Reseller Bookkeeping Basics: Track Your Flipping Business Finances 2026

Running a successful reselling business isn’t just about finding great deals and flipping items for profit—it’s about knowing exactly where your money goes and what you’re actually earning. Without proper reseller bookkeeping, you might think you’re making $500 a month when you’re really only netting $150 after expenses. Or worse, you could face a tax nightmare when you realize you have no records to support your deductions.

Whether you’re a casual flipper selling a few items per week or a full-time reseller moving hundreds of products monthly, establishing solid bookkeeping habits now will save you countless headaches later. In this comprehensive guide, we’ll walk you through everything you need to track reselling expenses, manage your business finances, and prepare for tax season with confidence.

Why Bookkeeping Matters for Resellers

Many resellers start their journey by casually selling items from around their house. A lamp here, some old clothes there—no real system needed. But once you start sourcing inventory intentionally, bookkeeping becomes essential for several critical reasons.

Know Your True Profit

That item you sold for $50 might feel like a win, but did you account for the $15 you paid for it, the $4.50 in shipping supplies, the $2 in eBay fees, the $0.75 in PayPal processing fees, and the $3.50 in gas to pick it up? Your actual profit was $24.25—less than half of what hit your bank account. Proper bookkeeping reveals your true margins.

Make Better Sourcing Decisions

When you track your expenses and profits by category, you start seeing patterns. Maybe vintage clothing gives you 60% margins while electronics only net 25% after returns. This data drives smarter sourcing decisions that maximize your hourly earnings.

Prepare for Taxes

The IRS considers reselling income taxable whether you receive a 1099-K or not. Good records ensure you can claim every legitimate deduction while having documentation ready if questions arise. Check out our complete Reseller Taxes Guide for detailed tax information.

Secure Business Financing

If you ever want a business loan, line of credit, or even just a business credit card, lenders will want to see organized financial records demonstrating your income and business viability.

Separating Personal and Business Finances

The single most important bookkeeping step you can take is separating your personal and business finances. Mixing them creates a tracking nightmare and raises red flags with the IRS.

Open a Dedicated Business Bank Account

You don’t need an LLC or formal business structure to open a business bank account—many banks offer free business checking for sole proprietors. Look for accounts with:

• No monthly maintenance fees (or low minimum balance requirements)
• Free basic transactions
• Mobile deposit capabilities
• Integration with accounting software
• A debit card for business purchases

Popular options include Chase Business Complete Banking, Bank of America Business Fundamentals, and online options like Novo or Bluevine that cater specifically to small businesses.

Get a Business Credit Card

A dedicated business credit card provides several advantages:

• Automatic expense categorization: Most card issuers categorize purchases automatically
• Detailed annual summaries: Year-end reports show spending by category
• Rewards on business spending: Earn cash back or points on sourcing trips, shipping supplies, and more
• Credit building: Establishes business credit separate from personal credit
• Liability protection: Keep business debt separate from personal finances

Cards like the Chase Ink Business Cash or American Express Blue Business Cash offer solid rewards without annual fees.

Use Business Accounts Exclusively for Business

Once you have dedicated accounts, commit to using them exclusively for business transactions:

• Pay for all inventory with your business card or account
• Deposit all sales revenue into your business account
• Pay business expenses (supplies, fees, mileage reimbursement) from business funds
• Transfer profits to personal accounts as owner’s draws

This clean separation makes tracking infinitely easier and provides clear documentation for tax purposes.

Essential Expense Categories for Resellers

To track reselling expenses effectively, you need to categorize them properly. Here are the main categories every reseller should track:

Cost of Goods Sold (COGS)

This is your largest expense category—what you pay for inventory:

• Purchase price of items: What you paid at thrift stores, garage sales, estate sales, auctions, wholesalers
• Lot purchases: When you buy items in bulk
• Wholesale inventory: Items purchased from liquidators or distributors
• Online sourcing: Items bought from other platforms for resale

Track each item’s cost individually when possible, or use reasonable estimation methods for bulk purchases.

Shipping and Packaging Supplies

Everything related to getting items to buyers:

• Boxes and mailers: Poly mailers, bubble mailers, cardboard boxes
• Packing materials: Bubble wrap, packing paper, packing peanuts, tape
• Labels and printer supplies: Thermal labels, ink, printer paper
• Shipping carriers: When you pay shipping out of pocket
• Packaging accessories: Thank you cards, tissue paper, branded materials

Platform and Payment Processing Fees

Fees charged by selling platforms and payment processors:

• Marketplace fees: eBay final value fees, Poshmark commission, Mercari fees
• Payment processing: PayPal fees, Stripe fees, managed payments deductions
• Store subscription fees: eBay Store subscriptions, Amazon Professional selling fees
• Promoted listings: Advertising fees on platforms

Business Operations

General business expenses:

• Software subscriptions: Listing tools, inventory management software, Underpriced credits
• Office supplies: Pens, notebooks, file folders, desk supplies
• Storage: Shelving, storage bins, organization supplies
• Equipment: Cameras, lighting, mannequins, photo props
• Phone/internet: Business portion if used for reselling
• Professional services: Accountant fees, legal consultations

Vehicle and Travel Expenses

Costs related to sourcing and shipping:

• Mileage: IRS standard rate (67 cents per mile in 2026) OR actual vehicle expenses
• Parking fees: When sourcing at estate sales, auctions, or stores
• Tolls: Highway tolls during sourcing trips
• Travel: If you travel to source inventory (hotel, flights, meals)

Important: You can choose the standard mileage deduction OR actual expenses—not both. Track miles regardless so you can compare which method benefits you more.

Education and Professional Development

Investments in growing your knowledge:

• Courses and training: Reselling courses, platform-specific training
• Books and resources: Business books, price guides
• Conference/event fees: Reseller meetups, trade shows
• Membership fees: Reseller communities, professional organizations

Spreadsheet Templates for Reseller Bookkeeping

For many resellers, especially those just starting out, a well-designed spreadsheet provides all the bookkeeping functionality needed. Here’s how to set up an effective system.

Basic Income and Expense Tracker

Create a spreadsheet with these columns for each transaction:

Inventory Tracking Sheet

Track your current inventory with:

Mileage Log

The IRS requires contemporaneous mileage records:

Monthly Summary Dashboard

Create a summary sheet that pulls data from your transaction log:

JANUARY 2026 SUMMARY
--------------------
Gross Sales:           $2,847.00
Cost of Goods Sold:    $  612.00
Gross Profit:          $2,235.00

EXPENSES:
Platform Fees:         $  398.58
Shipping Supplies:     $   87.45
Mileage (234 mi x $0.67): $156.78
Software/Subscriptions:$   29.99
Other Expenses:        $   45.00
Total Expenses:        $  717.80

NET PROFIT:            $1,517.20
Profit Margin:         53.3%

Google Sheets vs. Excel

Both work well for reseller bookkeeping:

Google Sheets advantages:

• Free access from any device
• Automatic cloud backup
• Easy sharing with accountants
• Built-in collaboration features

Excel advantages:

• More powerful formulas and features
• Works offline
• Better for complex calculations
• More formatting options

Many resellers use Google Sheets for accessibility and simplicity.

Accounting Apps for Resellers

As your business grows, dedicated accounting software offers advantages over spreadsheets: automatic bank feeds, receipt capture, professional invoicing, and tax-ready reports.

Wave Accounting (Free)

Best for: Budget-conscious resellers, beginners, single-platform sellers

Wave offers completely free accounting software with impressive features:

Pros:

• Truly free—no hidden costs for core accounting
• Bank and credit card connections
• Income and expense tracking
• Financial reports (P&L, balance sheet)
• Receipt scanning via mobile app
• Invoice creation
• Unlimited transactions

Cons:

• Limited inventory tracking
• No project tracking
• Customer support can be slow
• Payment processing has fees

Setup tip: Connect your business bank account and credit card, then create categories matching the expense categories listed above.

QuickBooks Self-Employed

Best for: Solo resellers focused on tax deductions, mileage trackers

Priced around $15/month, QuickBooks Self-Employed targets gig workers and sole proprietors:

Pros:

• Automatic transaction import and categorization
• Built-in mileage tracking with GPS
• Quarterly estimated tax calculations
• Receipt capture and matching
• Schedule C preparation
• Integration with TurboTax

Cons:

• Limited to self-employment features
• Can’t track inventory well
• No invoicing in basic plan
• Must upgrade as business grows

Best feature: The automatic mileage tracking alone can justify the subscription cost if you do regular sourcing runs.

QuickBooks Simple Start

Best for: Growing resellers, multi-platform sellers, those needing inventory basics

At approximately $30/month (often discounted for the first year), Simple Start offers more robust features:

Pros:

• Full double-entry accounting
• Basic inventory tracking
• Professional invoicing
• Accepts payments
• Robust reporting
• 1099 contractor tracking
• Accountant access

Cons:

• Monthly cost adds up
• Can be complex for beginners
• Inventory features still limited for high-volume sellers
• Learning curve

GoDaddy Bookkeeping

Best for: eBay and Etsy sellers specifically

GoDaddy Bookkeeping (formerly Outright) was designed specifically for online sellers:

Pros:

• Direct integration with eBay, Etsy, Amazon
• Automatic import of sales and fees
• Seller-specific reports
• Mileage tracking
• Tax estimates
• Affordable ($4.99-$14.99/month)

Cons:

• Limited to supported platforms
• Basic features compared to QuickBooks
• Less robust for multi-channel sellers
• Owned by GoDaddy (some prefer independent solutions)

Choosing the Right Solution

Here’s a quick decision framework:

• Under $500/month in sales: Free spreadsheet or Wave
• $500-$2,000/month: Wave or QuickBooks Self-Employed
• $2,000-$5,000/month: QuickBooks Simple Start or GoDaddy Bookkeeping
• $5,000+/month: QuickBooks Online Plus with inventory features

Start simple and upgrade as needed—there’s no benefit to paying for features you won’t use.

Daily, Weekly, and Monthly Bookkeeping Routines

Consistent habits prevent bookkeeping from becoming overwhelming.

Daily Tasks (5-10 minutes)

• Record sales: Log each sale with relevant details
• Capture receipts: Photograph or scan any purchase receipts
• Log mileage: Record sourcing or shipping trips while fresh in memory
• Quick review: Glance at your banking app for any transactions to note

Weekly Tasks (30-45 minutes)

• Reconcile transactions: Match bank transactions with your records
• Process invoices: Record any pending payments or fees
• Update inventory: Mark sold items, add new inventory
• Review pending shipments: Ensure all orders are tracked
• File receipts: Organize physical receipts by month

Monthly Tasks (1-2 hours)

• Bank reconciliation: Ensure all transactions are accounted for
• Generate profit/loss report: Review income vs. expenses
• Analyze category spending: Look for unusual patterns
• Inventory review: Count active inventory, check for stale items
• Profit margin analysis: Calculate margins by category
• Prepare for quarterly taxes: Set aside estimated tax payments

Quarterly Tasks (2-3 hours)

• Pay estimated taxes: Federal and state if required
• Deep financial review: Analyze trends across the quarter
• Inventory valuation: Update cost basis for active inventory
• Deduction review: Ensure all deductible expenses are captured
• Business expense review: Cancel unused subscriptions, optimize costs

Preparing for Tax Season

Good bookkeeping throughout the year makes tax season straightforward rather than stressful.

Documents to Prepare

Gather these items before meeting with your accountant or filing:

• Income summary: Total sales by platform (1099-Ks if received)
• Expense summary: Totals by category
• Cost of goods sold: Total inventory costs for items sold
• Mileage log: Total business miles driven
• Home office calculations: If applicable
• Receipt backup: Organized by category
• Bank and credit card statements: To verify numbers

Schedule C Overview

Resellers typically file Schedule C (Profit or Loss from Business) with their personal tax return. Key lines include:

• Line 1: Gross receipts (total sales)
• Line 4: Cost of goods sold
• Line 7: Gross profit (Line 1 minus Line 4)
• Lines 8-27: Various expense deductions
• Line 31: Net profit (or loss)

Common Reseller Deductions

Don’t miss these legitimate deductions:

• Cost of goods sold (inventory costs)
• Platform selling fees
• Payment processing fees
• Shipping supplies and postage
• Business mileage
• Home office (if dedicated space)
• Phone and internet (business portion)
• Software and subscriptions
• Education and training
• Equipment and supplies
• Professional services (accountant, bookkeeper)
• Business insurance
• Bank and credit card fees

For comprehensive tax guidance, see our detailed Reseller Taxes Guide.

Year-End Inventory Considerations

You’ll need to determine your inventory cost method:

• Specific identification: Track exact cost of each item (best for resellers)
• FIFO (First In, First Out): Assume oldest inventory sells first
• Average cost: Average all inventory costs together

Most resellers should use specific identification since tracking individual item costs provides the most accurate profit calculations and you’re already doing it for pricing purposes.

Tools to Streamline Your Bookkeeping

Leverage technology to automate as much as possible:

Receipt Management

• Dext (formerly Receipt Bank): Automatically extracts data from receipt photos
• Expensify: Popular expense and receipt tracking
• Your phone’s camera: At minimum, photograph every receipt immediately

Bank Feed Automation

Most accounting software connects directly to banks for automatic transaction import. This eliminates manual entry and reduces errors.

Profit Analysis

Use Underpriced.app to analyze potential profit on items before you buy them. Knowing your estimated margins upfront helps with accurate COGS tracking and pricing strategy.

Spreadsheet Formulas

If using spreadsheets, leverage formulas to automate calculations:

• SUMIF: Sum expenses by category
• AVERAGEIF: Calculate average margins by source
• COUNTIF: Track items sold by platform
• Pivot tables: Create dynamic summary reports

Common Bookkeeping Mistakes to Avoid

Learn from others’ errors:

Mixing Personal and Business Expenses

The most common mistake. Even small personal purchases on business accounts create headaches at tax time and raise audit red flags.

Not Tracking Small Expenses

Those $3 garage sale purchases add up. A $5 roll of tape here, $8 in parking there—skipping “small” expenses can mean missing hundreds in annual deductions.

Forgetting to Log Mileage

Mileage is often a reseller’s largest deduction, but the IRS requires contemporaneous records. “Estimating” at year end isn’t acceptable and leaves money on the table.

Delaying Bookkeeping

Letting transactions pile up leads to forgotten expenses, missing receipts, and bookkeeping becoming an overwhelming task. Stay current!

Not Backing Up Records

Keep digital copies of everything. Cloud storage, external drives, or printed copies—losing your records could be financially devastating.

Ignoring Platform Fee Breakdowns

Platforms charge various fees (final value, promoted listing, payment processing). Track them separately to understand your true costs per platform.

Getting Professional Help

At some point, professional assistance makes sense.

When to Hire a Bookkeeper

Consider a bookkeeper when:

• You’re spending more than 5 hours monthly on bookkeeping
• Your time is worth more than bookkeeping costs ($100-300/month typically)
• You’re making errors that cost money or stress
• Your business is growing and bookkeeping is falling behind

When to Hire an Accountant

An accountant adds value when:

• Your annual revenue exceeds $30,000-50,000
• You’re unsure about deductions or tax strategies
• You’re considering business structure changes (LLC, S-Corp)
• You received an IRS notice
• Tax law changes affect your business

Finding Reseller-Savvy Professionals

Look for accountants and bookkeepers who understand e-commerce and reselling:

• Ask in reseller communities for recommendations
• Search for “e-commerce accountant” or “eBay seller accountant”
• Interview candidates about their experience with reseller clients
• Verify they understand platform fees, inventory accounting, and Schedule C

Building Your Bookkeeping System: Action Steps

Ready to get started? Here’s your action plan:

This week:

1. Open a business bank account and credit card
2. Choose your bookkeeping method (spreadsheet or software)
3. Set up expense categories
4. Start a mileage log

This month:

1. Log all transactions going forward
2. Photograph and file all receipts
3. Calculate your current inventory value
4. Set up a weekly bookkeeping appointment with yourself

Ongoing:

1. Maintain daily receipt capture
2. Complete weekly reconciliation
3. Review monthly reports
4. Prepare quarterly for taxes

Conclusion

Proper reseller bookkeeping isn’t just about satisfying tax requirements—it’s about understanding your business, maximizing profitability, and making informed decisions. The resellers who know their numbers are the ones who build sustainable, growing businesses.

Start with the basics: separate accounts, consistent tracking, and regular review. Whether you use a simple spreadsheet or sophisticated software, the key is consistency. Just 10-15 minutes daily keeps everything current and transforms tax season from a nightmare into a simple review.

Your future self will thank you when tax time arrives and everything is organized, when you can see exactly which sourcing strategies work best, and when you have the financial records needed to take your reselling business to the next level.

Need help analyzing whether items are worth flipping? Try Underpriced.app to instantly see profit potential before you buy—because the best bookkeeping starts with knowing your numbers upfront.