One of a business owner's top priorities is filing taxes. Since almost every sale or purchase comes with taxes (particularly sales tax), accounting for every single one can be a headache. Fortunately, if you're an Amazon seller, the ecommerce platform has got you covered.
Here's how Amazon made selling a lot easier with the Amazon Tax Exemption Program (ATEP).
For most purchases you make, you'll notice there are additional costs included in the receipt. One of them is the sales tax, which is a percentage-based value-added tax attached to the purchase of goods and services. According to law, every sale must be taxed, which is why you must account for each item’s sales tax.
The buyer, specifically the end consumer, shoulders the sales tax. If you are a reseller purchasing the product, you'll have to charge your customer the sales tax levied by the government to pay your product's sales tax.
Since the end consumer should cover the sales tax, resellers usually have to ask for tax refunds since they have to pay it initially. However, if the seller has tax exemptions, they can forgo paying the sales tax until they sell the product.
Yes, you do. Even if your purchases are made online, every sale must still be taxed according to law. The tax rate applicable for a given order is the combined state or local rate for the location to which the order was sent or fulfilled. In some states, the tax on sales is lower than in others.
No, Amazon cannot charge sales tax; only the government is allowed to levy taxes on the sale of goods and services. However, Amazon can collect taxes for you through the Amazon Tax Exemption Program (ATEP).
While all business owners are legally obliged to pay taxes, there are some individuals or organizations whom tax exemption applies to are the following:
Individuals or organizations who are granted tax exemptions are allowed to waive taxes for purchases, therefore saving them money. On the other hand, resellers are still required to pay the sales tax, but they can ask for refunds after selling their products.
If you're a reseller on Amazon, you can get sales tax exemptions through the ATEP.
The Amazon Tax Exemption Program is Amazon's way of handling your sales taxes for you. Instead of having to pay and refund sales taxes individually, you can instead apply for tax exemptions, buy your products tax-free, and have the end consumer pay the sales tax directly to Amazon as part of the ATEP.
Amazon sellers with an Amazon business account qualify for ATEP by default. By saving your tax settings through Amazon's Tax Exemption Wizard, you automatically enroll yourself in ATEP.
If you want to enroll as a buyer, however, you'll have to go through the whole process of getting your Amazon Tax Exemption Certificate. The Tax Exemption Wizard will walk you through the process.
If for some reason, you feel like ATEP isn't for you, you can always choose to leave the program and organize your sales taxes on your own. The Amazon Tax Exemption Program is not mandatory, so you shouldn't feel pressured to leave the program if it doesn't work for you.
However, we do recommend you use ATEP since it comes with many benefits.
Collecting taxes can be tricky, not to mention crucial for every business. But with the creation of ATEP, Amazon and its business have had an easier time selling to their customers. Here are two ways Amazon sellers benefit from ATEP.
In general, Amazon resellers get their products from another business, and when they make purchases, they have to pay sales taxes initially and then collect the sales tax from customers when the sale has been made.
By having tax exempt status through ATEP, you can make tax exempt purchases for your business. This means you don't not only save money by not paying the sales tax for your purchases for resale, but you can also save time by allowing Amazon to waive your sales taxes and collect it directly from the end consumer.
You can get a lot of headaches as a reseller since part of a reseller's job is to collect sales taxes from each sale. That's why, as a seller, ATEP saves you a lot of time and money by collecting these taxes for you. Now you can worry less about your taxes and focus more on selling your product.
If your customer also has tax exempt status, Amazon's tax exemption program will also handle the process for you, lessening the burden on your accounting.
As stressed, taxes are every business owner's legal obligation. If you don't pay your taxes— or if you pay them incorrectly—you could be looking at the suspension of your business or, worse, legal implications like going to jail.
In 2020 alone, around 593 people were sent to jail for tax-related crimes, like tax fraud or tax evasion. The same goes for Amazon sellers. Even if ecommerce sellers don’t have brick-and-mortar businesses, the same tax laws apply depending on your location. So as a business owner, you should be wary of such violations since they could mean the end of your business.
Having trouble with your taxes? You're not the only one. Organizing and filing taxes can be a nightmare, especially for ecommerce businesses. If you're thinking of outsourcing help for your taxes, then it's time you give Unloop a chance.
We offer bookkeeping, accounts payable, payroll, forecasting, and tax services. Book a call, and let's work out how Unloop can help you!
Bookkeeping is almost always associated with accounting. These two concepts go hand in hand and may be hard to distinguish from each other. But they serve the same purpose, which is to support businesses and business owners in maintaining their financial cycles.
If you're an accountant, a freelancer, or a business owner, then you might already be familiar with accounting and bookkeeping. You’re likely aware that these two processes require a certain extent of knowledge and experience to be conducted properly.
In this article, we'll be discussing how accounting and bookkeeping differ from each other and the available choices for accounting and bookkeeping software. Excited to learn? Read more!
Bookkeeping and accounting are both extremely important for businesses to keep watch on their financial well-being in order to thrive and grow. For most people, these two processes might seem the same, but the truth is these two are different, with different functions and clear distinctions.
Bookkeeping is all about keeping records, recording daily transactions, and noting down all the sales and purchases the business takes part in. On the other hand, accounting is about having an overall look at the financial data of the business and interpreting that data to create sound decisions, such as acquiring business loans and expanding the business.
In simpler terms, the first step is recording all financial transactions (bookkeeping), and the next step is taking the data to view an overall picture of the business’s financial state (accounting).
Bookkeepers tend to focus on keeping things organized financially while being accurate in recording business transactions.
Meanwhile, accountants are more focused on the accounting processes of the business’s financial data and giving their understanding and analysis of the financial status of a business. They provide consultations and are tasked to give out advice regarding financial decisions in business operations.
Note that accountants can perform bookkeeping, but bookkeepers cannot be accountants unless they pass certain certifications. But these two roles still perform having one goal in mind, and that is to contribute to the business’s stable financial health in the long run.
There are a lot of bookkeeping and accounting services that can be of help to small businesses in carefully managing their financial data and recording financial transactions.
While it is truly admirable that some entrepreneurs are driven and dedicated to even figuring out how to do bookkeeping and accounting for their business, making it manageable by using the help of many existing accounting software programs and services may still be the wisest choice.
Outsourcing bookkeeping and accounting services can also improve the accuracy of their financial records and data.
Some of the bookkeeping and accounting services for small businesses include the preparation of financial statements, bookkeeping, tax accounting, and bank reconciliation. See more below.
These include income statements, cash flow statements, and the balance sheets of a business, which a lot of micro-business owners tend to overlook. However, these statements are important documents that contain financial data. These are crucial records that can forecast the future performance of the business.
Accounting professionals not only create these documents but can also assist business owners in understanding them so that they can make better decisions for their businesses.
This service is about having direct records of a business, including its day-to-day transactions, business purchases, and sales. To run a successful business, recording daily transactions is vital for the financial data to be current and accurate.
There are a lot of rules of tax reporting that businesses need to comply with, such as payroll tax, income tax, and the deadlines for the submission of these taxes. Aside from outsourcing this service, there are a variety of software that are available to help businesses save time and do the job correctly.
This pertains to the process of reconciling your bank transactions with your business's books. This accounting process helps business owners ensure that all bank-related transactions are being noted and recorded. It also aims to give a heads-up to the business owner when there is fraudulent activity.
When starting a business, it is ideal to look for affordable accounting and bookkeeping software that have easy-to-use features and can get the job done effectively. These software may vary according to their uses and features. That's why it is important for you to choose the one most suited to your business’s practices and needs.
This software is best for small businesses because it is affordable and, at the same time, effective. One of the best things about QuickBooks is the tools it gives you to do different accounting tasks such as creating professional invoices, taking payments, keeping tabs on expenses, and monitoring your cash flow.
Aside from these, what makes QuickBooks attractive is its scalability. You can adjust your plan according to the size of your business and your needs. It is recommended for small businesses that wish to expand later on.
Another great choice of accounting software for small business owners is NetSuite because of the variety of features it offers, which includes enterprise resource planning tools. Its automation aspects make it simple for businesses to collect and send invoices and also get a clear picture of how they are doing financially.
FreshBooks is one of the best choices for those who still can't afford expensive plans. Despite its affordable price, this software is an all-in-one accounting solution that can provide essential bookkeeping services for your business.
FreshBooks also boasts easy-to-use features, which benefit those who don't have a background in accounting. This is the software we recommend for freelancers and new business owners.
This simple accounting software is best for microbusinesses with its basic features and affordability, allowing businesses to grow without having to spend big on accounting software programs. Its basic features include tax services and generating financial reports.
This online bookkeeping software is best for small businesses managing sales both offline and online. It is a great choice of software for online merchants, as it generates real-time reports. Not to mention, it offers a very low price for its most basic plan.
Accounting and bookkeeping play a big role in a business's success. Every enterprise, business, or job you'll see involves accounting to accurately track and handle finances. It is inevitable, especially in the world we're living in today.If you're someone trying to learn how to manage your business’s finances, whether you're a freelancer or a new business owner, then you're on the right path. However, learning this won’t be easy. Instead, partner with Unloop and get assistance from accounting professionals to unleash your full potential. Learn from our experts, and watch your business thrive. Don't hesitate to book a call with us today!
More than half of business owners find bookkeeping and accounting tedious. This is according to a survey result published by Entrepreneur. In addition, finance management is often introduced late in a startup's internal systems.
But the tediousness of crunching numbers is only half the picture. There are other reasons why small business owners push bookkeeping and accounting out of their usual routine.
Let Unloop help you explore some of these reasons and their effects on your small business. Plus, we'll also introduce a practical solution you can use to help you transfer accounting and bookkeeping tasks to better hands.
While some small business owners feel the drain of doing accounting and bookkeeping, others have different reasons. Any small business owner not doing formal bookkeeping may have several of the following reasons.
Startup business owners a few months into their venture think they don't need bookkeeping. That's understandable. Their business has little to no revenue, so there's nothing to count. Besides, a small business can survive without proper bookkeeping.
This way of thinking can be common with new businesses where the owners are more focused on other business endeavors to generate revenue as soon as possible.
Bookkeeping and accounting can be technical. Behind every number jotted down on a journal or a ledger has to lie sound accounting logic. Unfortunately, that can take years of study, which business owners often don't have time to do.
Additionally, many people have no prior knowledge of bookkeeping and accounting principles to carry it out. As a result, they sweep the task under the rug and vow to have it done sometime in the distant future.
Some business owners develop their own way of accounting for their business's numbers. It can be as simple as writing the transactions down in a notebook or creating a spreadsheet file. If this goes on for some time, they can get comfortable with how they do things because it's the only way they know how to do them. Additionally, these numbers may make sense to them (and only them).
A lot of sellers are intimidated to hire professional accounting services for their small business. The whole idea seems out of reach and expensive. In addition, many perceive the fee to not be proportional to the professional services their small business needs.
Some small business owners don't like bookkeeping and accounting. The thought of running through each line in a bank statement and a bookkeeping journal is a burden to some. They'd rather be out there doing the work.
It's perfectly okay for you to feel this way. But then, sooner or later, when you’ve grown your business enough, the accounting facet of your business will tap you on the shoulder. By that time, you’ll have to scramble to do it yourself or hire an accounting professional to catch up on your bookkeeping.
Ideally, a bookkeeping and accounting system must be in place from the beginning of the business. That's because when a small business grows, it can be difficult to catch up on bookkeeping and accounting if these are introduced late.
Below are some things that can happen when small business owners don't handle their finances well.
They will be unable to plan for growth: Lack of numbers means a lack of objective financial data to make business decisions.
They will miss payments - The absence of proper bookkeeping and accounting will make it difficult to record and track short-term liabilities, which can result in missed payment due dates.
Causes inaccurate payroll - Without formal bookkeeping, employees' salaries may not be accurately recorded, resulting in a wrong payroll amount and low employee morale.
They will not comply with taxes - It's challenging to determine the exact sales and income tax amount without a standard bookkeeping method, as this helps generate the necessary financial statements needed for tax returns.
Getting online accounting services is a practical way of introducing bookkeeping and accounting to your business without paying a fortune.
An accounting service provider can offer the following small business solutions.
Most accounting and bookkeeping professionals are experts in the use of QuickBooks Online—the most popular accounting software for small businesses. With this software, they can accurately record your monthly expenses and produce monthly financial statements.
A dedicated team of bookkeepers will work with you to ensure each transaction is recorded accurately for financial reporting.
As a result of accurate bookkeeping, financial reports can be submitted and used as a forecasting tool. Accounting professionals can use different reports to project your potential income, expenses, and business performance in the months ahead based on the data generated by QuickBooks Online.
This service helps you plan how to grow your small business in the next few months or even years!
You incur short-term debt whenever you purchase a product or service on credit. This is called accounts payable, governed by invoices and receipts issued to you by the vendor.
Accounts payable have terms and payment due dates that need to be met. So it can be hard to track when something is due if an accounting and bookkeeping system isn't in place.
Accounting and bookkeeping pros can manage accounts payable to ensure your bills and credit purchases are paid on time.
Giving your employees incorrect salary amounts can affect their morale. But if there are accounting experts who are checking the accuracy of each timesheet, small business owners and their employees are assured of correct salary payouts.
Payroll services are part of an accounting professional's skill sets and are offered by an accounting service provider such as Unloop.
As soon as a small business makes a sale, it must pay sales tax. Additionally, once it's earning decent profit, it will have to pay income tax. Because of this, business owners will need to work with bookkeepers and accountants for tax planning.
Online bookkeeping services such as Unloop can collaborate with business owners for tax planning. For example, if you're an ecommerce business with a store on Amazon, we can help you set up sales tax collection and identify the correct tax amount to remit.
Additionally, we can help you prepare your taxes. We can generate the needed financial statements for income tax filing. Don't have an accountant? Not a problem. We can assist you in filing taxes and forward the necessary financial documents to our network of accountants to ensure that you stay compliant every tax season.
It is understandable for small business owners to focus on other things. In fact, it makes sense for them to go heavy on profit-generating tasks. Apart from not the reasons mentioned above, they also don’t know what accounting services do small businesses need in the first place.Accounting always takes a backseat in the early stages. Luckily, it doesn't have to stay that way. With accounting and bookkeeping companies like Unloop, small business owners can take the necessary and early steps toward setting up an accounting system at a fair price. So book call with us, or check out our ecommerce services now.
Canadian and Amazon sellers like you always have room for growth, from selling in your own country to offering your goods and services in the neighboring one. Growth is, thankfully, an inevitable thing.
However, for success to come, online sellers need to work hard. The first step is to answer the most pressing questions sellers ask about Amazon sales taxes, especially when it concerns separate countries.
Let us help you in answering your questions on sales tax obligations, sales tax compliance, and everything in between. May these answers make Amazon sales tax for sellers like you easier to understand.
Although your operations are fully online, Amazon sellers still have tax obligations and laws to abide by. On Amazon, you need to be particularly familiar with the Amazon Marketplace Facilitator Law (MPF) regarding marketplace sales taxes.
The MPF used to be applied in American states only. However, Canadian provinces are now covered by the regulations too. Nevertheless, some states and provinces are not included in the legislation’s territory, so always check the details.
This law identifies Amazon as a marketplace facilitator of third-party sellers. Through it, Amazon is obliged to compute, collect, remit, and refund sales taxes on behalf of third-party sellers.
Amazon always charges sales tax if the item sold is taxable and unless the buyer is tax-exempt. However, although Amazon charges sales taxes, they are not always required to collect, remit, and refund sales taxes. There are states, provinces, and towns that are not under the MPF Law. In these cases, sellers will be the ones to process sales tax collection, filing, and refunds.
Sales tax rules already vary per state and local government, and it even gets more complicated because there are different requirements for MPF per locale too. As a seller, you must know when sales tax on Amazon will be handled for you and when you’ll be responsible for it.
As an Amazon seller, you must know whether Amazon will collect sales tax on behalf of your store or if you need to collect sales tax yourself. It is best to review Marketplace Facilitator laws on a general level, and how they apply to the states and provinces you deliver to.
In Canada, the general rule is you must apply sales tax reflecting the package's destination. Meanwhile, it is more complicated in America, where states have separate rules on which sales tax rates to follow. Some states apply the rate using the package’s destination, while others use the sales tax rate of the package’s source. There are also states in the US that do not charge sales tax.
The sales tax rate Amazon follows is the one that the Canadian and American states and provinces have established. They also collect and remit the same amount prescribed by the country's laws.
For American sales tax, you’ll need to know whether to use the origin or destination rate. Arizona, Illinois, Mississippi, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Texas, Utah, and Virginia base their sales tax on a package’s origin, while the rest base the amount they charge on the destination. California bases either on destination or origin, depending on local laws.
Here are the details of sales tax rates in America:
|State||State Tax Rate||Average Local Tax||Total Tax Rate|
Meanwhile, Amazon applies sales tax on the specific type of tax in Canada as the country has three tax types: General Sales Tax (GST), Provincial Sales Tax (PST), and Harmonized Sales Tax (HST). Quebec Sales Tax (QST) is a rate specifically charged for this province, while Retail Sales Tax (RST) is specifically applied in Manitoba.
Here are the rates for all sales taxes, so if Amazon does not cover the other sales tax applied in a province, you’ll know. Note that it is your duty as an Amazon seller to charge, collect, remit, and refund them.
See below for details:
|Province||What Amazon Collects, Remits, and Refunds||PST||GST||HST (Combined Tax Rate of GST and PST)||RST|
|British Columbia||PST only||7%||5%|
|Newfoundland and Labrador||HST||15%|
|Prince Edward Island||HST||15%|
ATEP is the platform’s way of exempting individuals and groups from paying sales tax. For your customers to enjoy this benefit, they must submit complete tax information and documents on the Amazon platform.
In America, certain goods are tax exempted, like groceries, prescription and non-prescription drugs, intangibles, and feminine hygiene products. There are also certain tax-exempted goods in Canada, so make sure to check.
There are also groups and individuals in each country that are tax-exempt, like government workers, members of indigenous groups, and companies and individuals who buy products as manufacturers instead of end users.
There will be transactions where you’ll be the one to compute, charge, collect, remit, and refund sales tax, so investing in tax software will be handy. Some of the best tools you can try are Taxomate, Avalara, Taxify, HelloTax, and Taxjar. These tools are always updated with the latest sales tax rates, especially since sales taxes are always subject to change.
However, note that when you invest in software, you also need to allot time to learn how to use it. Some tools offer free training to get you started.
As you can see, sales taxes are complicated as sales tax rates vary per location. It would greatly help to have experts assisting you.
Experts can also help you utilize the tax document library Amazon provides. Although MPF handles the work for you, it is still good to see sales tax data and get a combined sales tax report.
You can make the most of your Amazon Seller Central account data through a partnership with an agency. Through professional expertise and the help of different accounting, bookkeeping, and taxation tools, an agency will turn data into easy-to-understand reports to help you in making decisions for your business.
Even if you’re just starting out on Amazon, it’s important to get a grip on the obligations you need to pay. We hope this article has enlightened you on the topic of Amazon sales tax.And if you need any assistance, our team of experts at Unloop is always here to help. Do you have any other pressing questions about Amazon sales tax, or do you need assistance in handling your company's sales tax? Contact us today to learn more about our services!
If you have accounting knowledge, then you might as well put it to good use. Ecommerce is on the rise, and as more and more online businesses are starting to sell online, business owners also need help handling their finances. Unfortunately, ecommerce accounting is messy, and many business owners outsource it to skilled experts.
If you want to expand your skills and be an accountant for ecommerce companies, here are the roles, responsibilities, and skills an effective ecommerce accounting expert should have.
Understanding financial data is essential to figuring out how well a company is doing. A large revenue is not the only factor that shows that a business is booming. It is an accountant's task to organize finances and generate reports to oversee the health of businesses.
Here are some of the important duties of an ecommerce accountant.
The primary role of an accountant is keeping track of all the financial statements and preparing them for net profit or loss at the end of a specified accounting period. Companies do audits quarterly or annually, and accountants prepare reports to summarize how the money circulates in the business.
Don't confuse the books of accounts with the books involving bookkeeping tasks. The books of accounts are not just the records of sales and expenses of a business. It also contains the general ledger, debtor and creditor ledger, cash flow statements, balance sheets, and bank reconciliation statements.
Making internal audits are crucial to every business. Accountants make sure business transactions recorded, declared, and summarized in all books are valid and in compliance with government laws. If there are inconsistencies, the accountant has to pinpoint the issues and fix them.
Small businesses rarely get audited, but tax collection agencies are keen on looking into big enterprises. When this happens, accountants can answer for the company.
Preparing a business for what might happen in the future is also one of the expected tasks of accountants. Business forecasting helps a business owner create a strategy for their business. There are different ways an accountant can do forecasting, but commonly, experienced ecommerce accountants use historical data and past trends to predict the future of a business.
However, there are outside variables that can have an impact on the projection. Nonetheless, accountants can present different strategies for different situations.
Ecommerce entrepreneurs despise taxes. It's tedious and time-consuming work. Ecommerce tax accountants are in charge of handling the tax liabilities of the business. An ecommerce business owner's primary concern is sales tax, especially when they own a product-based entity.
Accountants make sure that businesses collect the proper sales tax and file them. Accountants can also deal with tax deductions and exemptions. Accounting experts ensure that a business’s tax obligations are met properly.
Other accountants can assume the role of payroll manager. Since payroll also involves tax deductions and computations, someone with strong mathematical skills has an advantage in handling payroll. Moreover, some managerial duties may also fit an accountant’s role since you should have a strong sense of organizing and managing things.
To be a trustworthy accountant, you must possess a number of skills. Of course, ecommerce businesses want their finances to be in good hands, so they may be looking for a particular skill set when hiring an accountant. Here are some important skills ecommerce clients look for in their accountants.
Accounting is a busy job. You have to prepare financial reports and documents and file for taxes. You can’t afford to be behind schedule because delays can negatively affect a business. Finances run businesses, and without the reports, the business will have to use guesswork instead of proper strategies.
In addition, tax filing has deadlines too. Missing the deadline will mean penalties, and employers do not want these unnecessary expenses. So being timely is essential to an accountant.
In ecommerce businesses, the financial department is prone to errors and issues. As an accountant, you should always be ready when facing such issues. Additionally, you want to always have a strategy in place in case something bad happens in the future.
Aside from providing solutions, decision-making is also crucial. You have to make unbiased decisions as much as possible. The plans that you lay out for the business impact it greatly. Your decisions and solutions can strengthen or start the fall of a company.
Accounting professionals deal and collaborate with different departments within a business. You will meet different types of people to manage conflicts and generate reports. You'll constantly communicate with the business owner, stakeholders, and potential investors. You should be able to convey messages clearly and make them understand how the accounting data impacts the business.
The development of technology makes accounting easier for businesses. Accountants should be updated with the technological developments in accounting. There are several accounting software available that can make the job easier and less prone to errors. Establishing an accounting system for a company should be a primary goal of an accountant.
Accounting software can help with ecommerce bookkeeping, inventory management, securing financial records, calculating gross margins, preparing documents for tax returns, and many more tasks.
There are some cases where small business owners are looking for accountants that can do more than traditional accounting methods. For example, certified public accountants (CPAs) are the most common types of accountants that government entities and companies look for. They mostly handle financials involving business taxes.
However, other businesses may require other types of accountants. For example, management accountants identify and interpret accounting data and relay it to different departments so they can strategize and make plans for the business.
Business owners put their trust in ecommerce accounting experts to handle their finances. That's why being an accountant plays a big role in the success of a business. Although becoming an ecommerce accountant entails many more responsibilities, these are just some of the important duties you will attend to when you decide to become one.
But if you want to focus on developing your area of expertise on business taxes, Unloop offers a partnership for accountants. Become our partner, and we'll gladly do the bookkeeping for your clients while you continue to focus on handling their taxes. So book a call with us today and learn more about this collaboration offer.
Amazon provides a stepping stone for business owners to chase success. However, before getting to the top, there's a steep learning curve, and for new Amazon sellers, it can be overwhelming. Crucial mistakes can be the downfall of a business, but these mistakes could be avoided.
In this blog post, we'll list down some of the most common mistakes that Amazon sellers commit and give you some tips on how to avoid them to jumpstart your Amazon business.
When starting a new business, there is room for errors, but you can't afford to do the same wrong things again and again. So here are some common mistakes you should keep in mind.
Many small business owners try to save costs in their operations. Spreadsheets are tempting to use over accounting software because they are free, but in the long run, manual accounting has more cons than pros.
Spreadsheets will involve you manually inputting and updating data. It's also prone to data breaches because it has little to no security system. Furthermore, manual accounting makes you more prone to errors. The time-consuming work you spend on accounting and fixing your errors could be allocated to more pressing parts of your business if you opt to use accounting software instead.
If you are selling multiple products, you should know that some of your products may be in demand during certain seasons. Unfortunately, new sellers forget to take advantage of the knowledge to increase their sales. An inventory management system will tell you which products give you the most profit and when.
So, when customers scramble online to buy your products, they won't find them out of stock. Many sellers miss the opportunity to increase their sales by not keeping track of their inventory. A profitable Amazon business knows when to stock its products and put them up for sale to maximize its cash flow.
Sales tax compliance is a must if you have a product-based business. One common mistake of new sellers is errors in sales tax calculations. Keep in mind that sales tax varies depending on which state you sell your products in. Your job as the merchant is to gather these taxes and send them to the appropriate tax collection agency.
Wrong sales tax can be a bad hit for your business. This will incur penalties, which might be detrimental, particularly for small operations.
Keep in mind that you cannot control what you cannot see. Therefore, ecommerce bookkeeping is essential to determine if you have a healthy cash flow. It helps you identify where your resources are going and if your business is making a profit.
Not to mention organized and clean books will help your business. You can use it for bank loans, IRS audits, and as pitches for business sponsors and partners.
When you buy items for your inventory, what money do you use? Do you use your business card or personal credit card? When you run a small business on your own, you may think combining your personal savings account with your business accounts is hassle-free.
But in the long run, it will cause more headaches. When you need to make financial reports, how will you differentiate your business transactions from your personal ones? How can you tell if your cash flow is balanced and healthy? Start your business on the right foot by opening a committed bank account for your business.
Now that you know what areas you’re getting wrong, you can take precautions when facing them. Here are some recommended practices to assist you in managing your company's accounting.
Quality accounting software will make managing your finances convenient. First, it makes your accounting processes automated. You can ensure that all your financial transactions are recorded and always updated.
Additionally, cloud-based accounting software is simple to use, even for those without a background in accounting. This online accounting solution is easily accessible, highly secure, and cost-effective. As a result, you'll spend less time doing more accurate accounting.
But aside from recording your business transactions and creating business reports, accounting software has add-ons to help you with other areas of your finances. For example, some accounting software for Amazon sellers has built-in sales invoicing. This feature allows you to send invoices to your clients seamlessly and even receive their payments directly through the software.
Look for the right accounting software to provide solutions for your business needs. It can range from inventory tracking, payroll, online bookkeeping, track sales tax, to even cash flow analysis. There are also accounting software that sync to the Amazon Seller Central account automatically.
Profit and loss reporting will be hard if you can't recognize your personal funds. Set up a bank account that's purely for business purposes to make bank reconciliation more convenient. Then, when you compare your bank statements to financial reports, you won’t mix and confuse them with your personal expenses.
Paying taxes is inevitable even for ecommerce businesses, and you must get your tax obligations right. There's always ample time to prepare before tax season. Make sure to know all the tax compliance regulations you should follow. In addition, you should know the tax rates, filing, and payment deadlines.
Also, be aware of Amazon marketplace’s sales regulations. Certain charges apply internally. For example, if you're tracking sales tax data on Amazon, you will notice that they charge higher than what the law states. Because they automatically collect the sales tax for sellers and calculate them, you can ensure you send the proper amount to tax collection agencies.
An additional fee is charged for this service.
Starting an Amazon business is easy, but learning to be a profitable Amazon seller has a steep learning curve. You need to handle your marketing strategy, advertising, and products, and on top of that, you are also responsible for your accounting needs. With a lot on your plate, it can be overwhelming, and mistakes can be easily overlooked—especially those involving accounting.
We hope this article helps you prevent these novice mistakes and helps you manage your finances better. However, it is also helpful to seek the help of professionals. Unloop offers Amazon seller accounting to help keep your business above the water in this cutthroat business environment.
We have experts that will ensure you get your number right—from taxes and expenses to sales. Book a call with us now and learn more about our services.
If you're an Amazon seller, you know how important it is to keep track of your expenses and profits. But doing all that bookkeeping can be a hassle—that's where accounting software comes in.
Accounting software makes tracking finances easier and helps you find ways to increase your store's profitability. In this blog post, we'll look at some factors that affect your profit and how accounting software for Amazon sellers can help you reduce your costs.
Any business owner, especially those owning a small business, will tell you that profitability is crucial. After all, if a business isn't making money, it will not be around for very long. But there's more to profitability than simply staying in business.
Profitability is a crucial metric for assessing a business's health. It demonstrates whether your Amazon business is expanding, stagnant, or declining. Your profit also provides insights into your Amazon business's competitive position.
Perhaps you're fully aware that operating expenses are a normal part of running a business. These include the cost of inventory, shipping, Amazon fees, and other operational costs. Most businesses also engage in marketing and advertising to reach potential customers.
But what happens when an expense starts to eat into your profits? This is a serious problem that can jeopardize the future of your small business. Unfortunately, accounting mistakes can also greatly impact your Amazon business. Even a small error can cause you to overpay or underpay your taxes, which can exhaust your profits.
Do you want to ensure that your business remains profitable? Then you have to get your expenses under control. If you're doing your own accounting for Amazon, you have to be careful, as simple errors can cost you your hard-earned money.
Here are some factors that can affect your profit in your Amazon business.
You might think that you can save money by skipping out on hiring an Amazon accountant. After all, they can be pricey, and you have a limited budget. But you might not realize that an inaccurate Value Added Tax (VAT) return can cost you money.
As an Amazon business owner, it's important to be aware of the potential effects of incorrect VAT on your business. On the sale of goods and services, there is an indirect tax known as VAT. Inaccurate VAT can result in increased costs as well as fines and penalties.
Like many small business owners, you probably do your own Amazon bookkeeping. And as an Amazon seller, chances are you're also using their purchase invoicing system. However, a few common errors can occur with this system that can cause problems down the road.
The most usual mistake is when a product's price is listed incorrectly. This can happen if you accidentally list the wrong price or change the product price after the invoice has been generated. Such mistakes can easily result in the profit and loss statement doubling the cost.
In every state where they have a physical presence, Amazon FBA sellers are required to remit sales tax. This includes having inventory in a fulfillment center and having employees or contractors in the state.
Sales tax regulations differ from every state and can change anytime. If you're an Amazon FBA seller, you must be aware of the potential consequences of errors in your sales tax. Penalties and interest may apply if the proper amount of sales tax is not collected and remitted.
Accounting for product returns can be tricky. First, you must decide when to write off the inventory and ensure that it isn't expensed more than once. Returns can complicate your inventory if you don't have an Amazon bookkeeper and are doing your own accounting for FBA sellers.
Customers typically expect to receive a refund when they return a product. However, if you don't have the return accounted for in your books, that refund will come out of your pocket. Additionally, if you don't track returns properly, it can impact your inventory levels and throw off your other financial reports.
Many ecommerce sellers view accounting and bookkeeping as a luxury—something that can be put off until the business is more established. However, failing to track your finances properly can cost you money.
Even a small error in accounting and bookkeeping can lead to you paying too much in taxes or missing out on deductions. In addition, it can be difficult to make important business decisions if you don't have a good handle on your cash flow.
Here are some reasons why accounting software for Amazon can help you avoid costly mistakes.
Cash flow is the lifeblood of your business. To succeed, you need to have a system to track your income and expenses. Accounting software for Amazon can help you do just that.
The software can give you an up-to-date picture of your finances by automatically importing your data from Amazon. This information can improve your cash flow by reducing unnecessary costs and increasing revenue.
Many Amazon sellers know the importance of accounting and bookkeeping, but they don't realize that tools are available to make the process easier. For example, accounting software can automate repetitive tasks such as invoicing, tracking expenses, and inventory management.
While you can certainly do these tasks on your own, accounting software will save you significant time and money. An automated accounting system for Amazon helps reduce errors and ensure that your financial records are accurate, preventing unnecessary penalties or other fees on your end.
Amazon accounting software not only tracks your sales and Amazon fees but also helps you identify your worst-selling products. This valuable information can help you change your inventory and pricing to improve your Amazon sales.
By understanding which products are selling poorly, you can make adjustments to your listing to make it more appealing to potential buyers. You can also use this information to negotiate better terms with suppliers or eliminate products that are costing you money without providing benefits.
Inventory represents a significant investment of capital, but it also needs to be managed carefully to ensure that it remains in good condition. To manage inventory effectively, it is best to use a software program to track inventory levels and automatically update the records when items are sold or expensed. This will prevent situations where inventory is mistakenly expensed twice, which can lead to significant losses.
Many factors can eat into your profits, and it's important to be aware of them so you can take steps to mitigate their impact. But managing everything as a small business owner can be daunting.
With accounting software or an accountant, you can increase your store's profitability by having better visibility into your expenses and profits. At Unloop, we can help you manage your business taxes and finances better by providing accounting and bookkeeping services. Get started by booking a call with us today!
Disclaimer: Please note that 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.
It's hard to imagine accounting without technology today. This is especially true for ecommerce companies because they manage tons of financial records from global sources. If you're a business owner, can you commit to frequent physical meetups and tons of paper files? Probably not, and you don't have to! You can now conduct these transactions online.
With the help of online accounting services, you only have to use your PC and mobile device to manage accounting documents. Furthermore, you can communicate effectively with team members and professionals without meeting in person! But as good as it may seem, technology can be downright overwhelming.
There are terminologies and systems that you may find difficult to understand, preventing you from making the most of its benefits. You don't want that, so let's figure out how to break these technological barriers and take advantage of online bookkeeping and accounting!
Accounting, like any other field, can be challenging. You must be good with numbers to assess, manage, and properly communicate financial matters. Otherwise, it only increases the risk of various business problems.
But thanks to technology, you can find solutions to make accounting jobs easier. The birth of bookkeeping and accounting tools, for instance, boosts the ability and productivity of a financial team to accomplish various tasks. Whether it’s data entry or forecasting, bookkeepers and accountants can better secure and manage their data using these tools.
Here's a quick list of how technology transformed the accounting and bookkeeping industry:
Meanwhile, here are the latest technological trends in accounting you might want to keep a close eye on:
Now you understand the significant role of technology in accounting. If you're planning to acquire accounting services online or find an online bookkeeping service, here's how you can make the most of them by breaking technological barriers.
First, set your expectations right. While technology offers superior benefits, that doesn't mean it's perfect. It can do many things, but not necessarily everything. So before using one, find out its strengths and weaknesses. What can it help you with, and what are its limitations?
If you want to use QuickBooks Online, for instance, determine its pros and cons. When is it most useful? Where does it fall short? You need to understand these things to utilize accounting technology best.
If you have difficulty deciding which accounting software to use, get some ideas from the most popular tools. What do they have in common, and are they beneficial for your business accounting needs? Sometimes, even the tool recommended by the most advanced bookkeeping services won't work simply because your business needs differ.
Examples of the key characteristics of good accounting software include user-friendliness, integration, data security, and automation features. Feel free to add more qualities to your list as you learn more about them.
Now that you know what good accounting technology is, let's focus on your business needs this time. What tasks will require the assistance of a tool? What software features does your online accounting team need to accomplish tasks? Enumerate these and see if they align with the features of your prospect tool.
Perhaps you need a feature for tax filing services, monthly financial statements, HR and payroll services, average monthly expenses, cash flow statements, or monthly bookkeeping services. Check if there is a feature for a specific task and how much assistance it can provide.
The good thing about technology is that there are more ways to communicate. Instead of meeting in a physical place, you can just send a message to your chief financial officer via e-mail or chat. But, at the same time, it also puts a barrier and can easily cause misunderstandings. To avoid this, learn how to use messaging tools properly.
Check whether the accounting tool offers a messaging feature. If not, your online bookkeeping service or online accounting team will help you set up a convenient communicating platform. This way, you can leverage technology while keeping your communication in check, especially when it involves detailed financial reporting.
Acquiring the most expensive accounting tool doesn't guarantee its usefulness. If you're a small business, it's especially important to be mindful of your budget when selecting accounting technology. Check if you'll have to pay a daily or monthly fee to use a particular tool, and if so, how it will affect your overall budget.
Look for an affordable online bookkeeping service that includes reliable tools in their packages. It seems too good to be true, but there are cost-effective technologies that provide not only basic bookkeeping services but also some advanced accounting features. This shows that pricing isn't everything in determining the efficiency of technology!
Technology is ever-changing. You never know when a new accounting tool or system will be released. In that case, keep a closer look at the latest trends. This will help you avoid falling behind competitors and get immediate access to new and exciting innovations.
That said, the newest trend isn't always right for your business. Sometimes, it may appear pricey or irrelevant to your accounting and bookkeeping needs. For this reason, it's critical to analyze it first and avoid getting caught up in the excitement. Always consider how it can help you with your accounting tasks.
It's tough for one person to handle accounting tasks, bookkeeping data management, and trend analysis all at once. Sure, you can assign them to some of your employees—but what if they don't possess enough skills? Do not risk your company finances; work with a dedicated team of accountants or bookkeepers instead.
Many small business owners benefit from an outsourced accounting and bookkeeping service. Whether it's a dedicated accountant, dedicated finance expert, or professional service firms, the important thing is that your finances are in good hands. They'll handle most tasks in your stead, from providing financial reports and tax advice to tax filing services.
Many businesses use accounting technology, but few make the most of it. Some might not even understand a tool's significance or lack the knowledge to use it. As a result, it only ends up as another unnecessary expense in the company's arsenal.
Don't end up in the same situation and break technological barriers with outsourced accounting and online bookkeeping services! You can rely on their expertise and ensure that technology makes your financial management faster, easier, and more efficient.
If you're seeking the best online bookkeeping and accounting services, why not consider Unloop while you're here? We are an affordable bookkeeping service slash online accounting services for a small business. We specialize and serve inventory and ecommerce companies in the US and Canada.
Here's a preview of some tools we use and include in our virtual bookkeeping services packages.
We consider these two as the parents of accounting software; there isn't a single listicle that doesn't recommend them! If you decide to work with us, you can select between creating a Xero or QuickBooks online account. Otherwise, we won't take on clients with their own accounting software (and plan to continue with it.)
We also partner with Taxjar to help monitor your sales tax. It's a cloud computing platform that automates sales tax compliance. To be clear, Unloop won't file your taxes. We only do full-cycle bookkeeping, accounting, forecasting, AP, and payroll services. However, we can partner with CPA accounting firms and refer you to their tax services if necessary.
Book a call with us today!
"Accounting software," "bookkeeping," "tax preparation," and "filing"— just mentioning these terms will make your brain bleed. For any business owner whose forte leans more on selling for profit than doing the crunch work, these terms connote some heavy financial and technical work.
As business professionals, we know it's more fun to see money flood in than it is to count it. But the reality is we all have to start accounting because we all have to pay taxes eventually.
Sole proprietors with profitable ecommerce businesses are burdened the most by income tax preparation. That's because they do it all themselves. So if you're one of them, let Unloop give tips on using your QuickBooks software to file income tax returns correctly.
1. Click the gear icon at the top right part of your QuickBooks business tax software.
2. A pop-up rectangular box menu will show up. Click the Account and Settings under the Your Company section.
3. In the Company Type section, go to the Tax form drop-down box and select your business structure. In this case, since you're the only small business owner of an ecommerce business, you have to choose Schedule C (Form 1040).
A lot of QuickBooks tax return software users miss setting up their forms. They either overlook it or don't see its importance in the accounting aspect of business. But this simple move will make all the difference in the headaches you'll have come tax time.
Here are the benefits of setting up forms as soon as possible.
Transactions are directed to the correct tax form line items. This will help QuickBooks display the sum of all accumulated amounts on the selected tax form within the accounting software.
You don't have to make any guesswork once your form is set up. Things like determining where the transaction is supposed to be placed in what line item on the form will be a breeze.
Setting up a tax form and categorizing your transactions leave an audit trail. This makes the auditor's job easier. They can cross-reference your financial statements with the tax form line items and sign them off easily.
Making sure your tax form is filed correctly means classifying your transactions accordingly. To do that, you'll need familiarity with how each account and detail type in QuickBooks is linked on your Schedule C form. Below are the line items of each account in the QuickBooks tax preparation software and their designated detail type.
Note that these are only regular transactions by any business owner. If you wish to get comprehensive information about the list of accounts, you may consult an accounting professional adept with QuickBooks online.
|Account Type||Detail Type||Schedule C Line Item|
|Income||Sale of product||Line 1|
|Income||Refunds and discounts||Line 2|
|Other income||Miscellaneous||Line 6|
|Expenses||Fees and commissions||Line 10|
|Expenses||Office / Admin||Line 18|
|Expenses||Repair and maintenance||Line 21|
|Expenses||Taxes paid||Line 23|
|Expenses||Employee payroll tax||Line 23|
Discussing tax filing using accounting software is a complicated topic, even for the best small business owners. But just like any diligent businessperson, we have to know about certain things in using accounting software for our business taxes. That way we at least get a sense on how it works.
So here are the common questions business people ask about QuickBooks Online's account categorization and taxes.
Of course! Setting up your tax form is the only way QuickBooks can help you with future taxation. In addition, your QuickBooks online accounting software will only recognize your business structure through the type of form you choose.
In your case, as a sole business owner, selecting form 1040 lets QuickBooks know what type of business structure you have and help facilitate tax line mapping for you.
Yes and no. This may seem difficult, especially if tax line mapping is involved. But once you've categorized all the transactions accordingly, QuickBooks will do its part.
The tax software will streamline everything for you to fill out your forms with the right amount and calculate the correct income tax.
No, you can't. The account type and detail type on QuickBooks are fixed according to specialists. Unfortunately, that means you can't add your own category of account or detail type, and you'll have to work with what's already there.
QuickBooks software makes it so because allowing a user to change or edit an account or detail type would mess up how financial statements are presented. Not only that, but it may also disrupt other reports you generate on the software.
The accounts that will contribute to your Schedule C are mapped above. You may use them to categorize your transactions.
You may consult an accountant for other transactions of a different nature, which may not fit any of the detail types above.
It's essential to bring in an accounting professional to classify your transaction so that you'll have all items properly categorized come tax time. In effect, it should show up perfectly on your Schedule C form.
This concern is common to any seasoned small business owner. They may be using a spreadsheet or different software to do their accounting and bookkeeping and have a well-established chart of accounts.
Yes, they can import their account types and details. Here's how you do it:
Definitely! By hiring an accounting team that can handle your tax complexities.
Unloop comprises accounting and bookkeeping professionals who know how to map your transactions for hassle-free tax filing. Here are some broad strokes of what they can do.
Ecommerce Accounting Specialists
The team behind Unloop has years of experience catering to the accounting and taxation needs of ecommerce business owners. In addition, we handle individual sellers from different marketplaces, such as Amazon and Shopify.
Adept with QuickBooks and Xero
This team of accounting pros uses two of the most widely-used accounting software: QuickBooks and Xero. We can track down a problem within the software and fix it such as setting your business's tax form.
If you're not on this accounting software yet, we can also help you migrate for a better accounting and bookkeeping experience.
Partnered with Certified Public Accountants (CPA)
We can go full circle on your taxes. Apart from recording transactions accurately, we can also prepare the financial statements needed come tax filing season.
CPAs also back our team of accounting and bookkeeping professionals. That means Unloop can tap this network of licensed accountants if you want tax filing done.
As an ecommerce business owner, your thoughts should be about how to generate more revenue. Ideas that involve how to maximize profit, increase sales, and expand your business should be your day-to-day work. But learning accounting software, classifying transactions, selecting the correct tax forms, and filing income tax correctly can get in your way.
While it's good to know about accounting software and income taxes, it's more practical to have professionals handle it. It's faster, more accurate, and you’re sure to be compliant.Talk to us so we can get started on making your QuickBooks software work to your advantage. Dial 877-421-7270 for a consultation, or check out our ecommerce services now.
Many small business owners want to hire a full-time bookkeeper but don't have the budget to get in-house experts. So they often do their own bookkeeping or outsource it to a part-time bookkeeper. But what online bookkeeping and accounting services should you expect?
In this blog post, we'll take a look at why outsourcing your bookkeeping can be a great option for small businesses and discuss some of the benefits of doing so. So read on to learn more about outsourced bookkeeping services and see if they might be the right fit for your small business!
The advantages of outsourcing bookkeeping services are becoming more widely understood by small business owners today. Once reserved for big businesses, mid-market, and enterprise companies, these advantages are now being enjoyed by smaller businesses as well. What benefits can day-to-day operations with an outsourced bookkeeping service provide?
The number one reason many small businesses avoid bookkeeping service providers is the lack of means to pay them. However, your business can save more than 40% with virtual bookkeeping services. Plus, you can avoid the overhead costs associated with maintaining an in-house accounting or bookkeeping department.
These are just some costs of hiring an in-house professional:
On top of that, you need to consider the office space and equipment your in-house dedicated bookkeeper would probably need.
As an online business owner, you know that every minute counts. And because an outsourced bookkeeping solution is available 24/7, there's no downtime in handling your business finances or inconvenient trips to and from the office. Any task can be handled quickly and efficiently, from setting up your books to preparing for tax season.
Centralized bookkeeping is a godsend for ecommerce businesses. Imagine having all your bookkeeping and accounting tasks performed by a professional, highly skilled accounting firm with cloud-based accounting software that can store an immense amount of financial data. That is the power of outsourcing. You can be confident that your books will be accurately kept and that any compliance issues will be dealt with quickly and efficiently.
The advantages of online bookkeeping services are obvious: You get access to experts at a fraction of the cost of hiring in-house accountants, and you free up your staff to focus on other administrative tasks. But one of the most often overlooked benefits of outsourcing is increased internal control.
With a team of financial experts managing your transaction processing and reports, you're far more likely to spot anomalies. And while fraud can never be ruled out 100%, a virtual bookkeeper will have less access over your books to commit fraud.
Depending on the size and complexity of your online business, you may need to outsource some or all of your bookkeeping tasks. Fortunately, the best outsourcing company can offer flexible accounting and bookkeeping. But what services should they be offering for you to make the most out of their offerings?
Managing your finances starts with accurate bookkeeping, from daily to monthly tasks. What exactly do bookkeepers do?
If you're using the accrual method for financial records, outsourcing your accounts receivable and accounts payable management to a virtual bookkeeping service can save you valuable time not only with the long AR/AP process, but with managing your bills with your vendors and collections from your customers.
They can also give you real-time visibility into your AR/AP status, so you can always stay on top of what's due and when. All you'll have to do is approve their payments.
Virtual accounting services can provide advisory services such as invaluable insights into the financial performance of your business and offer strategies for maximizing your profits. These expert accountants can help you navigate the complex world of taxes, financing, and strategic planning.
Expenditures from different areas of your business operations are monitored and adjusted according to your budget. Basically, cost accounting is expense tracking on a deeper level. Most business owners don't need the whole accounting firm to work on this accounting service. Thus, it's quite convenient and, once more, money-saving.
Perhaps, you're wondering that tax services from an outsourced accounting team might not be able to give you the best output for tax filing since they might not be aware of the federal, state, or local tax laws.
But you'll be surprised to learn that online accountants are updated with the tax compliances, especially special tax laws for ecommerce businesses. Expert accountants have the know-how with hacks to minimize your tax liability and maximize your deductions.
No matter how small your entire team is, processing your employees’ pay might be the second tedious accounting task you need to accomplish, the first being filing your tax return. But with an online bookkeeping service, you'll have great results when working with the best accounting software, such as QuickBooks Online.
With both outsourced services and payroll software, you don't have to worry about your employees being paid accurately and on time and that taxes and other deductions are being properly withheld. Optimized CRM features can also provide valuable insights into employee behavior and performance.
Whenever growing businesses lose their way, it pays to make financial forecasts and assess financial statements such as balance sheets to evaluate their whole operation and correct necessary areas in their finances.
Approaches for financial analysis range from debt-to-asset ratio to trend analysis. With the right outsourced accounting department, you can improve your online business's bottom line and prevent sudden plunges in cash flow in the future.
So, should you hire a remote bookkeeper and accountant instead of a local bookkeeper? Yes. Imagine the accounting tasks we mentioned handed over to more qualified financial experts. Say goodbye to blindly managing your finances and say hello to positive cash flow—all thanks to convenient services like Unloop.
Here at Unloop, we provide outsourced financial services that can take care of all your bookkeeping and accounting needs, and even more complex financial tasks so you can focus on what you do best—growing your business. If you're interested in learning more about our services or would like to schedule a call with one of our team members, contact us today.
Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting.. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.