Online sellers and retailers may find it confusing to figure out which quality accounting software best fits their business. With so many options on the market, it's easy to make a mistake—but not with our helpful tips!
In this post, we'll go over some of the most common mistakes people make when choosing Amazon accounting software. We’ll also include the best practices to help you make the right decision for your business. By following these guidelines, you'll be sure to find the perfect software to manage your business’s finances. So what are you waiting for? Read on!
Mistakes When Picking an Amazon Accounting Software
Small business owners with no accounting background commit many mistakes in picking the tool they’ll use for their business finances. While the situation is understandable, it should not be the case. By knowing these mistakes, you can proactively avoid them and pick the best tool for your business.
Not Knowing Its Purpose
It is a common mistake of ecommerce sellers to pick any accounting software without knowing whether they need it to track expenses, check their Amazon sales, generate reports, or prepare for tax season.
Beginner Amazon FBA sellers commit this mistake as they are still learning the ropes of selling on the platform. They have many things in mind, and their plate is full of tasks that will help them increase their monthly sales. They forget that even in choosing a software, they need to have clear goals.
Choosing for Saving’s Sake
As a startup business owner, being a Scrooge is normal because of your limited budget. Sellers want to ensure they invest their money in the right things. Hence, some resort to free accounting software to save money. However, it is a wrong decision to prioritize cost over features. The cheap tools may allow you to save, but you won’t get the essentials like sales tax summaries or detailed financial reporting.
Only On-Site Accessibility
Traditional accounting means having a computer where excel sheets are saved or having an accounting software that users can access only on a single computer. This method worked before, but in today’s highly hybrid and global work setup, having accessibility on-site only won’t work.
These traditional software limit inventory tracking, financial reporting, sales tax report generation, and Amazon accounting in general because you and your team of accountants can only access data in the workplace.
Underestimating Security
In connection with having an on-site-only accessibility software is the susceptibility of your business financial data to cyber attacks and hacking. Excel sheets are a less costly Amazon accounting method, but they are more prone to corruption and aren’t readily backed up. When files are corrupted, there is a high chance that users won’t be able to recover them.
Computers are also more vulnerable to getting hacked, especially if all you have is a password to protect your files.
Restricted Database Storage
Database storage space is a software feature that is often neglected. Amazon sellers focus on the software's accounts payable and accounts receivable capabilities and its financial reporting tools instead. However, sellers need unlimited storage space for their data if they plan to scale their business. By neglecting this feature, you’ll eventually need to choose a new software and migrate your data, which is time—and money—consuming.
Accounting Software Without HR Features
Online sellers know very well what a startup business looks like. In a startup, sellers wear different hats. They need to be adept in optimizing a store for the Amazon algorithm, brainstorming for the most appealing ads, ensuring a fulfillment method is in place, customer service, and even doing the company’s finances.
Yet, when the business grows, so does the team working on the business. Not investing in accounting software with HR features will make it hard for you to track your employees' time, projects, and performance in the long run.
Uncustomizable Software Features
Templates have a lot of advantages, like giving you ready-made choices in just a few clicks. You’ll have templates for different kinds of reports, and even for generating invoices.
Despite the convenience of having templates, there are some details you may want to include in the reports to make your financial understanding more comprehensive. You may also want to customize your invoices for branding. If the software does not allow any customization, you’ll either have to be content with what you have or reinvest in a software that can be customized.
Best Practices in Choosing an Amazon Seller Accounting Software
Now that you know the common mistakes sellers make when choosing a software, you can be wary when looking at different software options. To dive in further, here are some best practices to keep in mind before selecting your software. Check these out, especially if you have little-to-no accounting experience.
Listening to Experts
The smartest move you can do before picking an accounting program is to know what your finance team has to say. If you are in your finance team, you should reflect on what assistance you need to make your company's financial management easier.
Check your inventory tracking, bank accounts, and reconciliation; ask yourself if you need to track sales, manage inventory, perform double-entry accounting, or integrate with Amazon Seller Central accounts.
Reviewing Software Features Carefully
After knowing what your company needs, review the accounting tools available. Do not just rely on what’s the most popular, as they do not always have the features that can satisfy your company's needs. As a guide, here are the most common features accounting tools have:
- Cash- and accrual-based accounting
- Invoice generation
- Integration with different payment gateways
- Project and time tracking
- Integration with different software and apps
- Inventory management
- Customer relationship management
- Report generation
- Cloud-based accounting
- Role-based access
- Mobile accessibility
Cloud-Based and Microsoft’s SQL Server or MYSQL Database
Many accounting tools already offer cloud-based accounting because ecommerce businesses need a secured space to save their confidential financial data.
On top of security is the need for enough space for your data. When your business grows, it is best to keep all data in one place, no matter how big, so monitoring financial reports will be easier. Picking a Microsoft SQL server/MYSQL database-compatible tool will be a great choice in the long run.
HR Management
Software with project and time tracking features are easy to find, but the best accounting software takes its offer to the next level and offers human resource management. Here are the features of the HRM system you should look for:
- Database of employee records
- Communication of company policies and updates within the software
- Visibility of an organization chart
- Sending of payslips
- Schedule and leave management
- Performance checks and management
- Tracking of employee expenses
- Timesheet monitoring
- Transparency in the recruitment process
Sales Tax Tracking
When you sell online, you do not just worry about Amazon Marketplace sales and ecommerce sales. What comes along with these are sales taxes and sales tax returns. With a great accounting tool, you won’t have trouble during tax season. You’ll also be sure of your company’s sales tax compliance. The best tool should give you a view of the sales tax calculation and the sales tax collected on Amazon.
Integration-Friendly
Your Amazon Seller Central account is filled with useful data you’ll want to integrate with your accounting software to get a full view of your business and finances. For instance, Amazon FBA sellers can track their inventory, sales, sales taxes, refunds, and returns on Seller Central. You can get a deeper analysis of these numbers when combined with other financial details stored in your accounting system.
Accessibility and Controlled Access
The best accounting software should be accessible to you and your finance team, wherever you are. With today’s hybrid work setup, you need to invest in software that has multiple access features, and can be accessed using a mobile phone. With these, your team can instantly track inventory, sales, and money coming in and out of your business in real time.
QuickBooks Online and Reliable Software Use by Unloop
With these must-know mistakes and best practices, you are one step closer to choosing the best Amazon accounting software for your business. Weigh your options carefully, and always remember to check reviews before making a decision. By avoiding these common pitfalls, you will be well on your way to setting up a successful ecommerce business that is streamlined and efficient. Suppose you are looking for Amazon accounting services to assist you in monitoring all the financial transactions in your store, as well as calculating sales tax, inventory management, human resource management, and more. Check out Unloop! We began as online retailers and sellers, so we know what you’re going through. We have Amazon-specific solutions you might need for your business, so contact us today. We’d love to discuss our offers and services with you!