Audit Readiness and Internal Controls for E-Commerce Companies in UAE

What slows down an e-commerce company year-end

• Payment gateway settlements. Gateway fees, chargebacks and settlement timing create differences between sales and cash received.
• Marketplace reports. Each marketplace reports sales, commissions and refunds differently, so they need mapping to your ledger.
• Returns and cash on delivery. Return provisions and uncollected COD amounts need to be measured, not ignored.
• Cross-border sales and imports. Import VAT, customs charges and overseas customers affect your tax coding.

Building a sales-to-bank reconciliation chain

For an online business, the chain that matters runs from order to payout to bank. Start with gross orders from the store platform, deduct cancellations and refunds, then deduct gateway or marketplace fees, and you arrive at the expected payout. That figure should match the deposit that reaches your bank account, allowing for the settlement lag.

Build this as a table by channel and by week. The difference is usually one of four things when the table does not close. It may be a chargeback or a fee deducted at a different time from the sale. It may also be a payout held as a reserve or an order recorded in the wrong period. Naming the cause in a note beside each difference gives a reviewer confidence that nothing is being buried.

Inventory spread across locations

Online sellers often hold stock in their own warehouse, at a third-party fulfilment centre and in transit. Keep a stock report per location and one combined summary, and agree the combined figure to the inventory account each month.

Stock sent to a fulfilment centre stays yours until it is sold, so a transfer should move quantity between locations without touching the income statement. Damaged, lost or returned-unsellable items need a write-off entry with a reason, otherwise the book quantity drifts away from the physical count.

Where a fulfilment centre sends you a monthly stock report, compare it with your own records by item code. Chase any variance at once, since the fulfilment centre's report is the evidence of what you hold there.

Customer data, fees and advertising spend

Marketplace commissions, fulfilment fees, storage fees and ad spend arrive in different formats. Create separate expense accounts for each rather than one catch-all, so margin by channel can be calculated.

Advertising invoices from overseas platforms should be kept with the billing statement and the card payment that settled them. Check how the supply is treated for VAT. Confirm the current position with the Federal Tax Authority where you are unsure. Errors on foreign supplier invoices are easy to repeat every month.

Keep a monthly summary that lists gross sales, fees, ad spend and net contribution for each channel, so a loss-making channel is spotted early.

Paperwork that answers questions

• Monthly sales report per platform reconciled to the ledger
• Payment gateway statements with fee breakdowns
• Returns and refunds register
• Courier COD remittance reconciliations
• Stock records across warehouses and fulfilment centres
• Advertising spend by platform with invoices

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