Bookkeeping for Amazon sellers can be a daunting and highly complex task, but it is essential. With all your financial transactions managed and recorded, financial reporting will be a breeze, making sales tax compliance easier and ensuring accurate financial insights for your business.
Learn how bookkeeping can contribute to your Amazon business's growth and overall success and discover which tools can make this challenging task easier below.
Managing your business’s financial health is one of the most crucial parts of establishing any successful company and brand. Not only can you determine your store’s current state, but you can also use the data you’ve gathered to spot trends and profitable opportunities.
When it comes to selling on the ecommerce giant, here are a few ways an Amazon seller can benefit from bookkeeping.
Knowledge is power, even in Amazon bookkeeping. After all, you can control your expenses only when you have visibility on them. You can pinpoint hefty expenses, keep costs low, aim for a higher income and profit, and save money with bookkeeping.
You have the convenience of seeing the following business costs and expenses on Amazon:
Besides tracking expenses, you can also use bookkeeping to monitor your sales, compute your income, check your total assets, and know the worth of your company.
Some of the details you can check with bookkeeping include the following:
Amazon has Marketplace Tax Collection to comply with the Marketplace Facilitator Law that allows third-party sellers to collect and remit sales taxes on behalf of sellers.
However, while Amazon already has accurate records for you—making tax time easier—it still pays to monitor the data. When all your Amazon small business transactions are monitored throughout the year, tax time and paying your taxes will be uncomplicated.
Make the most of the data from Amazon's default reports and different channels to see the financial state of your business through reports. The best accounting software generates the following in just a few clicks:
Bookkeeping and accounting tools have templates you can readily use, but they are also flexible if you want to generate customized reports. Plenty of bookkeeping services also allow you to choose the type of accounting method you prefer: cash-basis accounting, double-entry accounting, and more.
Most importantly, you can use the reports you generate above for investor presentations. Let the numbers talk through your reports.
Meanwhile, to scale your Amazon store, there will be times when you need to apply for loans. Many creditors require seeing some of the above reports to ensure you can pay for your debts and interest.
Because you have a proper bookkeeping system in place, you won’t have to worry about the two situations and other business presentations you must make.
We’ve established how helpful bookkeeping is for any Amazon store and business. However, laying out these benefits won’t remove the fact that bookkeeping is complicated, dizzying, and headache-inducing.
Fortunately, through innovation and technological advancements, plenty of accounting tools are available to help business owners and sellers like you through this arduous process. One of them is QuickBooks.
QuickBooks is an exceptional accounting system for viewing your bookkeeping numbers. So whether you don't have it yet or are already using it and want to integrate it, let Unloop shed some light on what you can do to produce those numbers easily.
Small business owners on Amazon have access to a global marketplace. As a result, they can have sales from all over the world. Tracking the current exchange rate for a particular overseas sale can be challenging. The same is true for business purchases and accounting for cost and expenses.
That's why QuickBooks's ability to account for the current exchange rate is very helpful. It will determine the correct currency amount at the sale or purchase, giving you and your accounting staff accurate numbers and peace of mind.
Once you discover how to integrate your QuickBooks Online to your Amazon seller account, doing your bookkeeping for sales transactions will be much easier.
QuickBooks Online can sync sales from your Amazon store to your online accounting software. Besides that, it can sync returns and refunds. Again, this feature takes the burden off you and your bookkeeper when searching for and recording sales.
Every business owner must remit the correct sales tax amount. While Amazon facilitates the collection process for each sale you make, it's your responsibility to determine the sales tax amount.
With QuickBooks, this process is made easier. The accounting software automatically calculates the correct sales tax amount for you, depending on the state which you must remit it to.
Another challenge for small businesses on Amazon is inventory management. While Amazon has a robust inventory system monitored by SKUs, this still has to translate to accounting. That means you must track every cost of goods sold (COGS) and product price apart from the outflow.
Tracking inventory is crucial when it comes to accounting for inventory. Thankfully, QuickBooks supports inventory tracking for Amazon sellers. The software allows real-time inventory valuation. Plus, it lets you sort inventory quantities at a given date and time for better inventory purchase planning.
For those new to QuickBooks and Amazon FBA, there can be a lot of questions running through your minds. Here are some important ones that can help you understand the whys and the hows of QuickBooks and Amazon.
QuickBooks Commerce (formerly TradeGecko) has a feature that integrates directly with your Amazon seller account. This QuickBooks plan is best for inventory tracking based on user reviews. In addition, it allows you to manage your orders at an accounting level.
You can have Amazon integration for product pricing and stock information for all products you upload on your Amazon store.
Unfortunately, QuickBooks’ parent company, Intuit, announced earlier this year that it would officially discontinue the plan after August 31, 2023 to focus on other products they offer, like QuickBooks Online.
QuickBooks offers a lot of accounting software plans both online and on desktop. If you want a more convenient way to sync your Amazon business account, getting QuickBooks Online (QBO) is better. If you still need to purchase QuickBooks, here's an overview of the QuickBooks plans available.
No, it's not. Newbie Amazon sellers interchange the terms Amazon Business and Amazon Seller Central—they think both are the same. But Amazon Business is a purchasing account for businesses that want to streamline bulk orders using the Amazon marketplace.
Businesses outside of Amazon integrate their Amazon Business account to fetch purchase transactions and make it easier for their accounting staff to keep records. On the other hand, Amazon Seller Central helps you become a seller in the huge Amazon Marketplace.
Not directly. But you can use several third-party applications to connect QuickBooks Online to your Amazon FBA or Amazon seller account. This can be tricky, especially for those new to Amazon and QuickBooks.
On the other hand, integrating QuickBooks Online with an Amazon Business account is much easier.
Luckily, your accounting will be a breeze once you get past the QuickBooks-Amazon integration. After that, you'll just have to figure out how to make the links needed for a fully-functioning Amazon seller account with a QBO.
Definitely! You can outsource it to professionals who specialize in Amazon seller bookkeeping and accounting. They'll handle the data migration and Amazon integration for you, so all you need to do is hand over information, sit back, and watch them work.
Certain accounting and bookkeeping companies like Unloop have their own QuickBooks Online plan. This makes it easy for us to set up an efficient accounting system for your Amazon store.
Besides pairing your Amazon business, we can also do the following, given our skills and expertise.
Companies like ours have years of experience handling ecommerce companies that sell on Amazon, Shopify, or other multichannel marketplaces. We know where to look and record each of your business transactions accurately.
If you already have accounts payable (and receivable) transactions, Unloop can help you manage payment and cash flow using QuickBooks Online. We'll know what payments are due and align them with your business's resources to ensure you pay at the right time without losing liquidity.
An Amazon seller's inventory is one of the hardest to manage and track. In addition, the inventory level is affected when a sale or refund is made. So if your business has frequent and high-volume sales, it can cause headaches to get the proper numbers on the number of goods and the cost of goods sold.
Bookkeeping and accounting agencies understand this predicament. That's why we handle the accounting aspects of your inventory to ensure you get the right COGS. This is crucial, especially when determining the correct net profit in your business's income statement.
If your Amazon business is big enough to have employees, you must account for their payroll. Bookkeeping and accounting agencies with sophisticated skills matched with a superior QuickBooks plan can make paying and accounting for payroll easy.
Business planning is important for business owners who aim for growth. They'll need a robust forecast of their potential income and expenses to plan well.
Accounting professionals using QuickBooks can use the accounting software's features to give you a projection of what your business may be like in the short and long term. You can decide whether to push through or sell your business.
Tax filing is another challenging task for an ecommerce business owner. Amazon sellers deal with two primary taxes: sales and income.
Professionals can use QuickBooks's tax sync feature for your Amazon business and offer assistance to pay your taxes well. Additionally, we know our way around tax forms for the kind of business structure you have to make accurate records.
While undeniably difficult, bookkeeping is essential for any business to function properly and efficiently. Amazon sellers with bookkeeping tools like QuickBooks already have a leg up in their daily operations.
They often integrate their QuickBooks with their Amazon Seller Central account to make bookkeeping processes easier. But this integration is easier said than done.
Luckily, bookkeeping agencies like Unloop know how to do it, so we can take it off your plate. Spend more time on growing your Amazon business by letting us do the integration and running your books for you. Call us at 877-421-7270 for a consultation, or check out our ecommerce services now.
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.