DTC bookkeeping is mostly reconciliation. A payment processor deposits a batch, you match it to a payout report, and the month closes itself. Wholesale bookkeeping is different because every sale becomes a document that lives for weeks: an invoice raised, unpaid, partly paid, credited, disputed, then settled by a bank transfer with a reference nobody filled in properly.
The routine below covers it. It takes about an hour a week and a half day at month end, and it is the difference between knowing what you are owed and guessing.
Set up the accounts once
Before the first wholesale invoice, add a small number of accounts to your books so that everything afterwards has somewhere to land.
- Wholesale revenue, separate from store revenue
- Accounts receivable, where unpaid invoices sit
- Wholesale cost of goods, so the channel's margin is visible
- Outbound freight — wholesale, separate from consumer postage
- Credits and allowances, a contra-revenue account for credit notes and deductions
- Samples, so product given away is not silently a cost of sales
That is six lines and it takes twenty minutes. Every report you want later — channel contribution, receivables aging, what samples really cost — comes from having done this at the start rather than trying to separate a year of mixed transactions afterwards. What you do with those numbers once they exist is in wholesale accounting.
Invoice numbering and the reference that gets paid
Use one continuous, sequential invoice series with no gaps. Not one per customer, not a reset each year, not a number that encodes the date.
Then put every reference the payer might use on the document itself: your invoice number, your order number, and their purchase order number. Shops match payments by purchase order number and pay by invoice number, and an invoice missing either one sits in a query pile while your terms run down.
Send the invoice by email on the day you ship, to the person who pays rather than the buyer. In many shops those are different people, and an invoice sitting in a buyer's inbox is an invoice that has not started counting. What belongs on the document is in the wholesale invoice.
Record it in your books the same day. An invoice that exists in your email and not in your ledger is not being tracked by anyone.
The receivables list, and how to work it
The single most useful document in wholesale bookkeeping is a list of unpaid invoices grouped by age.
| Bucket | What it means | Action |
|---|---|---|
| Not yet due | Terms still running | Nothing |
| One to thirty days over | Usually an oversight | Polite reminder |
| Thirty-one to sixty over | A pattern forming | Phone call |
| Over sixty | A problem | Stop supply, escalate |
Run it weekly, not monthly. Chasing at the right moment is mostly a matter of being early and unembarrassed about it — a short email on the day after an invoice falls due gets paid far more often than a stern one a month later, and it costs nothing in goodwill because it reads as admin rather than accusation.
Two habits keep the list short. A first order prepaid, always, before terms are granted at all. And a stated rule that new orders do not ship while an invoice is overdue, applied evenly so it is a policy rather than a judgement about a particular shop. What you are agreeing to with longer terms is in net 60 terms.
Credit notes: number them, do not just deduct
When a case arrives broken or a shipment goes short, resist the temptation to settle it by email arithmetic.
Raise a numbered credit note that references the original invoice, states what it is for, and carries the same tax treatment as the invoice it corrects. Post it to the credits and allowances account. Then either let the account offset it against the invoice or apply it to their next order.
Two reasons this matters. Reconciliation: a shop that pays an invoice short by the value of two broken candles produces a mismatch you will otherwise spend twenty minutes investigating every single month. And visibility: credits posted to their own account show you what damage and errors actually cost over a year, which is a number worth knowing before you decide your packaging is adequate. The handling side of it is in wholesale returns.
Matching remittances, including the partial ones
Payments rarely arrive as one clean transfer matching one invoice.
A shop pays three invoices in one transfer. Another pays one invoice less a credit note. A larger account pays a batch with deductions coded on a remittance advice you have to request. A bank transfer arrives with a reference that is the shop's own internal number and means nothing to you.
The routine that keeps this sane: never bank an unmatched payment into a general revenue line. Hold unidentified receipts in a suspense account until you know what they are, and clear that account every week. Ask any account that pays in batches to send a remittance advice, and most will once asked.
For larger retailers, reconcile deductions individually rather than accepting the net figure. An unexplained short payment that goes unchallenged becomes the amount they pay next time too.
Inventory, cost of goods and the entry people skip
Wholesale makes inventory accounting matter in a way that low-volume DTC did not, because a single order can move a meaningful share of your stock in one movement.
The simple approach that works for a small brand: hold production costs in inventory when a run is completed, and release them to cost of goods when an order ships. That way the margin on a shipment appears in the month the shipment happened, rather than the month you paid the manufacturer.
Count stock properly at least twice a year, and value it at what it cost rather than what you hope to sell it for. Then compare the count against your records. The gap tells you about samples not recorded, damages not written off, and picking errors nobody reported — all three are common and all three are quietly expensive.
Write off genuinely dead stock rather than carrying it. A pallet of a discontinued scent valued at cost is a number that makes your accounts look better and your decisions worse.
The tax lines, kept separate from the start
Wholesale sales are usually exempt and store sales usually are not, and the two need to be distinguishable in the ledger every month rather than reconstructed at filing time.
Keep exempt wholesale revenue on its own account, keep the resale certificates filed by account name, and keep freight on its own line because its tax treatment differs by jurisdiction. Then a return is a report rather than an investigation. The certificate handling itself is in wholesale sales tax.
The month-end checklist
Half a day, in this order, and the month is closed.
Raise any invoices for shipments that went out and were not billed. Post credit notes. Clear the suspense account. Run the receivables aging and send this month's chases. Record the freight bills, which usually arrive late and get forgotten. Post the month's samples out of inventory. Reconcile the bank. Then look at two reports: contribution by channel, and the aging list.
Everything else your accountant needs at year end falls out of having done this twelve times.
If the checklist feels heavy for the number of accounts you have, that is a signal about where your attention belongs. Paste your product link into WholesalePilot and look at the preview of retailers that stock products like yours — bookkeeping scales fine, and finding the accounts is the part that does not happen by itself.
Questions brands ask about wholesale bookkeeping
Cash basis or accrual? Accrual, once you have receivables. Cash basis hides the gap between shipping and being paid, which is the main risk in this channel.
Do I need separate software for wholesale? No. Your existing bookkeeping package handles invoices and receivables; what it needs is the account structure above and a tag that separates the channels.
How long should I keep invoices and certificates? As long as your jurisdiction requires for tax records, which is usually several years. Keep them in one folder per account so a request is a two-minute job.
When should I hand this to a bookkeeper? When the weekly hour becomes two and the month end slips. That is usually somewhere around twenty active accounts, and it is a good problem.