.svg)
If I had a pound for every time a client showed me a screenshot of a 5.0 ROAS on Facebook or TikTok while their bank balance was going backwards, I’d have retired by now.
It is 2026. The "growth at all costs" era is dead. Yet, I still see founders celebrating top-line revenue while haemorrhaging cash on the backend.
As a specialist ecommerce accountant UK brands trust to handle their finances, I see the reality behind the dashboards. The uncomfortable truth is that Return on Investment (ROI) and Return on Ad Spend (ROAS) are vanity metrics. They don't pay your VAT bill, and they certainly don't pay you.
If you are running a Shopify store, an Amazon FBA brand, an Etsy shop, or scaling on TikTok Shop, you need to stop looking at revenue and start obsessing over Net Profit. Here is why your metrics need a serious overhaul this year.
ROAS is dangerous because it is incomplete. It tells you how much revenue your ad generated, but it completely ignores the costs required to fulfil that order.
In the fast-paced world of social commerce, fees eat margins for breakfast. You might see a £50 sale from £10 ad spend (a 5.0 ROAS). Looks brilliant, doesn’t it?
But let’s look at the actual breakdown:
You are doing all that work for less than a fiver. And that is before you factor in your fixed operating expenses like software subscriptions, accountancy fees, or your own salary.
Key Takeaway: A high ROAS does not guarantee profitability. It only measures marketing efficiency, not business health.
The digital landscape has shifted. Customer Acquisition Costs (CAC) have risen sharply as privacy regulations have killed off third-party cookies. We are flying partially blind compared to five years ago, making every penny of ad spend riskier.
For our clients who are influencers and affiliates, the landscape is even trickier. While platforms like TikTok Shop are booming, the backend infrastructure hasn't caught up.
Here is the reality no one talks about: The integration software for creators and affiliates simply doesn't really exist yet.
Unlike a Shopify seller who can plug Link My Books into Xero and have everything reconcile automatically, creators are often left with a messy CSV and a headache. Payouts from platforms often lump together affiliate commission, creator fund rewards, and product sales, making it a nightmare to separate taxable income from non-taxable elements without manual intervention.
If you are relying on generic automated tools to tell you your profit, they are likely getting it wrong.
To fix your cash flow, you need to track the right metrics. We advise our clients to look at Contribution Margin (CM) levels before arriving at Net Profit.
What is the difference?
What this means for you:
If your CM1 is low, no amount of "optimising ads" will save you. You need to renegotiate with suppliers or raise prices. If your CM1 is healthy but CM2 is negative, your ads are bleeding you dry.
Smart brands have stopped bidding on ROAS and started bidding on POAS (Profit on Ad Spend).
What is POAS?
POAS measures the profit generated by an ad, rather than the revenue.
The Formula:
How to use it
If your break-even POAS is 1.0, any campaign above 1.0 is adding cash to the business. This allows you to scale winning campaigns aggressively without worrying that you are secretly losing money on every sale due to hidden costs.
We help our clients set up custom dashboards in Xero or specialised analytics tools to track this daily. You cannot wait for the end-of-month P&L to know if you made money on Tuesday.
In 2020, you could sell an ecommerce brand based on revenue multiples. In 2026, aggregators and investors are looking at EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation).
They don't care if you turned over £2 million if you lost £50k doing it.
Focusing on Net Profit proves your business is sustainable. It shows you have control over your unit economics and aren't just renting revenue from Zuckerberg or ByteDance. A smaller, highly profitable business is worth significantly more—and is far less stressful to run—than a bloated, break-even giant.
Sam Hoye is the founder of Social Commerce Accountants, a specialist firm dedicated to helping UK ecommerce businesses, influencers, and TikTok Shop sellers navigate the complex world of digital finance.
Unlike traditional high-street accountants who don't know a ROAS from a refund, Sam combines deep technical accounting expertise with real-world knowledge of the ecommerce stack. Whether it is untangling Amazon settlements or advising on international tax compliance for Shopify brands, Sam helps sellers keep more of what they earn.
COPYRIGHT © 2025 SOCIAL COMMERCE ACCOUNTANTS | SOCIAL COMMERCE ACCOUNTANTS LIMITED IS REGISTERED IN ENGLAND UNDER 13802919. REGISTERED ADDRESS: UNIT D2 OFFICE 2, STATION ROAD, SAWBRIDGEWORTH, ENGLAND, CM21 9JX. VAT REGISTRATION NO: GB 400 3244 64
Forget generic templates. Answer a few quick questions and our AI will generate a custom 12-month Excel profit engine tailored to your specific marketplace and supply chain.
Logic that adapts to your setup—whether you sell on Shopify, Amazon FBA, or TikTok Shop.
We bake in the hard stuff: UK VAT, EU OSS, and complex landed cost calculations automatically.
A professional-grade dashboard delivered instantly. See your real margins and forecast with confidence.
