There is no question that Amazon is the world’s largest online selling site. Individuals who want to make it in the ecommerce industry will take a risk and sell on this ecommerce giant. As you create a game plan to ensure the success of your venture, do not forget about your bookkeeping and accounting.
Not everyone may be well-versed in this area, and it is not easy to learn the ropes. The good news is you can always delegate the task to those who know it well. A small business bookkeeping service for Amazon is just a click away. Wondering what a dedicated accounting team will provide you? Keep reading to see what top online bookkeeping services will track and what details you’ll get from daily, weekly, or monthly financial reports.
What Virtual Bookkeeping Services Track
The duty of professional bookkeeping services is keeping track of all the money that goes in and out of your account. The online bookkeeping service will apply their knowledge and skills, and through the help of software, they’ll organize your Amazon business income and expenses. You can expect to see these details well organized in your books.
1. Your Amazon Sales
The first detail you will see and probably be interested in is your sales. Sales is the money you make with every successful purchase. You’ll see a per-item breakdown in the books, especially if you sell different products on Amazon. As a result, you’ll know which products are bestsellers and which ones lag and need a little boost.
Aside from the in-depth view, you can also see a dashboard of sales summaries. Professional service firms can run weekly or monthly financial reports and submit them to you. You can also get updates daily if you know how to use accounting software.
2. Amazon Shipping and Fulfillment Fees
When selling on Amazon, you’ll have to choose between Fulfilled by a Merchant (FBM) or Fulfillment By Amazon (FBA). FBM means you, the seller, will handle the storage and shipment of all the orders you get from Amazon. Meanwhile, FBA is when Amazon handles everything for you: from product storage, packing, and shipping, to returns and refunds.
Both methods have their costs. If you are new to the business, updated books can give you a view of which of the two is more efficient. Some sellers find FBM helpful initially, especially with only a few orders. However, getting assistance from Amazon through FBA may be the best choice when your business booms.
3. Amazon Pay-Per-Click
You won’t find it difficult to advertise on Amazon as the platform has various sponsored ad offers:
- Sponsored Products: Advertising for a particular product shown within the Amazon platform.
- Sponsored Brands: Advertising meant to boost brand awareness shown within the Amazon platform.
- Sponsored Display: Advertisement that appears both in and out of the Amazon platform.
- Amazon Stores: A site leading customers to a page where all your products are posted, and your brand is featured.
As the name Pay-Per-Click (PPC) suggests, you only need to pay for the advertisement whenever you get a click. If you launch different sponsored ads simultaneously, you’ll have visibility of the clicks and the cost per type. This data will show you where you get the most impressions, clicks, and sales. You can decide on which one to focus on to save some costs and maintain high sales.
4. Advertising and Marketing
To stand out, reach as many customers as possible, and scale your business, you must advertise and market outside of Amazon. Social media advertising is one of the most effective methods today, as everyone seems to be on Facebook, Instagram, Twitter, or LinkedIn. Your customers will see your products and know your brand with the right targeting.
Vlogs and videos are also booming, so another efficient way to make your products and brand known is by partnering with vloggers. They can feature what you sell and introduce your brand in their content.
There are plenty more ways to market and advertise. Your creativity is the limit! But what’s good about tracking all your advertising and marketing expenses is seeing the costs and return on investment. As a result, you’ll know which campaigns are effective and should be invested in, and which ones need to be cut or revised for better performance.
5. Inventory Tracked by Online Bookkeeping Services
What products are still in stock? Which ones should I replenish? When you begin selling on Amazon, these are questions you’ll ask yourself repeatedly for your inventory management. Amazon tracks your inventory, so you'll have instant visibility on this.
You can make the most of this feature by partnering with accounting and bookkeeping online services. They can integrate Amazon analytics into their accounting software, so you’ll have a single place where you can see all data about your Amazon business. Many agencies offer this feature for free.
Aside from the inventory numbers, you’ll also have a view of the monetary value of the goods sold and stocks you are about to purchase. You’ll know which products sell faster than others. This information will help you in decision-making later.
6. Cost of Goods Sold
Before a product comes to life, it undergoes manufacturing, and the costs you need to pay to bring your products to life is called the Cost of Goods Sold (COGS). COGS vary per seller. Some manufacture from scratch, so they must pay for raw materials and labor costs. Meanwhile, some sell ready-made products, so they only need to worry about the shipment fee from the factory to their warehouse or to Amazon’s fulfillment centers.
Whatever you classify your production as, when your books are organized, you can monitor your COGS. You’ll see the breakdown of raw materials, worker costs, or the shipping fee from the factory to the warehouse.
7. Amazon FBA Service Fees
FBA has a lot of benefits. You won’t have to worry about renting a warehouse where you can store your products, as FBA centers have space for them. You become more credible when you have an FBA badge on your product listing. You can strengthen your customers’ trust in your brand because they know that Amazon will handle the shipping of the products they buy.
You also won’t need to worry about any customer inquiries; Amazon handles customer service for you. The ecommerce giant handles returns and refunds if there are damaged items. They will repackage perfectly working products that have been returned.
Nevertheless, these conveniences come at a price. You’ll see the FBA services fees you need to pay when your books are updated. You, with the help of the chief financial officer you are partnered with, can also plan how to minimize costs to increase your profit.
8. Expenses for Business Operations
Finally, although you are selling online, you also incur fees in operating your business, especially when you have an office and employees. You’ll see these all in the books, categorized neatly.
- Office Maintenance Expenses: Office rent, equipment purchases and maintenance, internet and utility payments.
- Employee Salary: Monthly gross income of every employee you have.
- Employee Benefits: Insurance, training and development, travel expenses, sick leaves, and loans.
- Donations: The money you give to charity.
- Bank Charges/Fees: Although most of the time this is minimal, these still count as business expenses, and you’ll see them reflected in your bank statements.
- Legal and Professional Services: If you partner with online bookkeeping companies to handle areas of your business, they fall under operating expenses too.
When you have visibility of your office’s average monthly expenses, you can see how you can lower your business operating costs. A dedicated team of bookkeepers and accountants will help you take control of the expenses you will incur in the coming months. If you think you’ve spent more than you should, through the help of a bookkeeper, there is always a chance to redeem your business finances.
9. Sales Taxes
Taxation is never an easy job, which is why many businesses rely on outsourced tax services. When you sell on Amazon, you’ll be forced to understand sales taxes. Unlike income tax, where rates are the same and rarely change, sales taxes vary per place, which makes computation more difficult.
The good news is that Amazon is equipped with a system that immediately computes and shows sales taxes.
When this data is integrated into your accounting system, it will also reflect on your financial records. Although Amazon is the one to collect and remit the taxes in most financial transactions, you’ll still see the sales tax data collected through Amazon Marketplace Tax Collection, the platform’s tax filing service. For the sales taxes you need to handle, the dedicated finance expert you are partnered with will stay on top of it.
Unloop’s Online Bookkeeping Services for Small Business
Accountant and bookkeeper services for small businesses can be of great help in understanding and handling Amazon’s complex processes. Through an agency’s help, you can also make more informed decisions about your business operations by understanding the various financial aspects that are tracked and included in your Amazon books. Additionally, using virtual bookkeeping services to help manage your business finances can greatly reduce stress and help you stay organized while running your business on Amazon.
If you are looking for the best virtual bookkeeping services to help you get the job done, our dedicated team at Unloop will be more than happy to help. We offer affordable bookkeeping services, and handle tax preparation, advanced bookkeeping, online accounting, and tax and payroll as well.
Schedule a call with us so that we can explain our offers to you. Talk to you soon!