Selling through Shopee, Lazada, Amazon or your own Shopify storefront changes the way money moves through a business, and that in turn changes how the books need to be kept. Marketplace payouts arrive net of commissions, advertising charges, shipping subsidies and refunds, so the sum that lands in your bank account is almost never the amount you actually sold. The accounting considerations for e-commerce and marketplace sellers therefore start with one principle: your accounts must show gross revenue and each cost separately, not a single netted-off deposit.
This matters because ACRA and IRAS both expect a Singapore company to keep records that explain every transaction, and because GST registration thresholds are tested on gross turnover. A seller who books only net payouts can understate revenue by twenty to thirty per cent and discover, far too late, that GST registration became compulsory months earlier. Good e-commerce accounting in Singapore is less about clever software and more about reconciling what the platform reports against what the bank received.
Who this applies to
These considerations apply to almost any Singapore-incorporated business that sells goods or digital products online, including:
- Marketplace sellers on Shopee, Lazada, Amazon, Qoo10, TikTok Shop, Etsy or similar platforms
- Direct-to-consumer brands running Shopify, WooCommerce or Wix storefronts
- Dropshippers and print-on-demand sellers who never physically hold stock
- Cross-border sellers shipping into or out of Singapore, or holding inventory in overseas fulfilment centres
- Hybrid businesses with both a physical retail presence and online channels
- Sellers of digital services, subscriptions, courses or downloadable products
Sole proprietors and partnerships face the same commercial complexity, though their filing obligations differ. If you trade through a private limited company, the full set of Companies Act and Income Tax Act record-keeping duties applies from day one.
Key rules and requirements in Singapore
Proper accounting records under the Companies Act
Section 199 of the Companies Act requires a company to keep accounting records that sufficiently explain its transactions and financial position, and to retain them for five years. For an online seller, platform settlement reports form part of those records. A bank feed alone cannot explain a payout, because it does not show the commission, refund or promotional rebate netted against it.
Revenue recognition
Under SFRS(I) 15, revenue is recognised when control of the goods transfers to the customer, which is usually on delivery rather than on order or on payout. Marketplace platforms typically hold funds for a settlement period, so revenue earned in one month may not be received until the next. Cut-off at Financial Year End is where most online sellers get caught.
Principal versus agent
If you set the price, carry the inventory risk and are responsible to the customer, you are the principal and you record gross revenue with platform commission as an expense. If you merely facilitate a sale for another party, you may be an agent recording only your commission. Dropshippers should look at this carefully, because the answer is not automatic.
GST
Compulsory GST registration is triggered when taxable turnover exceeds SGD 1 million for the past calendar year, or where you reasonably expect to cross that threshold in the next twelve months. Turnover is measured gross. Local sales are standard-rated, exports of goods are zero-rated where you hold the required export evidence, and the Overseas Vendor Registration and Low-Value Goods regimes may draw in sellers based outside Singapore.
Corporate tax and inventory
Trading income is taxable under the Income Tax Act. Stock must be valued at the lower of cost and net realisable value, and obsolete or unsold inventory cannot simply be ignored. Platform fees, advertising spend and fulfilment costs are generally deductible when incurred wholly and exclusively in producing the income.
Foreign currency
Sales in USD, MYR or other currencies must be translated for reporting, and exchange differences tracked. A foreign currency balance sitting in a payment gateway is an asset that has to be revalued at year end.
Step-by-step process
- Map every money flow. List each sales channel, payment gateway, marketplace wallet and bank account, then draw the path from customer payment to your bank. Most sellers find at least one holding account they had forgotten.
- Download settlement reports monthly. Pull the transaction-level report from each platform, not just the payout summary. Platforms purge older data, and these reports are your revenue source documents.
- Book gross, then deduct. Record gross sales, then post commission, transaction fees, advertising, shipping subsidies, refunds and chargebacks as separate lines. The net should then agree to the payout.
- Reconcile the clearing account. Route sales into a marketplace clearing account and clear it as payouts arrive. A persistent unexplained balance means something has been missed.
- Track inventory separately. Keep a stock ledger with quantities and cost, including goods at third-party fulfilment centres, and count stock at least annually.
- Monitor turnover against the GST threshold. Track rolling twelve-month gross taxable turnover so registration is never a surprise.
- Close each month properly. Accrue unbilled platform fees, record returns provisions, revalue foreign currency balances and review gross margin for anomalies.
- Prepare the year-end file. Financial statements, the tax computation, ECI and the annual return follow from clean monthly books, not a rushed reconstruction in month thirteen.
Common mistakes to avoid
- Recording only net payouts, which understates revenue and can hide a crossed GST threshold
- Treating the marketplace wallet balance as though it were cash in the bank
- Ignoring refunds and chargebacks that land after year end but relate to sales before it
- Missing GST on local sales because the platform collected the money, not the seller
- Failing to keep export evidence, which turns an intended zero-rated sale into a standard-rated one on audit
- Mixing personal and company payment methods for advertising spend
- Leaving inventory at third-party warehouses off the balance sheet entirely
- Relying on a bank feed alone, with no settlement report behind it
Practical examples
A Shopee seller with a payout gap. A homeware seller recorded SGD 640,000 of payouts and assumed it was safely under the GST threshold. Once commissions, advertising and shipping subsidies were added back, gross turnover was SGD 848,000. Two strong quarters later the company crossed SGD 1 million. Because turnover had never been tracked gross, registration was applied for late, and back GST and penalties followed.
A cross-border seller with stranded stock. A Singapore company holding SGD 90,000 of inventory in a Malaysian fulfilment centre left it out of the accounts because it was not physically in Singapore. The correction moved the company from a reported loss to a taxable profit, and the tax computation had to be revised.
A Shopify brand with a cut-off issue. Orders placed on 29 December were delivered on 3 January, but the revenue had been recognised in December because payment cleared then. Under SFRS(I) 15 both the revenue and the related cost of sales belonged to the new financial year.
How a corporate secretary can help
A corporate secretary keeps the statutory side of the company in order while the accounting side is built out, and the two intersect more often than owners expect. Directors’ resolutions for merchant accounts, updates to business activity codes on the ACRA BizFile+ portal when a new sales channel becomes material, maintenance of the registers and timely filing of the annual return all sit here.
Raffles Corporate Services supports online sellers with corporate secretarial work, bookkeeping built around marketplace settlement reports, GST registration and filing through the IRAS myTax Portal, corporate tax computations and ECI, and payroll with CPF contributions once the team grows. Keeping the filings and the books with one firm removes the gaps that appear when compliance is split across providers.
Frequently Asked Questions
Do I record the gross sale or the marketplace payout as revenue?
Where you are the principal, record the gross sale and treat platform commission, advertising and fees as expenses. The payout is the net cash outcome, not the revenue figure.
When must an online seller register for GST in Singapore?
When taxable turnover exceeds SGD 1 million for the past calendar year, or when you reasonably expect to exceed it in the next twelve months. Turnover is assessed on gross sales, so sellers using net figures often misjudge this.
Is inventory held overseas still an asset of my Singapore company?
Yes. If your company owns the goods, they belong on your balance sheet regardless of where they are physically stored.
How long do I need to keep platform settlement reports?
At least five years, in line with the Companies Act and IRAS record-keeping requirements. Download them regularly, because platforms do not keep historical data indefinitely.
Can I use the marketplace dashboard as my accounting system?
No. A dashboard shows platform activity for one channel. Your accounting records must cover the whole company, including bank accounts, loans, payroll and tax, and must be capable of producing statutory financial statements.
Key takeaways
- Always book gross revenue and separate each platform deduction, never the net payout alone
- Settlement reports, not bank feeds, are the source documents for e-commerce accounting in Singapore
- Track rolling gross turnover so GST registration is planned rather than discovered
- Recognise revenue on transfer of control, which makes Financial Year End cut-off a real risk
- Inventory at overseas fulfilment centres still belongs on your balance sheet
- Keep records for five years and reconcile clearing accounts every month
Requirements may change, so always check the latest guidance from ACRA, IRAS or MOM, or consult a professional adviser.
If you would like to find out more about how Raffles Corporate Services can assist with your company’s compliance and corporate secretarial requirements, please get in touch with the team at [email protected].
Yours sincerely,
The editorial team at Raffles Corporate Services
Disclaimer: This does not constitute legal advice. If you require legal advice, please contact a lawyer.