Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
Amazon entrepreneurs have been saving a lot of resources by taking their business online. Just imagine getting access to more than 190 million monthly visitors, all at the comfort of your home office. It’s no wonder traditional businesses are switching over.
However, the trade-off for everything you saved by going virtual is other resource-consuming endeavors. One of them is accounting.
Luckily, there's always a way to save time, money, and effort while staying on top of your Amazon game. For example, you can outsource your accounting department to experts. And here are nine reasons why you should.
1. You'll Save Time
Let's say you want to do your bookkeeping yourself. Here's how that could go.
- You'll pore over piles of financial documents and receipts for hours, kicking yourself for letting them accumulate on your desk.
- You'll record the transactions one by one in your softbound journal; if you're using a spreadsheet or accounting software, then things might be a little easier.
- When you attempt to do a trial balance, the amounts might not be equal. So you’d spend some more of your time trying to find what went wrong.
The list can go on, but the point is that doing your own Amazon bookkeeping—even when you know what you're doing—can cost you a lot of time. How much more if you're not familiar with how it works? So save yourself time and get Amazon seller accounting services.
2. Better Than In-House
Hiring an in-house bookkeeper is one way to go. But it may not be as practical as outsourcing your accounting service.
Just think about the entire process of setting up an accounting department. First, you'll be spending some time finding, screening, and interviewing candidates. Then, once you have a new hire, you'll need to bring them up to speed on the inner workings of your business.
That takes time.
In addition, consider that the bookkeeper you hired may end up quitting after several months. Then, you're back to hiring and onboarding another employee.
Outsourcing virtually eliminates this recruitment and attrition issue. An outsourced Amazon Seller Central accounting team can get off the ground faster than an in-house hire.
3. Accurate and Timely Recording
While it's great to have financial statements generated annually, it only gives you an overview of your business performance in a year. Your Amazon business is subject to constant change, so as much as possible, you must have updated information given in shorter intervals.
Outsourcing Amazon accounting will give you financial statements in a timely and accurate manner. It will also give other relevant data to better position your Amazon business for growth and profitability.
4. Tax Compliance
Amazon sellers must pay at least two major taxes: income tax and sales tax.
As a business owner, you might know your tax obligation, but you might not understand how to pay it. That's why some Amazon businesses remain non-compliant when it comes to paying taxes; worse, they may not pay it at all.
It's better to get Amazon seller account accounting as early as possible to avoid getting in trouble with tax collectors. It will also relieve you of the headache of learning how to file and what rules and regulations to follow. Let the professionals provide accurate financial statements and relay them to a CPA for your income and sales tax filing.
5. A Prerequisite for Borrowing Additional Capital
Applying for a business loan requires that you produce a financial statement. Financial statements give lending institutions an idea if your business can stay for the long haul until you can pay them with interest. More importantly, it also helps you assess your business’s capacity to remain afloat before taking on something as risky as getting into debt.
You can quickly get financial statements when you outsource your accounting services.
6. Attracting Potential Investors
If your Amazon business is expanding rapidly, you'll need to infuse it with enough working capital to sustain it. The lack of it may put your business in stagnation.
One way to do that is to look for potential investors. Like lenders, they'll want to see accurate financial statements to quickly assess their risk exposure before placing their bets.
An Amazon seller accounting service makes generating a financial statement easier than doing it yourself or hiring an in-house employee to do it for you.
7. More Detailed Inventory Figures
In an ecommerce business such as Amazon, inventory and cost of goods sold (COGS) are important, if not the only things you need to watch closely. Unlike brick-and-mortar businesses, your Amazon store doesn't have utility, transportation, or repair expenses.
For effective inventory management of your Amazon store, you’ll need information about your products that lets you know whether they are selling at the highest profit possible.
Amazon seller account accounting services come with detailed inventory and an accurate calculation of COGS. In addition, they can give you a breakdown of your sales and the figures associated with the sale of a unit of product. That way, you can decide what needs adjustment to realize a better profit margin for each unit of product sold.
8. Tap Specialized Knowledge and Experience
To thrive on Amazon, you have to find and analyze the right metrics to understand how your eCommerce business is performing. These things take time to understand—time that you won't find if you're busy working on your business.
The solution is to tap into other people's knowledge and experience.
Amazon accountants know how the marketplace works and where to find the most relevant data for your business. They can also present it in a way that you will understand, plus you get to ask them questions too.
9. Long-Term Beneficial Partnership
Being a business owner becomes more fulfilling when you partner with excellent people. You value what they bring to the table, whether it's your employees, contractors, or consultants. That's why it breaks your heart when they leave, especially if they’ve already known your business and contributed to its growth.
This scenario can also happen to your Amazon business. After all, you still need people to do some work for you even though it's online.
Bookkeepers and accountants are key employees of your business. Thus, you'll want to hire an Amazon accounting service that you can partner with within the long run, especially if they have an intimate knowledge of your business.
Optimize Your Amazon Accounting with Unloop
The Amazon marketplace is a competitive environment. To get ahead, you need to focus on the things that help your business profit and grow.
Thus, you need a partner who understands how to crunch those eCommerce accounting numbers, and you need them to stick around for the long haul. That’s where Unloop can help. Our eCommerce speciality and long-term commitment will give you a sense of order in the chaotic world of Amazon. Talk to Unloop and take Amazon bookkeeping out of your plate and into ours. Our Amazon seller accounting service is a resource-saving decision that you won’t regret. Call us at 877-421-7270 to get started!