched to the sale it fulfilled, otherwise your margin figures are meaningless and the expense may not be deductible without proper documentation.
How should refunds be recorded?
As a reversal of the original sale, in the same country and at the same VAT rate. Booked as a general expense, the VAT already paid on that sale is never recovered.
Tagsdropshipping accountingShopify bookkeepingStripe reconciliatione-commerce
General information, not tax advice
This article reflects Estonian law as it stands on the date shown. Rules change and individual circumstances differ - confirm your own position with us before acting.