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Mike P - Green background
Michael Pignatelli, CPA
CEO, Unloop

Category: Bookkeeping

Deciding to invest in bookkeeping software for your small business is already tough enough. Add choosing the right bookkeeping software for your business to the mix, and you can quickly become overwhelmed, especially with the countless choices available. 

In this article, we'll have Xero vs. Quickbooks vs. Freshbooks to help you decide which one is best for your business. We'll look at the similarities and differences in the accounting features of each program. So whether you're just starting or looking to switch to new software, read on for all the information you need to make the right choice!

Xero vs. Freshbooks vs. Quickbooks: Similarities

The three accounting software have plenty of similarities in the features they offer that you might ask yourself if there is a need for a discussion on Quickbooks vs. Xero vs. Freshbooks. When you sign-up for a plan on one these three, you can enjoy all these benefits:

Accounting Software FeaturesHow It WorksFreshbooksQuickbooks OnlineXero
Inventory Tracking and ManagementInventory management, integration to various eCommerce accounts, and tracking of in-stock items
Accounts Receivable and Payable (Double-Entry Accounting)Income and expense tracking for cash flow management
InvoiceIncludes limited or unlimited invoice customization, adding of a “Pay now” button, recurring invoices, and payment reminders
TaxesData prepared for the tax season
Project TrackingManage your teams and projects✅ 
Time TrackingTrack work hours of your employees
Bank ReconciliationMonitors and records your bank account transactions
AutomationMany features of the accounting software are automated and do not need manual entry
IntegrationsIntegrations on eCommerce sites, other software, and apps
Data Security, Role-based Access, Cloud-based Cloud-based storage is used for data security
Mobile ApplicationSoftware users on the go can check their business finances on their mobile phones
ReportingWith all business data available, you can generate reports in an instant
Free TrialTry out some of the premium features of the software for free
Payment GatewaysUsers can utilize bank, credit card, online payments, and more!
xero vs. quickbooks vs. freshbooks

Freshbooks vs. Quickbooks vs. Xero: What Set Each Apart

If the three have many similarities, these distinct features will be the deciding factors on which one you will pick. You’ll see that the three small business accounting software only have a few differences, but they will be enough for you to know which shines brighter than the rest. 

Freshbooks: Beginner’s Champion

If you want something straightforward and complete with everything a beginner in bookkeeping and accounting needs, Freshbooks is the perfect accounting software for you. The software has a simple interface and no complicated features that will make first-time users have a difficult time. Yet, despite the simplicity, it still has all the features you need to start and keep your business’s bookkeeping and accounting running.

Freshbooks pricing is also excellent for a startup or small business, freelancer, and a self-employed individual. The three plans don’t cost more than $15. Nevertheless, if Freshbooks doesn’t include the accounting services you need within the plan, Freshbooks has customized pricing plans. 

Quickbooks Live Bookkeeping and Priority Circle

One of the offers of Quickbooks Online is Live Bookkeeping which includes live bookkeeper customer support who will rummage through all your financial data for cleanup, storage, and categorization. So, if you ever sign-up for a plan for them in the middle of the year, you do not have to worry about the data from the first half of the year. They will take care of it.

You will also find Quickbooks Online’s payroll management feature helpful if you have employees. You can integrate a payroll software you are using on Quickbooks or use Quickbooks Payroll itself. 

Quickbooks doesn’t fall short with customer service too. After signing up for the plans, you will be added to the Priority Circle, where you can access resources on utilizing Quickbooks to manage your business’s accounting. 

Xero Analytics and Sales Taxes

Meanwhile, Xero takes data analysis to the next level through its Xero Analytics which you can upgrade to Analytics Plus. These features will allow you to produce a financial forecast from seven to 90 days in the future. You can also easily glimpse your business's financial health through a data dashboard projecting essential details about your business. 

Customize the reports you see by using your business's key performance indicators and metrics, so you can easily see where your business is doing good and which the areas of improvement are. 

Like Quickbooks, Xero takes over payroll management through Gusto Payroll integration. Xero also tracks sales taxes, one of the most difficult ones to track because of its sensitivity to change.

Bookkeeping Assistance from Unloop

Freshbooks, Quickbooks, and Xero are some of the best accounting software available, and they have many similarities. They are all cloud-based, double-entry accounting systems that allow you to manage your inventory, invoices, taxes, track your projects and time, and reconcile your bank’s information. Additionally, they each offer a free trial and various payment gateways. 

However, there are some key differences between the three programs. For example, Freshbooks is a beginner's champion because it is easy to use. Quickbooks’ Live Bookkeeping and Priority Circle can help you with bookkeeping tasks. While Xero Analytics and Sales Taxes can help keep your numbers on track if you sell products taxable in multiple states.

If you choose Quickbooks or Xero, we at Unloop can be your partner in running the tools. We have experienced bookkeepers and accountants who are well-versed in various accounting software. Give us a call today, and let us help you with your business’s bookkeeping.

Freshbooks vs. Quickbooks vs. Xero: How to Pick the Best
Watch Now

Deciding to invest in bookkeeping software for your small business is already tough enough. Add choosing the right bookkeeping software for your business to the mix, and you can quickly become overwhelmed, especially with the countless choices available. 

In this article, we'll have Xero vs. Quickbooks vs. Freshbooks to help you decide which one is best for your business. We'll look at the similarities and differences in the accounting features of each program. So whether you're just starting or looking to switch to new software, read on for all the information you need to make the right choice!

Xero vs. Freshbooks vs. Quickbooks: Similarities

The three accounting software have plenty of similarities in the features they offer that you might ask yourself if there is a need for a discussion on Quickbooks vs. Xero vs. Freshbooks. When you sign-up for a plan on one these three, you can enjoy all these benefits:

Accounting Software FeaturesHow It WorksFreshbooksQuickbooks OnlineXero
Inventory Tracking and ManagementInventory management, integration to various eCommerce accounts, and tracking of in-stock items
Accounts Receivable and Payable (Double-Entry Accounting)Income and expense tracking for cash flow management
InvoiceIncludes limited or unlimited invoice customization, adding of a “Pay now” button, recurring invoices, and payment reminders
TaxesData prepared for the tax season
Project TrackingManage your teams and projects✅ 
Time TrackingTrack work hours of your employees
Bank ReconciliationMonitors and records your bank account transactions
AutomationMany features of the accounting software are automated and do not need manual entry
IntegrationsIntegrations on eCommerce sites, other software, and apps
Data Security, Role-based Access, Cloud-based Cloud-based storage is used for data security
Mobile ApplicationSoftware users on the go can check their business finances on their mobile phones
ReportingWith all business data available, you can generate reports in an instant
Free TrialTry out some of the premium features of the software for free
Payment GatewaysUsers can utilize bank, credit card, online payments, and more!
xero vs. quickbooks vs. freshbooks

Freshbooks vs. Quickbooks vs. Xero: What Set Each Apart

If the three have many similarities, these distinct features will be the deciding factors on which one you will pick. You’ll see that the three small business accounting software only have a few differences, but they will be enough for you to know which shines brighter than the rest. 

Freshbooks: Beginner’s Champion

If you want something straightforward and complete with everything a beginner in bookkeeping and accounting needs, Freshbooks is the perfect accounting software for you. The software has a simple interface and no complicated features that will make first-time users have a difficult time. Yet, despite the simplicity, it still has all the features you need to start and keep your business’s bookkeeping and accounting running.

Freshbooks pricing is also excellent for a startup or small business, freelancer, and a self-employed individual. The three plans don’t cost more than $15. Nevertheless, if Freshbooks doesn’t include the accounting services you need within the plan, Freshbooks has customized pricing plans. 

Quickbooks Live Bookkeeping and Priority Circle

One of the offers of Quickbooks Online is Live Bookkeeping which includes live bookkeeper customer support who will rummage through all your financial data for cleanup, storage, and categorization. So, if you ever sign-up for a plan for them in the middle of the year, you do not have to worry about the data from the first half of the year. They will take care of it.

You will also find Quickbooks Online’s payroll management feature helpful if you have employees. You can integrate a payroll software you are using on Quickbooks or use Quickbooks Payroll itself. 

Quickbooks doesn’t fall short with customer service too. After signing up for the plans, you will be added to the Priority Circle, where you can access resources on utilizing Quickbooks to manage your business’s accounting. 

Xero Analytics and Sales Taxes

Meanwhile, Xero takes data analysis to the next level through its Xero Analytics which you can upgrade to Analytics Plus. These features will allow you to produce a financial forecast from seven to 90 days in the future. You can also easily glimpse your business's financial health through a data dashboard projecting essential details about your business. 

Customize the reports you see by using your business's key performance indicators and metrics, so you can easily see where your business is doing good and which the areas of improvement are. 

Like Quickbooks, Xero takes over payroll management through Gusto Payroll integration. Xero also tracks sales taxes, one of the most difficult ones to track because of its sensitivity to change.

Bookkeeping Assistance from Unloop

Freshbooks, Quickbooks, and Xero are some of the best accounting software available, and they have many similarities. They are all cloud-based, double-entry accounting systems that allow you to manage your inventory, invoices, taxes, track your projects and time, and reconcile your bank’s information. Additionally, they each offer a free trial and various payment gateways. 

However, there are some key differences between the three programs. For example, Freshbooks is a beginner's champion because it is easy to use. Quickbooks’ Live Bookkeeping and Priority Circle can help you with bookkeeping tasks. While Xero Analytics and Sales Taxes can help keep your numbers on track if you sell products taxable in multiple states.

If you choose Quickbooks or Xero, we at Unloop can be your partner in running the tools. We have experienced bookkeepers and accountants who are well-versed in various accounting software. Give us a call today, and let us help you with your business’s bookkeeping.

Read more

Every business needs a reliable bookkeeping system. This system is meant to help owners make critical decisions that can eventually lead to business growth. Unfortunately, many entrepreneurs don’t know the bookkeeping basics for small businesses, leading to their business’s early demise. 

Proper record-keeping is essential in running a business. But, if you’re not well-versed in finances, navigating the different bookkeeping tasks may be difficult. 

To help you understand, we’ve prepared a guide that every small business owner should know. So take notes!

Essential Bookkeeping Basics for Small Business 

For small business owners, even basic bookkeeping can be overwhelming. But the more you stay on top of managing your business finances, the easier it gets. Below is the list of things you must know to get better at managing your finances.

  1. The Difference Between Accounting and Bookkeeping

First things first, you should understand that bookkeeping and accounting are two different things. Many people confuse these two things. And although bookkeeping and accounting are separate tasks, they work together.

Bookkeeping is the backbone of an excellent accounting process. If you do the bookkeeping process properly, you can expect the result from accounting to be accurate and true, which will help scale your business.

💡 Bookkeeping is the act of documenting and collecting data, whereas accounting is the act of analyzing it. 

Without bookkeeping, businesses won’t be able to make sense of their numbers. To help you further understand bookkeeping, here is a table of how it differs from accounting.

FactorBookkeepingAccounting
DefinitionProcess of Recording Financial TransactionsProcess of Analyzing Financial Information
Credentials of Person InvolvedTraining/CertificationsAccounting Degree/CPA
Financial StatementsGeneral Ledger and AccountsComplex Financial Statements
Filing TaxesPayroll TaxesBusiness and Personal Tax Returns
  1. Types of Bookkeeping Systems

Small businesses can put two main types of bookkeeping systems in place. Business entities have the option of using one system exclusively or combining both. Here is a more detailed look at each type of bookkeeping system.

Single-Entry Bookkeeping

Most small businesses start with single-entry bookkeeping. With this method, every business transaction or activity only has one entry in the bookkeeping record. Only sales, purchases, receipts, and payments can be maintained using this manner. 

This bookkeeping method can keep your finances organized if your business handles minimal transactions.

Double-Entry Bookkeeping

The double-entry accounting system records business transactions in two entries. It offers checks and balances since it records a credit entry to match every debit entry. Transactions are recorded when money is received or lent—it is not a cash-based system.

Most professional bookkeepers use this method since this is universally adopted and gives the most accurate recording of financial transactions.

  1. Using One Accounting Method

Maintaining track of your business finances is simpler if you record everything properly. You can do various things to ensure you are maintaining your records. First, use the same accounting method for all your bookkeeping entries. But before that, here are the two accounting methods.

Cash Accounting Method

This is done by recording financial transactions when you receive or spend money. This is much simpler to do.

💡 Cash accounting method is good to adopt in the early phases of your small business.

Accrual Accounting Method

This is where you record your accounts receivable and accounts payable before you physically receive or pay the cash. This means that you can already record the transactions even if the money does not reach your accounts yet. 

💡 The accrual accounting method is better to be used as your business grows and expands as it can tell you the overall financial health of your company. 
  1. Managing Financial Documents

After knowing the types of bookkeeping systems and accounting methods, you should also understand how to manage financial records through ledgers. Your ledgers are the heart of bookkeeping. 

Without them, you won’t have proof of the transactions that happen in your business. Regular updates will give a clear view of your cash flow and help with your accounting. 

Prepare Ledger Accounts

💡 In accounting, the term "ledger" pertains to a book where companies document all the necessary information for the preparation of financial statements.

The success of bookkeeping is in organizing and categorizing your accounts. Your business’s finances come from many financial transactions. One can start small by generalizing records for sales or records in inventory tracking as long as it gives you a full and clear view of the money that goes around inside your business. 

As your business grows, here are some of types of accounts that would be included in your ledger: 

  • Assets, like accounts receivable, prepaid expenses, and cash 
  • Liabilities, like accounts payable, debt, and lines of credit
  • Revenue
  • Expenses
  • Equity 
  • Profit and loss

Post and Analyze Ledgers Regularly

Updating your ledgers depends on the volume of your transactions. You can update ledgers daily, weekly, and monthly. Regardless of how often you post on your ledgers, you must be consistent to avoid getting overwhelmed when the accounting period comes. 

After all these updates, consult an accountant to create financial reports for your small business. From here, you can see if your business is growing positively, if you need to enact strategies to improve further, or if you need to change any processes that aren’t working.

  1. Investing in Accounting and Bookkeeping Software

Manual data entry is the old way. There are small business accounting software that can do more than bookkeeping for your business. Investing in software streamlines all accounting tasks, not just bookkeeping, for your business to help you manage your finances.

Here are some factors to consider for small business accounting software:

  • User-Friendliness: Not all business owners can use advanced features. Look for an easy bookkeeping system so even beginners in your team can use it.
  • Payroll Services: Most accounting software nowadays help employers handle their employee’s wages. Some also have a time tracking feature, which can be helpful when your employee’s wages are based on the hour.
  • Inventory Management: If you have a product-based business, it is likely you have suppliers. Inventory tracking helps determine which supplies are still in stock and which need refilling. Some software can manage inventories across numerous warehouses.
  • Mobile-Friendliness: By being mobile-ready, business owners can easily access financial information anytime and anywhere. Software with a mobile app allows you to manage your finances in real time, in the palm of your hand.
  • Report Generation: Out of all the accounting features, generating reports may be the most important. There are accounting software options that can instantaneously generate different reports for businesses. Using financial data from these reports, you can better comprehend your company’s financial performance.
  • Cloud-Based: Online accounting software makes it easier for business owners to access their accounting data. They only need a stable internet connection and a device to access the software—no need to download and install programs.

Why Proper Bookkeeping Matters for Small Businesses

Whether operating a small or vast enterprise, bookkeeping is essential to build a successful business. Understanding your cash flow, tracking expenses, monitoring accounts payable, and even tracking your sales tax starts with bookkeeping.

Here are reasons why you should have a bookkeeping system.

  1. Traces the Source of Financial Transactions

You keep records of your business expenses, but isn’t it also nice to know the source of your transactions? Instead of looking at raw numbers and wondering where they came from or where they’ve gone, bookkeeping can tell precisely whether the entry is an expense or a sale.

In double-entry accounting reports, you can even record the type of business expenses in your books. There are several business expenses, such as meals, traveling costs, and accommodation. The details will help you plan your finances for more efficient spending.

Additionally, you can be sure that all of your financial transactions are in one place. So, when you need to pull your records for accounting or for references, you know where to look.

  1. Aids in Financial Reporting

If you have proper bookkeeping, you have complete and organized data. Accurate financial data is crucial for your financial reports. Bookkeeping can summarize your business’s expenses, income, and ledger categories.

There are three primary financial statements that businesses need to evaluate their performance:

  • Balance sheet
  • Income statement
  • Cash flow statement

Bookkeeping also provides more detailed reports such as expense reports, sales reports, and other statements showing key performance indicators. These reports are then used as communication for the business administrators and stakeholders.

Also, accurate financial reporting can be used to attract business investors. Information on how much profit your business generates and how you handle your expenses can be leveraged to attract inventors to your business.

  1. Helps Manage Cash Flow

Income and expense tracking is vital in every business. There is more to running a business than merely making money. You also have expenses to pay that will keep your business running. 

It is critical to understand whether the flow of funds into and out of your company is balanced. If your expenses are through the roof, you’ll need to make more money or cut down on expenses.

Likewise, you can create a budget to improve your business if you have a healthy profit. 

💡 You can allocate it to get new inventory, enroll your employees in seminars and workshops, upgrade your equipment, expand to a new location, and more.
  1. For Tax Compliance

In running a business, one thing is for sure—you have to fulfill your tax obligations. The government requires different forms of tax payables from businesses. Bookkeeping records will help businesses calculate the exact amount of taxes they must pay.

Failure to pay your taxes can lead to severe consequences. Bookkeeping is crucial in ensuring you won’t be fined for getting your taxes wrong.

Get Professional Bookkeeping Services at Unloop

Bookkeeping and accounting are two essential parts of running a business, but most business owners only see accounting as essential. Bookkeeping seems like a menial task that’s only around for keeping records of financial transactions. However, bookkeeping is also important as it serves as the basis of accounting and keeps your business balanced.

Looking for professionals who are well-versed in bookkeeping? Unloop can help you with your needs. We offer services on bookkeeping, forecasting, payroll, and taxes. 

Book a call with us now and talk to our experts to see what we can do for your business!

5 Must-Know Bookkeeping Basics for Small Business Owners
Watch Now

Every business needs a reliable bookkeeping system. This system is meant to help owners make critical decisions that can eventually lead to business growth. Unfortunately, many entrepreneurs don’t know the bookkeeping basics for small businesses, leading to their business’s early demise. 

Proper record-keeping is essential in running a business. But, if you’re not well-versed in finances, navigating the different bookkeeping tasks may be difficult. 

To help you understand, we’ve prepared a guide that every small business owner should know. So take notes!

Essential Bookkeeping Basics for Small Business 

For small business owners, even basic bookkeeping can be overwhelming. But the more you stay on top of managing your business finances, the easier it gets. Below is the list of things you must know to get better at managing your finances.

  1. The Difference Between Accounting and Bookkeeping

First things first, you should understand that bookkeeping and accounting are two different things. Many people confuse these two things. And although bookkeeping and accounting are separate tasks, they work together.

Bookkeeping is the backbone of an excellent accounting process. If you do the bookkeeping process properly, you can expect the result from accounting to be accurate and true, which will help scale your business.

💡 Bookkeeping is the act of documenting and collecting data, whereas accounting is the act of analyzing it. 

Without bookkeeping, businesses won’t be able to make sense of their numbers. To help you further understand bookkeeping, here is a table of how it differs from accounting.

FactorBookkeepingAccounting
DefinitionProcess of Recording Financial TransactionsProcess of Analyzing Financial Information
Credentials of Person InvolvedTraining/CertificationsAccounting Degree/CPA
Financial StatementsGeneral Ledger and AccountsComplex Financial Statements
Filing TaxesPayroll TaxesBusiness and Personal Tax Returns
  1. Types of Bookkeeping Systems

Small businesses can put two main types of bookkeeping systems in place. Business entities have the option of using one system exclusively or combining both. Here is a more detailed look at each type of bookkeeping system.

Single-Entry Bookkeeping

Most small businesses start with single-entry bookkeeping. With this method, every business transaction or activity only has one entry in the bookkeeping record. Only sales, purchases, receipts, and payments can be maintained using this manner. 

This bookkeeping method can keep your finances organized if your business handles minimal transactions.

Double-Entry Bookkeeping

The double-entry accounting system records business transactions in two entries. It offers checks and balances since it records a credit entry to match every debit entry. Transactions are recorded when money is received or lent—it is not a cash-based system.

Most professional bookkeepers use this method since this is universally adopted and gives the most accurate recording of financial transactions.

  1. Using One Accounting Method

Maintaining track of your business finances is simpler if you record everything properly. You can do various things to ensure you are maintaining your records. First, use the same accounting method for all your bookkeeping entries. But before that, here are the two accounting methods.

Cash Accounting Method

This is done by recording financial transactions when you receive or spend money. This is much simpler to do.

💡 Cash accounting method is good to adopt in the early phases of your small business.

Accrual Accounting Method

This is where you record your accounts receivable and accounts payable before you physically receive or pay the cash. This means that you can already record the transactions even if the money does not reach your accounts yet. 

💡 The accrual accounting method is better to be used as your business grows and expands as it can tell you the overall financial health of your company. 
  1. Managing Financial Documents

After knowing the types of bookkeeping systems and accounting methods, you should also understand how to manage financial records through ledgers. Your ledgers are the heart of bookkeeping. 

Without them, you won’t have proof of the transactions that happen in your business. Regular updates will give a clear view of your cash flow and help with your accounting. 

Prepare Ledger Accounts

💡 In accounting, the term "ledger" pertains to a book where companies document all the necessary information for the preparation of financial statements.

The success of bookkeeping is in organizing and categorizing your accounts. Your business’s finances come from many financial transactions. One can start small by generalizing records for sales or records in inventory tracking as long as it gives you a full and clear view of the money that goes around inside your business. 

As your business grows, here are some of types of accounts that would be included in your ledger: 

  • Assets, like accounts receivable, prepaid expenses, and cash 
  • Liabilities, like accounts payable, debt, and lines of credit
  • Revenue
  • Expenses
  • Equity 
  • Profit and loss

Post and Analyze Ledgers Regularly

Updating your ledgers depends on the volume of your transactions. You can update ledgers daily, weekly, and monthly. Regardless of how often you post on your ledgers, you must be consistent to avoid getting overwhelmed when the accounting period comes. 

After all these updates, consult an accountant to create financial reports for your small business. From here, you can see if your business is growing positively, if you need to enact strategies to improve further, or if you need to change any processes that aren’t working.

  1. Investing in Accounting and Bookkeeping Software

Manual data entry is the old way. There are small business accounting software that can do more than bookkeeping for your business. Investing in software streamlines all accounting tasks, not just bookkeeping, for your business to help you manage your finances.

Here are some factors to consider for small business accounting software:

  • User-Friendliness: Not all business owners can use advanced features. Look for an easy bookkeeping system so even beginners in your team can use it.
  • Payroll Services: Most accounting software nowadays help employers handle their employee’s wages. Some also have a time tracking feature, which can be helpful when your employee’s wages are based on the hour.
  • Inventory Management: If you have a product-based business, it is likely you have suppliers. Inventory tracking helps determine which supplies are still in stock and which need refilling. Some software can manage inventories across numerous warehouses.
  • Mobile-Friendliness: By being mobile-ready, business owners can easily access financial information anytime and anywhere. Software with a mobile app allows you to manage your finances in real time, in the palm of your hand.
  • Report Generation: Out of all the accounting features, generating reports may be the most important. There are accounting software options that can instantaneously generate different reports for businesses. Using financial data from these reports, you can better comprehend your company’s financial performance.
  • Cloud-Based: Online accounting software makes it easier for business owners to access their accounting data. They only need a stable internet connection and a device to access the software—no need to download and install programs.

Why Proper Bookkeeping Matters for Small Businesses

Whether operating a small or vast enterprise, bookkeeping is essential to build a successful business. Understanding your cash flow, tracking expenses, monitoring accounts payable, and even tracking your sales tax starts with bookkeeping.

Here are reasons why you should have a bookkeeping system.

  1. Traces the Source of Financial Transactions

You keep records of your business expenses, but isn’t it also nice to know the source of your transactions? Instead of looking at raw numbers and wondering where they came from or where they’ve gone, bookkeeping can tell precisely whether the entry is an expense or a sale.

In double-entry accounting reports, you can even record the type of business expenses in your books. There are several business expenses, such as meals, traveling costs, and accommodation. The details will help you plan your finances for more efficient spending.

Additionally, you can be sure that all of your financial transactions are in one place. So, when you need to pull your records for accounting or for references, you know where to look.

  1. Aids in Financial Reporting

If you have proper bookkeeping, you have complete and organized data. Accurate financial data is crucial for your financial reports. Bookkeeping can summarize your business’s expenses, income, and ledger categories.

There are three primary financial statements that businesses need to evaluate their performance:

  • Balance sheet
  • Income statement
  • Cash flow statement

Bookkeeping also provides more detailed reports such as expense reports, sales reports, and other statements showing key performance indicators. These reports are then used as communication for the business administrators and stakeholders.

Also, accurate financial reporting can be used to attract business investors. Information on how much profit your business generates and how you handle your expenses can be leveraged to attract inventors to your business.

  1. Helps Manage Cash Flow

Income and expense tracking is vital in every business. There is more to running a business than merely making money. You also have expenses to pay that will keep your business running. 

It is critical to understand whether the flow of funds into and out of your company is balanced. If your expenses are through the roof, you’ll need to make more money or cut down on expenses.

Likewise, you can create a budget to improve your business if you have a healthy profit. 

💡 You can allocate it to get new inventory, enroll your employees in seminars and workshops, upgrade your equipment, expand to a new location, and more.
  1. For Tax Compliance

In running a business, one thing is for sure—you have to fulfill your tax obligations. The government requires different forms of tax payables from businesses. Bookkeeping records will help businesses calculate the exact amount of taxes they must pay.

Failure to pay your taxes can lead to severe consequences. Bookkeeping is crucial in ensuring you won’t be fined for getting your taxes wrong.

Get Professional Bookkeeping Services at Unloop

Bookkeeping and accounting are two essential parts of running a business, but most business owners only see accounting as essential. Bookkeeping seems like a menial task that’s only around for keeping records of financial transactions. However, bookkeeping is also important as it serves as the basis of accounting and keeps your business balanced.

Looking for professionals who are well-versed in bookkeeping? Unloop can help you with your needs. We offer services on bookkeeping, forecasting, payroll, and taxes. 

Book a call with us now and talk to our experts to see what we can do for your business!

Read more

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Nearly every business owner knows QuickBooks. Only three years ago, Intuit announced QuickBooks Amazon integration for small businesses to enjoy seamless payment processing and reconciliation on Amazon Business. The productivity rate has exponentially increased since this launch. 

Still haven't connected your Amazon Business and QuickBooks Online accounts? We’ll show you how an Amazon-QuickBooks integration can help you achieve new levels of accounting efficiency and success. 

Upsides of QuickBooks Amazon Integration  

Two is better than one, they say. So imagine the capabilities of the most powerful online market platform and the most comprehensive accounting software combined. The possibilities are endless. 

QuickBooks organizes your bank accounts' order and purchase transactions into categories and links. Thus, having Amazon-QuickBooks integration is a great way to save time and keep track of your books to revisit wherever and whenever you need them. 

In addition, accounting automation and reconciliation have never been easier. You can easily locate a transaction and get a complete breakdown. 

Imagine your business flow if you had this kind of integration. 

  • Has an easy-to-understand dashboard: Users can access information about their business activities, like monthly sales and top-selling Amazon orders, through an easy-to-read graph. They can filter and drill them down based on the date range, product category, or individual stock-keeping units.
  • Seamlessly links with your bank: Your bank account balance will be in-sync with QuickBooks's records affected by your day-to-day business operations. As a result, you'll have an easier time reconciling your business's bank account balance. 
  • Manages your inventory: You can sync inventory replenishment and completed sales to your QuickBooks account. Get an accurate inventory valuation, positively affecting your income statement (COGS) and balance sheet (inventory account) reports.
  • Automates your transactions: The integration saves you time and ensures that everything in the books is accurate with automation. Important documents like income declarations and tax payments will also be accurate, saving you from penalties.
  • Calculates your sales and income taxes: You can view your sales tax obligation in each state with one click. Because it’s automated, it takes the hassle out of tax time. All you need is to put your product information and let the software do the rest.
  • Provides comprehensive reports: With all the data in one place, you can run different reports using a single software. You can also customize reports to see your company’s key performance indicators. 
  • Stores and secures your data in the cloud: The integration also ensures data security by storing all the data in the cloud, protecting all confidential financial data from hacking and corruption.

Do you know how to integrate Amazon with Quickbooks Online? How about your Amazon Seller account and QuickBooks Desktop? Let's help you set things up!  

Amazon Seller App on Mobile

QuickBooks-Amazon Seller Integration

Currently, QuickBooks Online cannot be synced directly to your Amazon account. But you can do this through a third-party technology or an accounting and bookkeeping agency. 

One of the ways to link your Amazon account and QuickBooks Online account is through Intuit’s own Amazon Marketplace Connector.

What You'll Need 

Procedure

Step 1: Connect. 

To start, go to Apps. Then, search Amazon Marketplace Connector by Intuit, click Get App Now, and follow the instructions. You'll then be directed to the log-in page of QuickBooks.

Step 2: Configure. 

You'll need to set up the following Synchronization Options: 

  • Account Timezone
  • Integrations Starting Date 
  • Email Sync Report Options 

Step 3: Organize Your Workflow.

Now, you can begin selecting and deselecting the details you want to be part of your workflow. QuickBooks offers several useful workflow options.

  • Invoice Creation Workflow: To manage your Amazon sales data as invoices on QuickBooks. 
  • Financial Event Workflow: To make deposits on QuickBooks Online and pay your employees automatically in the Amazon marketplace. 

Step 4: Sync. 

Your QuickBooks account is ready to sync once you have mixed and matched your workflow options. First, choose between auto-sync (which syncs your account every hour) and manual sync, and then on your Synchronization Options, click Sync Now

FAQs 

Is Amazon Marketplace Connector by Intuit free? 

  • Yes, and it has unlimited users. 

Will my data be safe and secure? 

  • Yes, your data will be safe and sound.

Is there customer support available? 

  • Yes, a dedicated team will help you set up or deal with any issues you may have. 

QuickBooks-Amazon Business Integration 

Fortunately, Amazon Business account owners have the Amazon Business Purchases app, which makes the integration process even easier for their QuickBooks Online account. 

What You'll Need 

  • Active QuickBooks Online account 
  • Log-in credentials as the master administrator
  • An existing account for Amazon Business

Procedure

Step 1: Connect. 

Go to Apps; this time, search for the Amazon Business Purchases app and download it.

Step 2: Sync. 

Next, choose how far back you want QuickBooks to go when it downloads transactions from Amazon: a week, a month, a year, or two years. Whatever you choose, you still control which downloaded transactions will be added to your books and shown on your reports. 

Once you have decided, select Agree. A pop-up tab will appear, and you must enter your Amazon Business account credentials. Boom—done! 

Step 3: Configure. 

Your new Amazon Business purchases will appear on QuickBooks automatically. However, you must confirm them before they appear in your books.

Purchases on Amazon appear in QuickBooks, the same as your connected bank and credit card accounts. 

Transactions listed under the For Review tab are up for approval. They won't appear on your reports or financial statements until you confirm them. Once you've confirmed a purchase from Amazon, you'll find it in the Review tab. It will stay there unless you undo your approval and make a change. 

If you download something you don't want to add to your QuickBooks, you can exclude it. 

Step 4: Manage Your Purchases. 

The Source or Payee column displays the bank or credit card account used when you make a purchase. 

Since you can use multiple bank accounts for these purchases, it is important to confirm what you see here to the bank accounts in your QuickBooks.  

If you need to manage your bank or credit card accounts on QuickBooks, select the Account drop-down menu of each account. Don't forget to save afterward.

Select one under the For Review tab to take a closer look at a purchase transaction. With this, you'll see the products you purchased and an Amazon order link. 

For each product purchased, select a category that best describes the product you bought. Once done, click Add. That transaction will automatically go to the Reviewed tab. If you want to see the transaction details again, just select them. 

If you also download from your bank or credit card records, you'll also download the purchases from them. Make sure to match them at the For Review tab after you've added them from Amazon Business Purchases. Why? 

FAQs 

Is the Amazon Business Purchases App free? 

  • Yes, unless you are using an Amazon Business Prime account. 

Can you use your personal Amazon.com account with QuickBooks? 

  • Unfortunately, you can't connect your QuickBooks Online with your personal Amazon account. It only works with Amazon Business accounts. 

Can you use Amazon Business to connect to your client's account through your QuickBooks Online account? 

  • You can't. Amazon and QuickBooks only allow the same administrator of both accounts to connect for the safety and security of your books and reports. 
QuickBooks Desktop Pro, Mac, Premier Software

QuickBooks Desktop Amazon Integration

Like the Amazon Seller Central-QBO integration, QuickBooks Desktop doesn't directly integrate with Amazon. For now, third-party apps in the market offer this integration for QuickBooks Desktop Pro, Premier, and Enterprise, such as:

  • A2X — Best-received Amazon ecommerce accounting app that uses Google's cloud platform; you can make up to 10,000 transactions per month 
  • Connex — Powered by Intuit and the priciest one with 24,000 transactions annually if you get the Gold subscription
  • Synder — Most reasonably priced among the three; its third-tier plan offers multi-channel businesses 1,000 plus transactions per month 

Note that these three are paid apps. A2X and Synder offer a week's worth of free trial, but Connex doesn't.

Despite using a third-party app and spending excess expenses, connecting QuickBooks Desktop and Amazon is easier than you might think. Just go through the configuration wizard, select Amazon (or any platform you prefer), and click Connect. Easy! 

E-Commerce Integration with Webgility

Intuit has decided to make life easier for Amazon sellers with the recent release of QuickBooks Desktop 2022. 

The product’s new features include its swift and seamless e-commerce integration with Webgility, enabling users to track their transactions on Amazon, Shopify, and other e-commerce platforms easily and streamline other business processes.

Step 1: Sign up.

Simply register and purchase a package in Webgility to get started.

Step 2: Initiate.

In your QuickBooks Desktop interface, head to Company and click My Company. You will see an option to Get E-commerce Integration. Click this option.

Step 3: Connect.

Select and activate your preferred Webgility package. With your QuickBooks Desktop 2022 account signed in, your QuickBooks account will promptly link with Webgility.

Get Financial Advice from Unloop's Experts 

QuickBooks Amazon integration saves up time on manual data entry and eliminates switching between QuickBooks and Amazon over and over. Time is money, as we say. 

Moreover, it gives you an overview of how your business is doing. Integrating your Amazon to QuickBooks Online or Desktop is a great financial decision if you have a growing Amazon business and increasing business partners. The QuickBooks Desktop version may have some drawbacks in terms of pricing, but it's worth the money for hassle-free bookkeeping!

If you're unsure about this hip and new integration by Intuit and Amazon, you can always contact Unloop's financial experts for all your accounting needs. We're here to offer our insights and our high-quality ecommerce accounting service. Call us at 877-421-7270, and talk about the future of your Amazon business with us today.

QuickBooks-Amazon Integration: Next-Level Connections for Your Business
Watch Now

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Nearly every business owner knows QuickBooks. Only three years ago, Intuit announced QuickBooks Amazon integration for small businesses to enjoy seamless payment processing and reconciliation on Amazon Business. The productivity rate has exponentially increased since this launch. 

Still haven't connected your Amazon Business and QuickBooks Online accounts? We’ll show you how an Amazon-QuickBooks integration can help you achieve new levels of accounting efficiency and success. 

Upsides of QuickBooks Amazon Integration  

Two is better than one, they say. So imagine the capabilities of the most powerful online market platform and the most comprehensive accounting software combined. The possibilities are endless. 

QuickBooks organizes your bank accounts' order and purchase transactions into categories and links. Thus, having Amazon-QuickBooks integration is a great way to save time and keep track of your books to revisit wherever and whenever you need them. 

In addition, accounting automation and reconciliation have never been easier. You can easily locate a transaction and get a complete breakdown. 

Imagine your business flow if you had this kind of integration. 

  • Has an easy-to-understand dashboard: Users can access information about their business activities, like monthly sales and top-selling Amazon orders, through an easy-to-read graph. They can filter and drill them down based on the date range, product category, or individual stock-keeping units.
  • Seamlessly links with your bank: Your bank account balance will be in-sync with QuickBooks's records affected by your day-to-day business operations. As a result, you'll have an easier time reconciling your business's bank account balance. 
  • Manages your inventory: You can sync inventory replenishment and completed sales to your QuickBooks account. Get an accurate inventory valuation, positively affecting your income statement (COGS) and balance sheet (inventory account) reports.
  • Automates your transactions: The integration saves you time and ensures that everything in the books is accurate with automation. Important documents like income declarations and tax payments will also be accurate, saving you from penalties.
  • Calculates your sales and income taxes: You can view your sales tax obligation in each state with one click. Because it’s automated, it takes the hassle out of tax time. All you need is to put your product information and let the software do the rest.
  • Provides comprehensive reports: With all the data in one place, you can run different reports using a single software. You can also customize reports to see your company’s key performance indicators. 
  • Stores and secures your data in the cloud: The integration also ensures data security by storing all the data in the cloud, protecting all confidential financial data from hacking and corruption.

Do you know how to integrate Amazon with Quickbooks Online? How about your Amazon Seller account and QuickBooks Desktop? Let's help you set things up!  

Amazon Seller App on Mobile

QuickBooks-Amazon Seller Integration

Currently, QuickBooks Online cannot be synced directly to your Amazon account. But you can do this through a third-party technology or an accounting and bookkeeping agency. 

One of the ways to link your Amazon account and QuickBooks Online account is through Intuit’s own Amazon Marketplace Connector.

What You'll Need 

Procedure

Step 1: Connect. 

To start, go to Apps. Then, search Amazon Marketplace Connector by Intuit, click Get App Now, and follow the instructions. You'll then be directed to the log-in page of QuickBooks.

Step 2: Configure. 

You'll need to set up the following Synchronization Options: 

  • Account Timezone
  • Integrations Starting Date 
  • Email Sync Report Options 

Step 3: Organize Your Workflow.

Now, you can begin selecting and deselecting the details you want to be part of your workflow. QuickBooks offers several useful workflow options.

  • Invoice Creation Workflow: To manage your Amazon sales data as invoices on QuickBooks. 
  • Financial Event Workflow: To make deposits on QuickBooks Online and pay your employees automatically in the Amazon marketplace. 

Step 4: Sync. 

Your QuickBooks account is ready to sync once you have mixed and matched your workflow options. First, choose between auto-sync (which syncs your account every hour) and manual sync, and then on your Synchronization Options, click Sync Now

FAQs 

Is Amazon Marketplace Connector by Intuit free? 

  • Yes, and it has unlimited users. 

Will my data be safe and secure? 

  • Yes, your data will be safe and sound.

Is there customer support available? 

  • Yes, a dedicated team will help you set up or deal with any issues you may have. 

QuickBooks-Amazon Business Integration 

Fortunately, Amazon Business account owners have the Amazon Business Purchases app, which makes the integration process even easier for their QuickBooks Online account. 

What You'll Need 

  • Active QuickBooks Online account 
  • Log-in credentials as the master administrator
  • An existing account for Amazon Business

Procedure

Step 1: Connect. 

Go to Apps; this time, search for the Amazon Business Purchases app and download it.

Step 2: Sync. 

Next, choose how far back you want QuickBooks to go when it downloads transactions from Amazon: a week, a month, a year, or two years. Whatever you choose, you still control which downloaded transactions will be added to your books and shown on your reports. 

Once you have decided, select Agree. A pop-up tab will appear, and you must enter your Amazon Business account credentials. Boom—done! 

Step 3: Configure. 

Your new Amazon Business purchases will appear on QuickBooks automatically. However, you must confirm them before they appear in your books.

Purchases on Amazon appear in QuickBooks, the same as your connected bank and credit card accounts. 

Transactions listed under the For Review tab are up for approval. They won't appear on your reports or financial statements until you confirm them. Once you've confirmed a purchase from Amazon, you'll find it in the Review tab. It will stay there unless you undo your approval and make a change. 

If you download something you don't want to add to your QuickBooks, you can exclude it. 

Step 4: Manage Your Purchases. 

The Source or Payee column displays the bank or credit card account used when you make a purchase. 

Since you can use multiple bank accounts for these purchases, it is important to confirm what you see here to the bank accounts in your QuickBooks.  

If you need to manage your bank or credit card accounts on QuickBooks, select the Account drop-down menu of each account. Don't forget to save afterward.

Select one under the For Review tab to take a closer look at a purchase transaction. With this, you'll see the products you purchased and an Amazon order link. 

For each product purchased, select a category that best describes the product you bought. Once done, click Add. That transaction will automatically go to the Reviewed tab. If you want to see the transaction details again, just select them. 

If you also download from your bank or credit card records, you'll also download the purchases from them. Make sure to match them at the For Review tab after you've added them from Amazon Business Purchases. Why? 

FAQs 

Is the Amazon Business Purchases App free? 

  • Yes, unless you are using an Amazon Business Prime account. 

Can you use your personal Amazon.com account with QuickBooks? 

  • Unfortunately, you can't connect your QuickBooks Online with your personal Amazon account. It only works with Amazon Business accounts. 

Can you use Amazon Business to connect to your client's account through your QuickBooks Online account? 

  • You can't. Amazon and QuickBooks only allow the same administrator of both accounts to connect for the safety and security of your books and reports. 
QuickBooks Desktop Pro, Mac, Premier Software

QuickBooks Desktop Amazon Integration

Like the Amazon Seller Central-QBO integration, QuickBooks Desktop doesn't directly integrate with Amazon. For now, third-party apps in the market offer this integration for QuickBooks Desktop Pro, Premier, and Enterprise, such as:

  • A2X — Best-received Amazon ecommerce accounting app that uses Google's cloud platform; you can make up to 10,000 transactions per month 
  • Connex — Powered by Intuit and the priciest one with 24,000 transactions annually if you get the Gold subscription
  • Synder — Most reasonably priced among the three; its third-tier plan offers multi-channel businesses 1,000 plus transactions per month 

Note that these three are paid apps. A2X and Synder offer a week's worth of free trial, but Connex doesn't.

Despite using a third-party app and spending excess expenses, connecting QuickBooks Desktop and Amazon is easier than you might think. Just go through the configuration wizard, select Amazon (or any platform you prefer), and click Connect. Easy! 

E-Commerce Integration with Webgility

Intuit has decided to make life easier for Amazon sellers with the recent release of QuickBooks Desktop 2022. 

The product’s new features include its swift and seamless e-commerce integration with Webgility, enabling users to track their transactions on Amazon, Shopify, and other e-commerce platforms easily and streamline other business processes.

Step 1: Sign up.

Simply register and purchase a package in Webgility to get started.

Step 2: Initiate.

In your QuickBooks Desktop interface, head to Company and click My Company. You will see an option to Get E-commerce Integration. Click this option.

Step 3: Connect.

Select and activate your preferred Webgility package. With your QuickBooks Desktop 2022 account signed in, your QuickBooks account will promptly link with Webgility.

Get Financial Advice from Unloop's Experts 

QuickBooks Amazon integration saves up time on manual data entry and eliminates switching between QuickBooks and Amazon over and over. Time is money, as we say. 

Moreover, it gives you an overview of how your business is doing. Integrating your Amazon to QuickBooks Online or Desktop is a great financial decision if you have a growing Amazon business and increasing business partners. The QuickBooks Desktop version may have some drawbacks in terms of pricing, but it's worth the money for hassle-free bookkeeping!

If you're unsure about this hip and new integration by Intuit and Amazon, you can always contact Unloop's financial experts for all your accounting needs. We're here to offer our insights and our high-quality ecommerce accounting service. Call us at 877-421-7270, and talk about the future of your Amazon business with us today.

Read more

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Are you running an ecommerce business? If yes, you know the online marketing platform is dynamic and highly competitive. Financial management can be especially tricky due to the unique characteristics and challenges associated with the businesses it caters to. You don't just need an accountant—you need an ecommerce accountant specializing in online businesses.

If you have started a business before, you may have gained some knowledge in managing and running your current venture. But when it comes to the online market, accounting works differently. 

In this article, we'll learn more about the role of an expert in ecommerce accounting, why you should consider hiring one, and what makes a good accountant.

Ecommerce Accountants: Who Are They? 

As an ecommerce business owner, many things must be done before your profit starts rolling into your bank account. Some of the most crucial processes are accounting and bookkeeping services, which are a must for your small company's financial management needs. 

Bookkeepers vs. Accountants

These services may sound the same if you're new to the business. But their roles are distinct, and both services are equally important for your business's success. 

a graphic showing the tasks a bookkeeper and an accountant does, from the bookkeeper column: prepares financial statements, handles inventory finances, manages payroll, produces invoices; from the accountant column: manages cash flow, generates and organizes financial reports , strategic tax planning, provides financial health advice, forecasts revenue.
💡 To put it plainly, an expert bookkeeper keeps all the records of your business transactions. 

You can see it as keeping notes for your business expenses and income. Here are some tasks a bookkeeper does:

  • Financial statement preparation. A bookkeeper is responsible for recording financial transactions and organizing and maintaining financial records. 
  • Inventory management. They record and track inventory transactions and update inventory documents. 
  • Managing payroll. A bookkeeper helps with processing employee wages and deductions. 
  • Producing invoices. Bookkeepers help in producing invoices, entering bills, and sending payments. 
💡 On the other hand, accountants use your financial information for analysis. 

All the financial data from your bookkeeping can assess the current status of your ecommerce business. Here are some tasks an accountant can help you with:

  • Monitor cash flow management and provide metrics to see your cash position.
  • Generate and prepare financial reports (balance sheet, tax returns, etc.) to show your business's financial standing.
  • Tax planning. Identify tax-saving opportunities, and share advice on minimizing tax liabilities.
  • Share advice and recommendations on your business's financial health and inventory management.
  • Forecast your potential income in the coming months or years to help you with major business decisions.

How Do Accountants Help In Ecommerce Accounting?

Aside from those we mentioned above, accountants can do several vital tasks for your ecommerce business. Let's take a closer look at these tasks to see the advantages these experts in ecommerce accounting can provide you. 

a graphic showing the role of accountants in ecommerce accounting, from left to right: streamline book entries, assist auditors with confidence, expert tax handling, forecasting and risk assessment. 
  1. Preparing and Adjusting Book Entries 

An accountant's job is to make sense of your business's financial records. Your initial financial records only show transactions, so the full picture remains unclear. Your accountants balance these transactions so you understand the flow of your income and expenses. 

They also help track the accurate dates and times of your financial activities. In some businesses, there are scheduled financial transactions. But if you're inexperienced, you might interpret this as lost money. Accountants can help with these issues and keep your books clean and organized. 

  1. Collaborating With Your Business's Auditors 

Many new sellers think that small businesses are exempted from auditing. But in reality, most tax collection agencies allocate resources to audit small businesses because these enterprises often file taxes incorrectly. 

💡Audits are done by an independent auditor who thoroughly examines your books. They ensure all your financial statements’ data go where it's intended to as recorded in your books. 

Accountants help ensure you have accurate financial information, and they can work with the auditor to address any potential issues. Additionally, when your audit reports come out well, it opens you to loan opportunities and even sponsor partners that can help expand your business. 

  1. Handling All Tax-Related Matters 

Collecting and filing taxes can be very confusing, especially sales tax in the ecommerce market. You'll burn through your profit by paying more than needed or incur fees if you don't know how the taxing system works. Ecommerce tax accountants ensure you avoid this and maintain smooth and compliant tax handling.

For example, ecommerce business owners on Amazon must collect and remit sales taxes after reaching 200 separate sales transactions. However, this threshold varies depending on state sales tax laws. Policies also differ depending on the ecommerce platforms the sellers are using.

Your accountants can help you

  • price your products to collect the proper sales tax,
  • pay taxes on time to avoid issues,
  • ensure timely and accurate sales tax compliance,
  • get discounts on your taxes; and even 
  • find ways to make you eligible for exemptions.
  1. Precise Forecasting and Risk Analysis 

The data in your books are not only helpful for your past and present situation. Your accountants can also use it to forecast your future income. Recorded data creates a pattern that experts in ecommerce accounting interpret to see how much you will earn in the coming months. 

Ecommerce trends also change rapidly. Ecommerce sellers like you can't have the same strategy for the whole year; doing so will make it difficult to stay on top of your competitors. Forecasting is essential in detecting these details, enabling you to assess your next move and achieve optimal results.

You can plan with your partner e commerce accountants about

  • changing prices,
  • identifying unique challenges on ecommerce platforms,
  • maximizing your inventories, and even 
  • the types of goods you should sell.

What to Look for When Hiring an Ecommerce Accountant

Hiring external accounting and other services may seem unnecessary and not-so-secure to you, but they will benefit your business in the long run. Of course, choosing the correct expert to trust is essential. If you are to invest in external services, you should get the right one. 

Here are the top things to consider when hiring an ecommerce accountant: 

  1. Relevant Ecommerce Experience

Look for an accountant with specialized experience in ecommerce businesses. The systems in sales channel platforms such as Amazon or Shopify differ, so managing your expenses may vary. Accountants with relevant experience in ecommerce know how to properly navigate and elevate your business through these dynamic, competitive environments. 

  1. Proficiency with Accounting Tools 

Competent ecommerce accountants are well-versed in popular platforms like QuickBooks Online, Xero, or other accounting software. Their proficiency with such tools streamlines the accounting processes and boosts work efficiency. 

  1. Understanding of Tax Implications for Ecommerce

Ecommerce businesses face unique tax considerations, especially when dealing with sales tax, international transactions, and nexus laws. Your chosen accountant should have a thorough understanding of tax regulations and be able to ensure compliance with relevant tax laws. 

  1. Proactive Financial Analysis and Planning

Exceptional ecommerce accountants proactively analyze financial data, identify trends, and provide strategic insights for a business's growth. Look for an accountant who offers detailed financial forecasts, cash flow analysis, and budgeting guidance. 

With their support, you can make informed decisions, allocate resources effectively, and navigate online marketplace fluctuations more confidently. 

Final Thoughts

Are you convinced that ecommerce accountants can help you with your business needs? Then, it's a wise move to hire ecommerce accounting services. Don't go wasting hard-earned money on mediocre service. At Unloop, we give the best service to ecommerce companies.

We have bookkeeping, income, and sales tax services perfect for small businesses. We also use the best accounting software to automate our processes. Our experts are experienced in handling ecommerce businesses, so you know you are in good hands from day one. 
Book a call with us today, and let's accomplish all your ecommerce accounting needs!

What Are The Roles of an Ecommerce Accountant in Small Businesses? 
Watch Now

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Are you running an ecommerce business? If yes, you know the online marketing platform is dynamic and highly competitive. Financial management can be especially tricky due to the unique characteristics and challenges associated with the businesses it caters to. You don't just need an accountant—you need an ecommerce accountant specializing in online businesses.

If you have started a business before, you may have gained some knowledge in managing and running your current venture. But when it comes to the online market, accounting works differently. 

In this article, we'll learn more about the role of an expert in ecommerce accounting, why you should consider hiring one, and what makes a good accountant.

Ecommerce Accountants: Who Are They? 

As an ecommerce business owner, many things must be done before your profit starts rolling into your bank account. Some of the most crucial processes are accounting and bookkeeping services, which are a must for your small company's financial management needs. 

Bookkeepers vs. Accountants

These services may sound the same if you're new to the business. But their roles are distinct, and both services are equally important for your business's success. 

a graphic showing the tasks a bookkeeper and an accountant does, from the bookkeeper column: prepares financial statements, handles inventory finances, manages payroll, produces invoices; from the accountant column: manages cash flow, generates and organizes financial reports , strategic tax planning, provides financial health advice, forecasts revenue.
💡 To put it plainly, an expert bookkeeper keeps all the records of your business transactions. 

You can see it as keeping notes for your business expenses and income. Here are some tasks a bookkeeper does:

  • Financial statement preparation. A bookkeeper is responsible for recording financial transactions and organizing and maintaining financial records. 
  • Inventory management. They record and track inventory transactions and update inventory documents. 
  • Managing payroll. A bookkeeper helps with processing employee wages and deductions. 
  • Producing invoices. Bookkeepers help in producing invoices, entering bills, and sending payments. 
💡 On the other hand, accountants use your financial information for analysis. 

All the financial data from your bookkeeping can assess the current status of your ecommerce business. Here are some tasks an accountant can help you with:

  • Monitor cash flow management and provide metrics to see your cash position.
  • Generate and prepare financial reports (balance sheet, tax returns, etc.) to show your business's financial standing.
  • Tax planning. Identify tax-saving opportunities, and share advice on minimizing tax liabilities.
  • Share advice and recommendations on your business's financial health and inventory management.
  • Forecast your potential income in the coming months or years to help you with major business decisions.

How Do Accountants Help In Ecommerce Accounting?

Aside from those we mentioned above, accountants can do several vital tasks for your ecommerce business. Let's take a closer look at these tasks to see the advantages these experts in ecommerce accounting can provide you. 

a graphic showing the role of accountants in ecommerce accounting, from left to right: streamline book entries, assist auditors with confidence, expert tax handling, forecasting and risk assessment. 
  1. Preparing and Adjusting Book Entries 

An accountant's job is to make sense of your business's financial records. Your initial financial records only show transactions, so the full picture remains unclear. Your accountants balance these transactions so you understand the flow of your income and expenses. 

They also help track the accurate dates and times of your financial activities. In some businesses, there are scheduled financial transactions. But if you're inexperienced, you might interpret this as lost money. Accountants can help with these issues and keep your books clean and organized. 

  1. Collaborating With Your Business's Auditors 

Many new sellers think that small businesses are exempted from auditing. But in reality, most tax collection agencies allocate resources to audit small businesses because these enterprises often file taxes incorrectly. 

💡Audits are done by an independent auditor who thoroughly examines your books. They ensure all your financial statements’ data go where it's intended to as recorded in your books. 

Accountants help ensure you have accurate financial information, and they can work with the auditor to address any potential issues. Additionally, when your audit reports come out well, it opens you to loan opportunities and even sponsor partners that can help expand your business. 

  1. Handling All Tax-Related Matters 

Collecting and filing taxes can be very confusing, especially sales tax in the ecommerce market. You'll burn through your profit by paying more than needed or incur fees if you don't know how the taxing system works. Ecommerce tax accountants ensure you avoid this and maintain smooth and compliant tax handling.

For example, ecommerce business owners on Amazon must collect and remit sales taxes after reaching 200 separate sales transactions. However, this threshold varies depending on state sales tax laws. Policies also differ depending on the ecommerce platforms the sellers are using.

Your accountants can help you

  • price your products to collect the proper sales tax,
  • pay taxes on time to avoid issues,
  • ensure timely and accurate sales tax compliance,
  • get discounts on your taxes; and even 
  • find ways to make you eligible for exemptions.
  1. Precise Forecasting and Risk Analysis 

The data in your books are not only helpful for your past and present situation. Your accountants can also use it to forecast your future income. Recorded data creates a pattern that experts in ecommerce accounting interpret to see how much you will earn in the coming months. 

Ecommerce trends also change rapidly. Ecommerce sellers like you can't have the same strategy for the whole year; doing so will make it difficult to stay on top of your competitors. Forecasting is essential in detecting these details, enabling you to assess your next move and achieve optimal results.

You can plan with your partner e commerce accountants about

  • changing prices,
  • identifying unique challenges on ecommerce platforms,
  • maximizing your inventories, and even 
  • the types of goods you should sell.

What to Look for When Hiring an Ecommerce Accountant

Hiring external accounting and other services may seem unnecessary and not-so-secure to you, but they will benefit your business in the long run. Of course, choosing the correct expert to trust is essential. If you are to invest in external services, you should get the right one. 

Here are the top things to consider when hiring an ecommerce accountant: 

  1. Relevant Ecommerce Experience

Look for an accountant with specialized experience in ecommerce businesses. The systems in sales channel platforms such as Amazon or Shopify differ, so managing your expenses may vary. Accountants with relevant experience in ecommerce know how to properly navigate and elevate your business through these dynamic, competitive environments. 

  1. Proficiency with Accounting Tools 

Competent ecommerce accountants are well-versed in popular platforms like QuickBooks Online, Xero, or other accounting software. Their proficiency with such tools streamlines the accounting processes and boosts work efficiency. 

  1. Understanding of Tax Implications for Ecommerce

Ecommerce businesses face unique tax considerations, especially when dealing with sales tax, international transactions, and nexus laws. Your chosen accountant should have a thorough understanding of tax regulations and be able to ensure compliance with relevant tax laws. 

  1. Proactive Financial Analysis and Planning

Exceptional ecommerce accountants proactively analyze financial data, identify trends, and provide strategic insights for a business's growth. Look for an accountant who offers detailed financial forecasts, cash flow analysis, and budgeting guidance. 

With their support, you can make informed decisions, allocate resources effectively, and navigate online marketplace fluctuations more confidently. 

Final Thoughts

Are you convinced that ecommerce accountants can help you with your business needs? Then, it's a wise move to hire ecommerce accounting services. Don't go wasting hard-earned money on mediocre service. At Unloop, we give the best service to ecommerce companies.

We have bookkeeping, income, and sales tax services perfect for small businesses. We also use the best accounting software to automate our processes. Our experts are experienced in handling ecommerce businesses, so you know you are in good hands from day one. 
Book a call with us today, and let's accomplish all your ecommerce accounting needs!

Read more

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

No matter how small your ecommerce business is, you still have a tax liability. If you live in Canada and sell a few items online, you must still pay taxes on your earnings. There are several different types of taxes that you may be responsible for, but let’s explore the essentials of filing income tax in Canada. 

This blog post will break everything down about filing your income taxes. Keep reading to learn more! 

Income Tax Basics in Canada 

Running an ecommerce business in Canada involves understanding and navigating the Canadian income tax system. It’s also important to note that the same tax laws apply whether you’re operating a brick-and-mortar or web-based business. 

So, as a business owner, you are responsible for calculating and reporting your income and paying the required taxes to the Canada Revenue Agency (CRA).

Here are some of the basics of filing income taxes in Canada: 

  1. Determine Your Business Structure

How you’re taxed and the forms you must fill out during tax time depends on your business structure. Since you’re managing an ecommerce business, it falls into one of these business structures: 

  • Sole proprietorship. An individual owns and operates the business. 
  • Partnership. Two or more individuals operate and share ownership of the business. 
  • Incorporation. The company is considered a separate legal entity from its owners. 

Sole proprietorships and partnerships report their income on a personal tax return, while corporations file a separate corporate tax return. In some cases, a Canadian-controlled private corporation (CCPC) may be eligible for a reduced tax rate of 9%.

  1. Consider Territorial Rates

When calculating income tax, consider both federal and provincial or territorial rates. The federal income tax brackets for individuals range from 15% to 33%, whereas corporations pay a net tax rate of 15% with a basic rate of 38%, reduced to 28% after federal tax abatement. 

Rates of territorial or provincial income taxes vary depending on your location. So, aside from your business structure, these rates also apply when paying your taxes. 

  1. Charging Sales Tax

For ecommerce businesses, it’s essential to charge sales tax on sales made to Canadian customers. If your annual revenue exceeds $30,000, you must charge the appropriate sales tax based on the destination province. 

This involves registering for the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) and remitting the collected taxes to the CRA.

  1. Tax Deductions

In Canada, you can reduce your taxable income through tax deductions and credits. For small business owners like you, tax deductions can bump you into a lower tax bracket, reducing the amount of taxes you pay for the year. 

All expenses incurred while operating your business are categorized as business expenses, and you can claim them as deductions on your tax return. For example, if you’re renting a warehouse to store your inventory, the utility costs you incur are a business deduction.

  1. Tax Refunds

When filing your income tax, you may calculate the taxes owed or any refunds you may be entitled to. If you cannot make the full payment immediately, you can arrange a payment plan with the CRA. 

On the other hand, if you overpaid your taxes, you may be eligible for a tax refund. Tax refunds could result from the CRA collecting more income tax than what was rightfully due, and they will refund the overpayment. 

Types of Taxes You Need to Pay

Businesses have to pay taxes like individual taxpayers based on their profit. Here are the types of taxes that may apply to your business: 

  1. Income Tax

Income tax is imposed on the earnings of individuals or companies involved in business activities. It is calculated based on your taxable income. 

Some common types of income are employment income, pension income, investment income, and rental income. Even if you’re self-employed on your full-time business, you still have to pay for personal income tax.

If you’re selling on Amazon and other ecommerce platforms or creating paid content on YouTube, you’ll receive an income statement from these channels. You can use it for reporting within your tax return. 

  1. Sales Tax

The sales tax in Canada varies depending on the province or territory in which you reside. There are three types of sales taxes: the GST, HST, and Provincial Sales Tax (PST). 

The GST is a federal tax, while the PST and HST are levied by the provinces. If you’re registered for GST, you must charge GST on all taxable goods and services made in Canada. The tax rates also differ across provinces.  

As a small business owner, income and sales taxes are most likely to be the taxes you’ll pay and charge. Here are the differences between the two: 

a graphic showing the key differences between sales tax and income tax
  1. Corporate Income Tax

Once your ecommerce business is registered as a corporation, you must pay corporate income tax on the taxable income it generates. The federal corporate income tax rate stands at 15%. Corporate income tax rates vary depending on the area of jurisdiction and the size of your business. 

  1. Payroll Tax

If you’re an ecommerce business owner with employees, you must withhold payroll taxes from your employees’ paychecks and remit them to the CRA. Payroll taxes include income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. 

The income tax deductions depend on the employee’s income and personal exemptions declared on their TD1 form. 

Every Tax Tip for a Complete and Accurate Return

Filing your taxes can be painless if you take the time to stay organized throughout the year and know what to expect come tax season. Learn how to take the edge off when these tax deadlines are fast approaching. 

  1. Practice Good Record Keeping

Proper bookkeeping is essential to ensure a complete and accurate tax return. Keep track of all your income slips and receipts for deductible expenses throughout the year. This will help you stay organized and avoid costly tax filing mistakes. 

  1. Pay Taxes and Get Your Refund

The easiest way to file is to do it electronically. The income tax e-filing deadline will be less of a headache if you can pay using accounting or tax software. This typically results in a refund being issued in less than a month. Direct deposit is simple and effective. Plus, it’s more secure than sending a paper check.

  1. Amend Your Tax Form

What if you realized you added too many zeroes to your income tax return after filing it? Don’t panic - this is surprisingly common among many new and veteran business owners. 

First, gather relevant information or documents to help you correct the mistake. Then, submit a completed Form T1 Adjustment Request and other supporting documents. 

If the error resulted in paying more taxes, you must be prepared to pay the interest or penalties needed. On the other hand, if the mistake decreases your tax bill, the CRA can refund the amount. 

  1. Work With an Expert Accountant

If you are unsure about certain aspects of your tax return or require expert advice, it’s best to consult a tax professional. An accountant can help you with complex tax situations, navigate Canada’s unique tax regulations, and assist in finding deductions to maximize your return. Working with a professional will help save you time, stress, and even money in the long run.

File Your Tax Return With Unloop

That’s it for our tax tips for small online businesses! Tax filing might be overwhelming, especially if you’re still growing your ecommerce business. We also hope we have helped you better understand the Canadian income tax system more.

If you prefer someone else to handle your taxes, Unloop is here to help. With Unloop, you can easily and quickly file your taxes anytime, anywhere. There’s also no need to worry about making mistakes—our expert team will review your return and ensure everything is correct before filing. 

We’ll also help you maximize your refund to get the most out of your hard-earning profits. So why wait? 

Book a call with us, and we’ll help you in filing your tax returns!

Income Tax in Canada: An Essential Guide for Your Ecommerce Business
Watch Now

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

No matter how small your ecommerce business is, you still have a tax liability. If you live in Canada and sell a few items online, you must still pay taxes on your earnings. There are several different types of taxes that you may be responsible for, but let’s explore the essentials of filing income tax in Canada. 

This blog post will break everything down about filing your income taxes. Keep reading to learn more! 

Income Tax Basics in Canada 

Running an ecommerce business in Canada involves understanding and navigating the Canadian income tax system. It’s also important to note that the same tax laws apply whether you’re operating a brick-and-mortar or web-based business. 

So, as a business owner, you are responsible for calculating and reporting your income and paying the required taxes to the Canada Revenue Agency (CRA).

Here are some of the basics of filing income taxes in Canada: 

  1. Determine Your Business Structure

How you’re taxed and the forms you must fill out during tax time depends on your business structure. Since you’re managing an ecommerce business, it falls into one of these business structures: 

  • Sole proprietorship. An individual owns and operates the business. 
  • Partnership. Two or more individuals operate and share ownership of the business. 
  • Incorporation. The company is considered a separate legal entity from its owners. 

Sole proprietorships and partnerships report their income on a personal tax return, while corporations file a separate corporate tax return. In some cases, a Canadian-controlled private corporation (CCPC) may be eligible for a reduced tax rate of 9%.

  1. Consider Territorial Rates

When calculating income tax, consider both federal and provincial or territorial rates. The federal income tax brackets for individuals range from 15% to 33%, whereas corporations pay a net tax rate of 15% with a basic rate of 38%, reduced to 28% after federal tax abatement. 

Rates of territorial or provincial income taxes vary depending on your location. So, aside from your business structure, these rates also apply when paying your taxes. 

  1. Charging Sales Tax

For ecommerce businesses, it’s essential to charge sales tax on sales made to Canadian customers. If your annual revenue exceeds $30,000, you must charge the appropriate sales tax based on the destination province. 

This involves registering for the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) and remitting the collected taxes to the CRA.

  1. Tax Deductions

In Canada, you can reduce your taxable income through tax deductions and credits. For small business owners like you, tax deductions can bump you into a lower tax bracket, reducing the amount of taxes you pay for the year. 

All expenses incurred while operating your business are categorized as business expenses, and you can claim them as deductions on your tax return. For example, if you’re renting a warehouse to store your inventory, the utility costs you incur are a business deduction.

  1. Tax Refunds

When filing your income tax, you may calculate the taxes owed or any refunds you may be entitled to. If you cannot make the full payment immediately, you can arrange a payment plan with the CRA. 

On the other hand, if you overpaid your taxes, you may be eligible for a tax refund. Tax refunds could result from the CRA collecting more income tax than what was rightfully due, and they will refund the overpayment. 

Types of Taxes You Need to Pay

Businesses have to pay taxes like individual taxpayers based on their profit. Here are the types of taxes that may apply to your business: 

  1. Income Tax

Income tax is imposed on the earnings of individuals or companies involved in business activities. It is calculated based on your taxable income. 

Some common types of income are employment income, pension income, investment income, and rental income. Even if you’re self-employed on your full-time business, you still have to pay for personal income tax.

If you’re selling on Amazon and other ecommerce platforms or creating paid content on YouTube, you’ll receive an income statement from these channels. You can use it for reporting within your tax return. 

  1. Sales Tax

The sales tax in Canada varies depending on the province or territory in which you reside. There are three types of sales taxes: the GST, HST, and Provincial Sales Tax (PST). 

The GST is a federal tax, while the PST and HST are levied by the provinces. If you’re registered for GST, you must charge GST on all taxable goods and services made in Canada. The tax rates also differ across provinces.  

As a small business owner, income and sales taxes are most likely to be the taxes you’ll pay and charge. Here are the differences between the two: 

a graphic showing the key differences between sales tax and income tax
  1. Corporate Income Tax

Once your ecommerce business is registered as a corporation, you must pay corporate income tax on the taxable income it generates. The federal corporate income tax rate stands at 15%. Corporate income tax rates vary depending on the area of jurisdiction and the size of your business. 

  1. Payroll Tax

If you’re an ecommerce business owner with employees, you must withhold payroll taxes from your employees’ paychecks and remit them to the CRA. Payroll taxes include income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. 

The income tax deductions depend on the employee’s income and personal exemptions declared on their TD1 form. 

Every Tax Tip for a Complete and Accurate Return

Filing your taxes can be painless if you take the time to stay organized throughout the year and know what to expect come tax season. Learn how to take the edge off when these tax deadlines are fast approaching. 

  1. Practice Good Record Keeping

Proper bookkeeping is essential to ensure a complete and accurate tax return. Keep track of all your income slips and receipts for deductible expenses throughout the year. This will help you stay organized and avoid costly tax filing mistakes. 

  1. Pay Taxes and Get Your Refund

The easiest way to file is to do it electronically. The income tax e-filing deadline will be less of a headache if you can pay using accounting or tax software. This typically results in a refund being issued in less than a month. Direct deposit is simple and effective. Plus, it’s more secure than sending a paper check.

  1. Amend Your Tax Form

What if you realized you added too many zeroes to your income tax return after filing it? Don’t panic - this is surprisingly common among many new and veteran business owners. 

First, gather relevant information or documents to help you correct the mistake. Then, submit a completed Form T1 Adjustment Request and other supporting documents. 

If the error resulted in paying more taxes, you must be prepared to pay the interest or penalties needed. On the other hand, if the mistake decreases your tax bill, the CRA can refund the amount. 

  1. Work With an Expert Accountant

If you are unsure about certain aspects of your tax return or require expert advice, it’s best to consult a tax professional. An accountant can help you with complex tax situations, navigate Canada’s unique tax regulations, and assist in finding deductions to maximize your return. Working with a professional will help save you time, stress, and even money in the long run.

File Your Tax Return With Unloop

That’s it for our tax tips for small online businesses! Tax filing might be overwhelming, especially if you’re still growing your ecommerce business. We also hope we have helped you better understand the Canadian income tax system more.

If you prefer someone else to handle your taxes, Unloop is here to help. With Unloop, you can easily and quickly file your taxes anytime, anywhere. There’s also no need to worry about making mistakes—our expert team will review your return and ensure everything is correct before filing. 

We’ll also help you maximize your refund to get the most out of your hard-earning profits. So why wait? 

Book a call with us, and we’ll help you in filing your tax returns!

Read more

Like any other area of accounting, managing payroll should mean little to no errors. But depending on several factors, such as the number of employees your business has and tax laws, it's no surprise that it’s difficult. With all the other demands on your time, you may wonder if paying for premium payroll software is worth it. 

In this blog post, we'll look at whether the full services of QuickBooks' top-tier payroll solutions are right for your business. We'll review some of this software's key features and benefits and offer some alternatives to keep your salaried employees happy. Keep reading to learn more!

Pay Your Team Through QuickBooks Software with Payroll

Small and big business owners appreciate the revolutionized cloud-based accounting service that QuickBooks Online provides to millions of ecommerce businesses. But auto-payroll and payroll tax filings takes this accounting software to another level, offering solutions like:

  • Automated payroll management and tax deductions
  • Health benefits for most states
  • 401(k) plans
  • Financial reports for paid time off, tax payments and filings, bank transactions, etc
  • 24/7 customer support

But like its accounting features, QuickBooks offers different subscription plans for various stages of your business.

QuickBooks Payroll Core

If you have a micro business online with less than ten employees, you can start with QuickBooks’s lowest-tier payroll plan. 

With this plan, you can submit payroll with minimum effort for just $45 a month. But, take note that there are additional fees per employee. It's basic payroll services without any extra bells and whistles. You can pay your staff thanks to its simple features:

  • Next-day direct deposit
  • Tax filings for federal and state payroll taxes
  • $5 additional cost for workers’ comp insurance

QuickBooks Payroll Premium

Many small businesses opt for QuickBooks's second payroll tier plan since it offers a basic payroll system with additional benefits. With just $75 per month, your small business payroll software will be able to handle teams with more than fifty employees. These are some of its features:

  • Same-day direct deposit
  • AP Intego for workers comp administration
  • Mineral Inc. for HR support
  • QuickBooks time tracking
  • Support resources for setup

QuickBooks Payroll Elite

Scalable online businesses with employees over multiple states need a powerful QuickBooks Online payroll system to handle full-service payroll and automated taxes and forms, from local taxes to health benefits. With its expert setup and a personal HR advisor, you can be sure that you can pay employees fast and easily. Get these, and more:

  • Same-day direct deposit
  • Project tracking for contractor payments
  • Covers tax charges for tax filing errors

QuickBooks Online Payroll Elite Plan in Detail

For small business owners who love QuickBooks Online, it's a no-brainer to subscribe to its highest service options. At $125 a month, you'll experience complete HR management that will file taxes, handle project-based employees and, most importantly, pay stubs and employees on time. But what entices ecommerce businesses to go for this plan are these four specific highlights.

Dedicated HR Support Center

With or without a dedicated HR team for your business, QuickBooks payroll Elite can help you create documents like an employee handbook or job offer letters, thanks to its own HR department. This can be incredibly helpful in ensuring that your employees are properly onboarded and that your HR needs are taken care of. 

Their HR team can help you create a smooth payroll system. This, in turn, can cut costs and save you time. Finally, QuickBooks gives you backend support, with someone always available to help with any HR issues.

Time-Tracking Capability

Online businesses often have employees in remote areas with different time zones and contracts. So normally, they opt for a time tracker like Hubstaff to track their worker's PTO, clock ins and outs, and more. However, QuickBooks payroll doesn’t skip this feature and designed a time tracker, also available through a mobile app.

Instead of downloading a third-party app, you can seamlessly use QuickBooks Time as your employee's digital timesheet. It has geofencing, smart alerts, and reports. This gives you real-time payroll data and avoids any double-entry or missing hours.

Expert Setup

As a business owner, you're responsible for many things, but setting up your QuickBooks shouldn't be one of them. Fortunately, you can spare the headaches of transferring your payroll data to QuickBooks since QuickBooks experts will do it for you.

Tax Penalty Protection

Asides from business taxes, you also need to handle payroll tax for every employee. So it's no surprise that it’s easy to make mistakes in tax filings. QuickBooks Elite can protect you from tax penalties for up to $25,000. Tax penalty protection offers a legal team to resolve any tax filing issues you have.

Alternatives to QuickBooks Payroll

QuickBooks Online's top-tier plan for payroll software is perfect for any online business, big or small. Unfortunately, its pricing and additional cost per employee is a big turn-off for small business owners. You can use these well-established payroll software compatible with QuickBooks if you need more affordable automated tax payments and payroll services.

Gusto

Designed to be user-friendly with a simple interface, Gusto also offers a variety of features that you can customize to meet the needs of your small business. Unlike QuickBooks payroll, this full-service payroll can handle garnishment deductions. The software is affordable, with a monthly subscription that scales to fit your business's needs.

Paychex

Paychex offers integrated solutions, including basic payroll processing, time tracking, and health benefits administration. In addition, Paychex provides PEO (professional employer organization) services that can help businesses with complex HR needs to improve employee productivity and reduce costs.

Rippling

Rippling is another comprehensive and efficient HR, payroll, and IT management platform that provides modular tools you can integrate into your working environment. Once you have set up the online payroll software, you can add as many as 500 business apps as needed to support your specific workforce needs. 

This payroll software offers international payroll solutions, so you can be sure you can pay anyone outside the US. Overall, this payroll tool option is an excellent choice for companies looking for a comprehensive and customizable HR solution.

TimeTrex

You might consider this payroll software if you're on a tight budget with your online business. It features needed payroll features such as:

  • Employee self-service
  • Time and attendance tracking
  • Job costing
  • Advanced reporting.

And it integrates with popular payroll services like QuickBooks Online, ADP, and Paychex. Best of all, it's free for businesses with up to 50 employees. So if you're looking for a payroll service that won't break the bank, TimeTrex is worth checking out.

Worth the Investment with Unloop Accounting Services

So, is QuickBooks payroll software’s Elite plan worth it? The Elite plan offers all the features you need to pay your team and manage your taxes. Plus, you can test its free trial for a month. There are also alternatives to QuickBooks payroll if you're looking for a more affordable option.
But do you know who is capable of filing payroll taxes and providing pay and employee health benefits? Unloop. You don't need to decide whether or not QuickBooks Elite is for you. Unloop can give you the best financial advice and solutions for handling your entire HR. Book a call today to drive your business in the right direction.

Is Elite QuickBooks Payroll Software for Your Small Business Worth It?
Watch Now

Like any other area of accounting, managing payroll should mean little to no errors. But depending on several factors, such as the number of employees your business has and tax laws, it's no surprise that it’s difficult. With all the other demands on your time, you may wonder if paying for premium payroll software is worth it. 

In this blog post, we'll look at whether the full services of QuickBooks' top-tier payroll solutions are right for your business. We'll review some of this software's key features and benefits and offer some alternatives to keep your salaried employees happy. Keep reading to learn more!

Pay Your Team Through QuickBooks Software with Payroll

Small and big business owners appreciate the revolutionized cloud-based accounting service that QuickBooks Online provides to millions of ecommerce businesses. But auto-payroll and payroll tax filings takes this accounting software to another level, offering solutions like:

  • Automated payroll management and tax deductions
  • Health benefits for most states
  • 401(k) plans
  • Financial reports for paid time off, tax payments and filings, bank transactions, etc
  • 24/7 customer support

But like its accounting features, QuickBooks offers different subscription plans for various stages of your business.

QuickBooks Payroll Core

If you have a micro business online with less than ten employees, you can start with QuickBooks’s lowest-tier payroll plan. 

With this plan, you can submit payroll with minimum effort for just $45 a month. But, take note that there are additional fees per employee. It's basic payroll services without any extra bells and whistles. You can pay your staff thanks to its simple features:

  • Next-day direct deposit
  • Tax filings for federal and state payroll taxes
  • $5 additional cost for workers’ comp insurance

QuickBooks Payroll Premium

Many small businesses opt for QuickBooks's second payroll tier plan since it offers a basic payroll system with additional benefits. With just $75 per month, your small business payroll software will be able to handle teams with more than fifty employees. These are some of its features:

  • Same-day direct deposit
  • AP Intego for workers comp administration
  • Mineral Inc. for HR support
  • QuickBooks time tracking
  • Support resources for setup

QuickBooks Payroll Elite

Scalable online businesses with employees over multiple states need a powerful QuickBooks Online payroll system to handle full-service payroll and automated taxes and forms, from local taxes to health benefits. With its expert setup and a personal HR advisor, you can be sure that you can pay employees fast and easily. Get these, and more:

  • Same-day direct deposit
  • Project tracking for contractor payments
  • Covers tax charges for tax filing errors

QuickBooks Online Payroll Elite Plan in Detail

For small business owners who love QuickBooks Online, it's a no-brainer to subscribe to its highest service options. At $125 a month, you'll experience complete HR management that will file taxes, handle project-based employees and, most importantly, pay stubs and employees on time. But what entices ecommerce businesses to go for this plan are these four specific highlights.

Dedicated HR Support Center

With or without a dedicated HR team for your business, QuickBooks payroll Elite can help you create documents like an employee handbook or job offer letters, thanks to its own HR department. This can be incredibly helpful in ensuring that your employees are properly onboarded and that your HR needs are taken care of. 

Their HR team can help you create a smooth payroll system. This, in turn, can cut costs and save you time. Finally, QuickBooks gives you backend support, with someone always available to help with any HR issues.

Time-Tracking Capability

Online businesses often have employees in remote areas with different time zones and contracts. So normally, they opt for a time tracker like Hubstaff to track their worker's PTO, clock ins and outs, and more. However, QuickBooks payroll doesn’t skip this feature and designed a time tracker, also available through a mobile app.

Instead of downloading a third-party app, you can seamlessly use QuickBooks Time as your employee's digital timesheet. It has geofencing, smart alerts, and reports. This gives you real-time payroll data and avoids any double-entry or missing hours.

Expert Setup

As a business owner, you're responsible for many things, but setting up your QuickBooks shouldn't be one of them. Fortunately, you can spare the headaches of transferring your payroll data to QuickBooks since QuickBooks experts will do it for you.

Tax Penalty Protection

Asides from business taxes, you also need to handle payroll tax for every employee. So it's no surprise that it’s easy to make mistakes in tax filings. QuickBooks Elite can protect you from tax penalties for up to $25,000. Tax penalty protection offers a legal team to resolve any tax filing issues you have.

Alternatives to QuickBooks Payroll

QuickBooks Online's top-tier plan for payroll software is perfect for any online business, big or small. Unfortunately, its pricing and additional cost per employee is a big turn-off for small business owners. You can use these well-established payroll software compatible with QuickBooks if you need more affordable automated tax payments and payroll services.

Gusto

Designed to be user-friendly with a simple interface, Gusto also offers a variety of features that you can customize to meet the needs of your small business. Unlike QuickBooks payroll, this full-service payroll can handle garnishment deductions. The software is affordable, with a monthly subscription that scales to fit your business's needs.

Paychex

Paychex offers integrated solutions, including basic payroll processing, time tracking, and health benefits administration. In addition, Paychex provides PEO (professional employer organization) services that can help businesses with complex HR needs to improve employee productivity and reduce costs.

Rippling

Rippling is another comprehensive and efficient HR, payroll, and IT management platform that provides modular tools you can integrate into your working environment. Once you have set up the online payroll software, you can add as many as 500 business apps as needed to support your specific workforce needs. 

This payroll software offers international payroll solutions, so you can be sure you can pay anyone outside the US. Overall, this payroll tool option is an excellent choice for companies looking for a comprehensive and customizable HR solution.

TimeTrex

You might consider this payroll software if you're on a tight budget with your online business. It features needed payroll features such as:

  • Employee self-service
  • Time and attendance tracking
  • Job costing
  • Advanced reporting.

And it integrates with popular payroll services like QuickBooks Online, ADP, and Paychex. Best of all, it's free for businesses with up to 50 employees. So if you're looking for a payroll service that won't break the bank, TimeTrex is worth checking out.

Worth the Investment with Unloop Accounting Services

So, is QuickBooks payroll software’s Elite plan worth it? The Elite plan offers all the features you need to pay your team and manage your taxes. Plus, you can test its free trial for a month. There are also alternatives to QuickBooks payroll if you're looking for a more affordable option.
But do you know who is capable of filing payroll taxes and providing pay and employee health benefits? Unloop. You don't need to decide whether or not QuickBooks Elite is for you. Unloop can give you the best financial advice and solutions for handling your entire HR. Book a call today to drive your business in the right direction.

Read more

"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.

Set Up Your Tax Form in QuickBooks Accounting Software

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).

Benefits of Setting up Your Tax Form in QuickBooks Online

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.

Streamlined

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.

Accurate

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.

Audit-Friendly

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.

QuickBooks tax software - A businessperson in front of his desktop using a calculator

A List of Common QuickBooks Accounts for Sole Proprietorship Transaction Attribution

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 TypeDetail TypeSchedule C Line Item
IncomeSale of productLine 1
IncomeRefunds and discountsLine 2
Other incomeMiscellaneousLine 6
ExpensesAdvertisingLine 8
ExpensesFees and commissionsLine 10
ExpensesCommunicationLine 25
ExpensesLaborLine 11
ExpensesDepreciationLine 13
ExpensesPayrollLine 14
ExpensesOffice / AdminLine 18
ExpensesRentLine 20b
ExpensesRepair and maintenanceLine 21
ExpensesSuppliesLine 22
ExpensesTaxes paidLine 23
ExpensesEmployee payroll taxLine 23
ExpensesUtilityLine 25
ExpensesWageLine 26

Common Questions About Tax Preparation Using QuickBooks Online

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.

Do I have to set up my tax form and map my transaction from the start?

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.

Do I have to determine the income tax I should pay manually?

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.

Can you change the account type and detail type?

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.

QuickBooks tax software - A man sitting in front of a laptop with hands behind his head

How do I know what account and detail types to choose?

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.

Can I import my chart of accounts using a spreadsheet?

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:

  1. Go to Settings
  2. Go to Import Data
  3. Select Chart of Accounts
  4. Attach the spreadsheet in .CSV format which must contain the following headers
    1. Detail Type
    2. Account Name
    3. Account Number
    4. Account Type
  5. Click next
  6. Match the spreadsheet headers to QuickBooks headers
  7. Click next
  8. Double-check the details of the account name, account type, and detail type
  9. Click Import

Is there a way for me to avoid doing this confusing tax stuff?

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.

Convenient Tax Filing With QuickBooks Tax Software and Unloop

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.

QuickBooks Tax Software: Preparing for Tax Time as a Sole Proprietor
Watch Now

"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.

Set Up Your Tax Form in QuickBooks Accounting Software

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).

Benefits of Setting up Your Tax Form in QuickBooks Online

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.

Streamlined

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.

Accurate

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.

Audit-Friendly

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.

QuickBooks tax software - A businessperson in front of his desktop using a calculator

A List of Common QuickBooks Accounts for Sole Proprietorship Transaction Attribution

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 TypeDetail TypeSchedule C Line Item
IncomeSale of productLine 1
IncomeRefunds and discountsLine 2
Other incomeMiscellaneousLine 6
ExpensesAdvertisingLine 8
ExpensesFees and commissionsLine 10
ExpensesCommunicationLine 25
ExpensesLaborLine 11
ExpensesDepreciationLine 13
ExpensesPayrollLine 14
ExpensesOffice / AdminLine 18
ExpensesRentLine 20b
ExpensesRepair and maintenanceLine 21
ExpensesSuppliesLine 22
ExpensesTaxes paidLine 23
ExpensesEmployee payroll taxLine 23
ExpensesUtilityLine 25
ExpensesWageLine 26

Common Questions About Tax Preparation Using QuickBooks Online

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.

Do I have to set up my tax form and map my transaction from the start?

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.

Do I have to determine the income tax I should pay manually?

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.

Can you change the account type and detail type?

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.

QuickBooks tax software - A man sitting in front of a laptop with hands behind his head

How do I know what account and detail types to choose?

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.

Can I import my chart of accounts using a spreadsheet?

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:

  1. Go to Settings
  2. Go to Import Data
  3. Select Chart of Accounts
  4. Attach the spreadsheet in .CSV format which must contain the following headers
    1. Detail Type
    2. Account Name
    3. Account Number
    4. Account Type
  5. Click next
  6. Match the spreadsheet headers to QuickBooks headers
  7. Click next
  8. Double-check the details of the account name, account type, and detail type
  9. Click Import

Is there a way for me to avoid doing this confusing tax stuff?

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.

Convenient Tax Filing With QuickBooks Tax Software and Unloop

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.

Read more

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Bookkeeping is fundamental to any business, including those operating on Amazon. Effective bookkeeping for Amazon sellers is essential to accurately track sales, expenses, and profits, which is especially crucial for small business owners wanting to grow their businesses.

Tracking finances will help you better understand your business's financial health. The net profit predicts whether your business is earning or failing, so you must update your books regularly. Bookkeeping for Amazon also ensures that you are on top of your tax obligations. You can't compute your taxes when your accounts and business transactions are everywhere.

This handy primer provides a comprehensive overview of bookkeeping practices specifically tailored for Amazon sellers. We'll cover key concepts such as the importance of bookkeeping on the eCommerce platform, some terms to know for beginner Amazon sellers, bookkeeping and accounting software, and the assistance you can get from a bookkeeping and accounting firm.

Whether you are a newbie or a seasoned Amazon seller, understanding bookkeeping fundamentals is crucial in maintaining financial health and achieving long-term success on this eCommerce platform. So, keep reading!

Basic Terms in Accounting for Amazon Sellers

Let's begin by knowing the different bookkeeping terms on financial statements, income statements, balance sheets, credit card statements, or even on an Excel spreadsheet. 

Checking Amazon reports and creating customized financial reports will be part of your daily tasks as a business owner. Understanding the basic bookkeeping terms below will allow you to make sense of the numbers and make wise decisions for your eCommerce business.

Cash Accounting and Accrual Accounting

Cash basis accounting is a method wherein the revenue is only recorded when the monetary payment is received. Accrual accounting, on the other hand, records the revenue in the book as soon as the transaction happens, even before the payment is received.

Sales

In business terms, sales are transactions wherein an exchange of goods or services for a specific amount of money or asset has occurred. From the business owner's perspective, it is the number of goods or products the business has successfully sold.

Accounts Receivable

Payment not yet received during the transaction and instead promised later falls under accounts receivable. Recording the transaction ensures that you monitor that the payment is sent on the agreed date and time.

Accounts Payable

Accounts payable refers to the money you owe to other people. Only short-term liabilities or debts not exceeding a year before settling fall under accounts payable. This may include delayed payroll and unpaid raw materials from suppliers.

Loans Payable

When you borrow money through a loan, the transaction will fall under a separate account called Loans Payable. It is not included in the Accounts Payable category, which only caters to short-term debts. These do not cover loans that take more than a year to be paid.

Inventory

If you're an Amazon seller, which is a type of merchandise business, purchasing inventory is a very important aspect. Inventory is the number of products and raw materials you have in store. Being aware of external factors such as the environment and industry can help you decide how many items you should keep or sell to maintain balance in your inventory.

Purchases

Purchases are business-related expenses like office supplies, merchandise, raw materials, etc. If you pay it upfront, it will fall under this account.

a laptop showing a dashboard that has charts and the world map

The Best Bookkeeping Software for Amazon Sellers

The details above may come from an Amazon balance sheet through your Amazon seller account. Still, there are also details you'll acquire from different payment channels like your credit card, bank account, and various debit cards. An Amazon accounting software would significantly help you track all transactions from different gateways. Among the many accounting software options, here are the tools we think are the best:

GoDaddy Online Bookkeeping

GoDaddy is a web hosting company that offers bookkeeping services. This software has all the essential tools every Amazon business needs, from invoices to tracking profit and loss and establishing financial reports. GoDaddy's services are basic yet useful for small Amazon sellers who still don’t need that many bookkeeping and accounting functions.

GoDaddy's forte is to provide easy-to-use and stress-free accounting software. It is directly connected to your Amazon Seller Central account, so you don't need to integrate it. This software can also generate various reports that enable the user to visualize sales, inventory, and other data.

It is also more affordable than other software, but you must note that the tool lacks double-entry accounting.

QuickBooks Online

Quickbooks Online always makes it to the list whenever we talk about the best cloud-based accounting software in the market. Their target market is large Amazon sellers or enterprises eyeing to increase profits. However, it also provides a complete accounting solution for small businesses.

QuickBooks follows the double-entry accounting method, producing highly accurate reports. Their inventory management feature also changes the game with its excellent product tracking. You can even create a master inventory list to ensure everything's included.

When it comes to taxation, QuickBooks automatically computes your sales taxes according to the tax laws of the city you reside in. You can also manually input the custom rate if needed. This makes paying taxes stress-free.

Quickbooks also produces impressively detailed reports and financial statements like profit and loss, cash flow, and sales reports.

AccountEdge Pro

AccountEdge Pro is a mixture of GoDaddy and a bit of QuickBooks with a wide variety of functions to offer to beginner eCommerce sellers. The software is impressive because of its banking, inventory management, and time-tracking features. It is also affordable, which benefits beginner entrepreneurs.

Just like QuickBooks, it uses a double-entry accounting system to ensure the accuracy of accounts. Its banking system is outstanding since it allows almost every bank transaction, like receiving and sending money and making e-payments in the software.

Its inventory management system is also notable since it helps third-party sellers or wholesalers prevent oversupply or undersupply. This matters greatly since Amazon sellers are charged whenever excess stocks stay for over a year.

Kashoo

Kashoo appeals to both beginner and seasoned Amazon sellers because of its simplicity and user-friendly features. It can track expenses, create invoices, and provide updated bank statements.

Its expense tracking feature is very efficient, allowing users to conveniently upload a digital copy of paper receipts and plan their payment schedule monthly or weekly. These features are available on iPhone or iPad. It also allows integrations with third-party banking applications such as PayPal, Stripe, and Square, making bank feed access easier.

Fetcher

Like Kashoo, Fetcher targets small to medium-sized businesses. It offers new sellers a good set of features but comes at a reasonable price.

Fetcher’s way of analyzing profit and loss is unique. It already deducts sales and all other expenses from the total revenue, leaving the net profit. This process makes data more understandable for users, especially those unfamiliar with accounting terms.

Fetcher also closely monitors all expenses and leaves nothing out of the list: sales tax, shipping costs, cost of inventory, subscription costs, and even Amazon FBA fees. Everything's recorded to ensure that no charges remain hidden. It also provides reports for better visualization of figures.

However, if you choose Fetcher, note that it lacks an inventory management feature and double-entry accounting.

financial data you can organize easily with an accounting agency

Partnering with an Amazon Bookkeeping Agency

Instead of relying on your own Amazon bookkeeping, it would be more efficient to delegate the complex task to experts. An online bookkeeping and accounting service team will apply their knowledge and skills and utilize Amazon bookkeeping software to organize your financial data. 

A bookkeeping firm's assistance will streamline your accounting process, allowing you to have accurate data on the following:

Your Amazon Sales

The first detail you will see and be interested in is your sales. You’ll see a per-item breakdown in the books, which determines your bestsellers and low-performing products.

Aside from the in-depth view, you can also see a dashboard of sales summaries. An Amazon seller bookkeeping firm can run weekly or monthly financial reports for you. You can also get daily updates with the right accounting software.

Amazon Shipping and Fulfillment Fees

When selling on Amazon, you must 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 your orders 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 is more efficient. Some sellers find FBM helpful initially, especially with only a few orders. On the other hand, Amazon FBA sellers with rapidly growing numbers find fulfillment assistance extremely helpful as they expand their businesses. 

Amazon Pay-Per-Click Costs

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 is meant to boost brand awareness on the Amazon platform.
  • Sponsored Display: Advertisement that appears in and out of the Amazon platform.
  • Amazon Stores: An ad link 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. You'll know which ad type gets the most impressions, clicks, and sales, helping you decide which campaign to focus on to save costs and maintain high sales. 

Marketing Costs Outside Amazon

Social media advertising is one of the most effective methods today, as everyone is on Facebook, Instagram, Twitter, or LinkedIn. Vlogs and videos are also booming, so partnering with vloggers is another efficient way to make your products and brand known.

What’s good about tracking all your advertising and marketing expenses is seeing the costs and return on investment in real-time. You’ll know which campaigns are effective and you should invest more in and which ones need to be cut or revised for better performance. 

Up-To-Date Inventory

When you begin selling on Amazon, you must always keep an eye on what products are in stock and which ones are for replenishing. Amazon has your back when it comes to inventory management. You have a view of the monetary value of the goods sold and stocks you are about to purchase, giving you insights into which products sell faster. 

You can make the most of this feature by having a proper accounting system from your partner accounting and bookkeeping firm. They can integrate Amazon analytics into their accounting software, so you’ll have a single place to see all data on your Amazon business.

a warehouse filled with boxes

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 are 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 factory to warehouse or Amazon fulfillment center.

Whatever you classify your production as, you can monitor your COGS efficiently when your books are organized. You’ll see the breakdown of raw material costs, labor fees, and shipping fees incurred.

Amazon FBA Service Fees

FBA has a lot of benefits. You won’t have to worry about renting a warehouse to store your products, as FBA centers have space. You become more credible with an FBA badge on your product listing, strengthening your customers’ trust in your brand because they know that Amazon will handle shipping the products they buy. 

You also won’t need to worry about customer inquiries; Amazon handles this for you. Amazon also 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 must pay when your books are updated. 

Business Operations Expenses

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, maintenance, internet, and utility payments
  • Employee Salary: Monthly gross income of every employee
  • Employee Benefits: Insurance, training and development, travel expenses, sick leaves, and loan
  • Donations: The money you give to charity
  • Bank Charges/Fees: Although this is mostly 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 see 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.

Sales Taxes

Taxation is never easy, so many businesses rely on a tax professional from outsourced tax services. You’ll be forced to understand sales taxes when you sell on Amazon. 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. 

Bookkeeping for Amazon Sellers by Unloop

Bookkeeping and accounting for Amazon play an essential part in the success of your Amazon store. By keeping up-to-date and accurate records of sales and expenses, you can ensure that your business is on track and making the most profit.

With the help of a good bookkeeping agency, you can build the foundations of a successful Amazon business. And this is where Unloop comes in. 

We offer helpful resources about Amazon bookkeeping and accounting to get you started. We can also help you manage income, expenses, and other bookkeeping matters you are worried about. Stress no more, and get assistance in your bookkeeping and other accounting struggles with the help of professionals in the field. 

Book a call with us today!

Bookkeeping for Amazon Sellers: A Primer
Watch Now

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Bookkeeping is fundamental to any business, including those operating on Amazon. Effective bookkeeping for Amazon sellers is essential to accurately track sales, expenses, and profits, which is especially crucial for small business owners wanting to grow their businesses.

Tracking finances will help you better understand your business's financial health. The net profit predicts whether your business is earning or failing, so you must update your books regularly. Bookkeeping for Amazon also ensures that you are on top of your tax obligations. You can't compute your taxes when your accounts and business transactions are everywhere.

This handy primer provides a comprehensive overview of bookkeeping practices specifically tailored for Amazon sellers. We'll cover key concepts such as the importance of bookkeeping on the eCommerce platform, some terms to know for beginner Amazon sellers, bookkeeping and accounting software, and the assistance you can get from a bookkeeping and accounting firm.

Whether you are a newbie or a seasoned Amazon seller, understanding bookkeeping fundamentals is crucial in maintaining financial health and achieving long-term success on this eCommerce platform. So, keep reading!

Basic Terms in Accounting for Amazon Sellers

Let's begin by knowing the different bookkeeping terms on financial statements, income statements, balance sheets, credit card statements, or even on an Excel spreadsheet. 

Checking Amazon reports and creating customized financial reports will be part of your daily tasks as a business owner. Understanding the basic bookkeeping terms below will allow you to make sense of the numbers and make wise decisions for your eCommerce business.

Cash Accounting and Accrual Accounting

Cash basis accounting is a method wherein the revenue is only recorded when the monetary payment is received. Accrual accounting, on the other hand, records the revenue in the book as soon as the transaction happens, even before the payment is received.

Sales

In business terms, sales are transactions wherein an exchange of goods or services for a specific amount of money or asset has occurred. From the business owner's perspective, it is the number of goods or products the business has successfully sold.

Accounts Receivable

Payment not yet received during the transaction and instead promised later falls under accounts receivable. Recording the transaction ensures that you monitor that the payment is sent on the agreed date and time.

Accounts Payable

Accounts payable refers to the money you owe to other people. Only short-term liabilities or debts not exceeding a year before settling fall under accounts payable. This may include delayed payroll and unpaid raw materials from suppliers.

Loans Payable

When you borrow money through a loan, the transaction will fall under a separate account called Loans Payable. It is not included in the Accounts Payable category, which only caters to short-term debts. These do not cover loans that take more than a year to be paid.

Inventory

If you're an Amazon seller, which is a type of merchandise business, purchasing inventory is a very important aspect. Inventory is the number of products and raw materials you have in store. Being aware of external factors such as the environment and industry can help you decide how many items you should keep or sell to maintain balance in your inventory.

Purchases

Purchases are business-related expenses like office supplies, merchandise, raw materials, etc. If you pay it upfront, it will fall under this account.

a laptop showing a dashboard that has charts and the world map

The Best Bookkeeping Software for Amazon Sellers

The details above may come from an Amazon balance sheet through your Amazon seller account. Still, there are also details you'll acquire from different payment channels like your credit card, bank account, and various debit cards. An Amazon accounting software would significantly help you track all transactions from different gateways. Among the many accounting software options, here are the tools we think are the best:

GoDaddy Online Bookkeeping

GoDaddy is a web hosting company that offers bookkeeping services. This software has all the essential tools every Amazon business needs, from invoices to tracking profit and loss and establishing financial reports. GoDaddy's services are basic yet useful for small Amazon sellers who still don’t need that many bookkeeping and accounting functions.

GoDaddy's forte is to provide easy-to-use and stress-free accounting software. It is directly connected to your Amazon Seller Central account, so you don't need to integrate it. This software can also generate various reports that enable the user to visualize sales, inventory, and other data.

It is also more affordable than other software, but you must note that the tool lacks double-entry accounting.

QuickBooks Online

Quickbooks Online always makes it to the list whenever we talk about the best cloud-based accounting software in the market. Their target market is large Amazon sellers or enterprises eyeing to increase profits. However, it also provides a complete accounting solution for small businesses.

QuickBooks follows the double-entry accounting method, producing highly accurate reports. Their inventory management feature also changes the game with its excellent product tracking. You can even create a master inventory list to ensure everything's included.

When it comes to taxation, QuickBooks automatically computes your sales taxes according to the tax laws of the city you reside in. You can also manually input the custom rate if needed. This makes paying taxes stress-free.

Quickbooks also produces impressively detailed reports and financial statements like profit and loss, cash flow, and sales reports.

AccountEdge Pro

AccountEdge Pro is a mixture of GoDaddy and a bit of QuickBooks with a wide variety of functions to offer to beginner eCommerce sellers. The software is impressive because of its banking, inventory management, and time-tracking features. It is also affordable, which benefits beginner entrepreneurs.

Just like QuickBooks, it uses a double-entry accounting system to ensure the accuracy of accounts. Its banking system is outstanding since it allows almost every bank transaction, like receiving and sending money and making e-payments in the software.

Its inventory management system is also notable since it helps third-party sellers or wholesalers prevent oversupply or undersupply. This matters greatly since Amazon sellers are charged whenever excess stocks stay for over a year.

Kashoo

Kashoo appeals to both beginner and seasoned Amazon sellers because of its simplicity and user-friendly features. It can track expenses, create invoices, and provide updated bank statements.

Its expense tracking feature is very efficient, allowing users to conveniently upload a digital copy of paper receipts and plan their payment schedule monthly or weekly. These features are available on iPhone or iPad. It also allows integrations with third-party banking applications such as PayPal, Stripe, and Square, making bank feed access easier.

Fetcher

Like Kashoo, Fetcher targets small to medium-sized businesses. It offers new sellers a good set of features but comes at a reasonable price.

Fetcher’s way of analyzing profit and loss is unique. It already deducts sales and all other expenses from the total revenue, leaving the net profit. This process makes data more understandable for users, especially those unfamiliar with accounting terms.

Fetcher also closely monitors all expenses and leaves nothing out of the list: sales tax, shipping costs, cost of inventory, subscription costs, and even Amazon FBA fees. Everything's recorded to ensure that no charges remain hidden. It also provides reports for better visualization of figures.

However, if you choose Fetcher, note that it lacks an inventory management feature and double-entry accounting.

financial data you can organize easily with an accounting agency

Partnering with an Amazon Bookkeeping Agency

Instead of relying on your own Amazon bookkeeping, it would be more efficient to delegate the complex task to experts. An online bookkeeping and accounting service team will apply their knowledge and skills and utilize Amazon bookkeeping software to organize your financial data. 

A bookkeeping firm's assistance will streamline your accounting process, allowing you to have accurate data on the following:

Your Amazon Sales

The first detail you will see and be interested in is your sales. You’ll see a per-item breakdown in the books, which determines your bestsellers and low-performing products.

Aside from the in-depth view, you can also see a dashboard of sales summaries. An Amazon seller bookkeeping firm can run weekly or monthly financial reports for you. You can also get daily updates with the right accounting software.

Amazon Shipping and Fulfillment Fees

When selling on Amazon, you must 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 your orders 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 is more efficient. Some sellers find FBM helpful initially, especially with only a few orders. On the other hand, Amazon FBA sellers with rapidly growing numbers find fulfillment assistance extremely helpful as they expand their businesses. 

Amazon Pay-Per-Click Costs

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 is meant to boost brand awareness on the Amazon platform.
  • Sponsored Display: Advertisement that appears in and out of the Amazon platform.
  • Amazon Stores: An ad link 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. You'll know which ad type gets the most impressions, clicks, and sales, helping you decide which campaign to focus on to save costs and maintain high sales. 

Marketing Costs Outside Amazon

Social media advertising is one of the most effective methods today, as everyone is on Facebook, Instagram, Twitter, or LinkedIn. Vlogs and videos are also booming, so partnering with vloggers is another efficient way to make your products and brand known.

What’s good about tracking all your advertising and marketing expenses is seeing the costs and return on investment in real-time. You’ll know which campaigns are effective and you should invest more in and which ones need to be cut or revised for better performance. 

Up-To-Date Inventory

When you begin selling on Amazon, you must always keep an eye on what products are in stock and which ones are for replenishing. Amazon has your back when it comes to inventory management. You have a view of the monetary value of the goods sold and stocks you are about to purchase, giving you insights into which products sell faster. 

You can make the most of this feature by having a proper accounting system from your partner accounting and bookkeeping firm. They can integrate Amazon analytics into their accounting software, so you’ll have a single place to see all data on your Amazon business.

a warehouse filled with boxes

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 are 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 factory to warehouse or Amazon fulfillment center.

Whatever you classify your production as, you can monitor your COGS efficiently when your books are organized. You’ll see the breakdown of raw material costs, labor fees, and shipping fees incurred.

Amazon FBA Service Fees

FBA has a lot of benefits. You won’t have to worry about renting a warehouse to store your products, as FBA centers have space. You become more credible with an FBA badge on your product listing, strengthening your customers’ trust in your brand because they know that Amazon will handle shipping the products they buy. 

You also won’t need to worry about customer inquiries; Amazon handles this for you. Amazon also 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 must pay when your books are updated. 

Business Operations Expenses

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, maintenance, internet, and utility payments
  • Employee Salary: Monthly gross income of every employee
  • Employee Benefits: Insurance, training and development, travel expenses, sick leaves, and loan
  • Donations: The money you give to charity
  • Bank Charges/Fees: Although this is mostly 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 see 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.

Sales Taxes

Taxation is never easy, so many businesses rely on a tax professional from outsourced tax services. You’ll be forced to understand sales taxes when you sell on Amazon. 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. 

Bookkeeping for Amazon Sellers by Unloop

Bookkeeping and accounting for Amazon play an essential part in the success of your Amazon store. By keeping up-to-date and accurate records of sales and expenses, you can ensure that your business is on track and making the most profit.

With the help of a good bookkeeping agency, you can build the foundations of a successful Amazon business. And this is where Unloop comes in. 

We offer helpful resources about Amazon bookkeeping and accounting to get you started. We can also help you manage income, expenses, and other bookkeeping matters you are worried about. Stress no more, and get assistance in your bookkeeping and other accounting struggles with the help of professionals in the field. 

Book a call with us today!

Read more

Staying organized, advanced, and efficient is more important than ever, especially in today’s fast-paced business environment. Large companies and businesses often have the resources to hire an in-house bookkeeper. But how do you redefine modern entrepreneurship if you’re a small business owner? Enter remote bookkeeping services.

Gone are the days when small business owners were limited by budget constraints that hindered their ability to access professional assistance. With online bookkeeping services, you can modernize your business operations and ensure your company’s financial health is always in check. 

Transform the way you run your small business. Read this article now and discover how remote bookkeeping services can empower you to thrive in the digital age.

The Nature of Virtual Bookkeeping Services

Thanks to technology, bookkeeping services are now available virtually.

Virtual bookkeeping agencies specialize in remote bookkeeping services. They work with you by relying on the financial data you send them online. They bring a human touch to the digital world, combining their knowledge with advanced technology to provide accurate, reliable, and efficient online bookkeeping services for small business owners.

There are certain scenarios when outsourcing bookkeeping services makes the most sense for your business:

an infographic highlighting key indicators for outsourcing remote bookkeeping services

Transacting with a virtual bookkeeping business does not mean a computer will do your job. The people working behind an online bookkeeping service are freelance bookkeepers responsible for overseeing your transactions. They are the ones who will explain everything to you. 

Are online bookkeeping services secure? Absolutely! You can communicate with your virtual bookkeeper via email, phone, or video, ensuring a smooth and transparent experience. These people may also provide integrations with other business tools to streamline processes while prioritizing the confidentiality and protection of your financial data.

Like an on-site bookkeeper other companies employ, these skilled individuals can prepare various financial documents for you. These include:

Tasks and Services
Bank ReconciliationKeeping your financial records match your bank statements
InvoicingCreating and sending invoices to your clients
Bill PaymentManaging and paying your business expenses
Financial ReportingProducing monthly financial statements, such as balance sheets and profit and loss reports
Accounts Payable and Accounts ReceivableTracking funds entering and leaving your business
Payroll ManagementMaking sure employees are paid accurately and on time

In addition to these tasks, some bookkeeping companies offer additional features like:

  • Payroll Services
  • Tax Preparation Services
  • CFO Services
  • Catch-up Bookkeeping Services

With reduced errors, compliance support, and valuable business insights, virtual bookkeeping services empower you to make confident decisions and drive your small business forward.

In-House vs. Remote Bookkeeping Services

Modern times and the presence of technology have changed how things work. The choice between in-house and remote bookkeeping services has become more relevant and important for many companies.

We believe that remote bookkeeping is now the name of the game. Apart from its cost-saving advantages, here's why it is gaining prominence.

  • Flexible and Varied Plans: Unlike hiring permanent staff with fixed pay, you can pick plans that match your budget and company needs with virtual bookkeeping companies. 
  • Client-Oriented: Aside from hard skills, agencies equip their people with soft skills. Service providers should double the quality of customer service when the work is remote. All your concerns are always attended to.
  • Well-Versed in Taxes: The advantage of remote bookkeepers is their experience handling many accounts. Their knowledge of sales taxes isn’t only from the books but from experience in handling the sales taxes of their clients from different locations.
  • Everything Done Online: If you decide a virtual bookkeeping service is right for you, signing up is just a few calls and clicks away. Visiting physical offices requires no hassle as all transactions are done online.

Here’s an example of how Unloop’s bookkeeping services help clients online:

a step-by-step guide - how Unloop caters to clients

How Remote Bookkeeping Services Benefit Small Businesses

a businesswoman meeting with her client through online

As you can see, remote bookkeeping services are a game-changer for your small business. But aside from the advantages mentioned above, here’s why we're so confident in recommending them.

Business Size: Whether you’re a solopreneur or a growing company, remote bookkeeping services have your back. They're designed to cater to the needs of businesses like yours, ensuring your financial records are impeccably managed.

Business Entity: Remote bookkeeping services are perfectly aligned for small enterprises that operate as ecommerce businesses. They can provide the advanced tools and knowledge to handle financial operations effectively.

Flexibility and Scalability: A dedicated bookkeeper from accounting services will keep your financial activities sleek and polished, no matter how much your business expands.

Comfort with Technology: Remote bookkeeping relies on accounting software and other digital tools. Small business owners who aspire to innovate their performances are keen on adopting and using these tools.

Data Privacy and Security: The financial industry is no exception to data breaches, as sensitive information such as account numbers and financial records are often stored electronically. With remote bookkeeping, you can ensure that their data is properly protected. 

Training and Resources: Hiring a remote bookkeeping service provider can free up training resources better spent on hiring key personnel to grow and maintain your business, especially in today’s job environment and economy.

Less Mistake: Money is the lifeblood of any business. But keeping track of your income and expenses can be a full-time job and may rob you of other vital activities. A good bookkeeper will help you comply with tax laws and avoid costly mistakes that could jeopardize your business. 

Bookkeeping Made Smarter With Bookkeeping Software

In the modern era of bookkeeping, embracing the right tools and solutions is essential for smarter financial management. Cloud-based accounting software, in particular, is built to have less room for errors. With its integration feature, you can record financial transactions automatically.

For remote bookkeepers, selecting the right bookkeeping software is a breeze as long as it caters to your preferences. But aside from suitability, more common factors are used to evaluate a software's overall effectiveness. 

an infographic presenting a checklist of factors to consider when selecting bookkeeping software

With the right software in place, bookkeepers can simplify the business process, allowing you to help focus on what matters most—meeting the digital demands of today's business landscape.

Here are a few top contenders:

1. QuickBooks Online

QuickBooks Online is one of the most reputable bookkeeping software. Renowned for its reliability and versatility, this software is scalable to the needs of your business. With an industry-specific solution, QuickBooks Online can seamlessly adapt to various business types—wholesale, nonprofit, contractual, retail, or others.

QuickBooks Online proves to be an invaluable asset to remote bookkeepers. The software manages data transfer and enhances communication between bookkeepers and their clients. It simplifies collaboration, allowing them to generate financial reports and give real-time insights to their clients.

2. Xero

The key selling point of Xero is its ability to integrate over 1,000 apps, making it convenient and accessible for monitoring finances anywhere. This software is perfect for small businesses due to its affordable price and collaborative features available at a low price point.

Xero matches the transactions you enter on the application and your bank transactions. However, it’s still essential to cross-check and confirm the matches to maintain accuracy and control over your financial transactions.

Inventory management presents a unique challenge for small business owners, but Xero rises. It offers comprehensive inventory management capabilities across all plans with no additional costs. You can track your stock levels, manage orders, and stay on top of your inventory from the comfort of your home.

3. Zoho Books

From sending invoices and tracking your bills and expenses to securing organized and categorized reports for your business, Zoho Books can ease your accounting workload. It offers excellent customer service support and a beginner-friendly interface, making it attractive for small business owners on a budget.

Managing taxes can be a daunting task. But with Zoho Books, you can confidently handle tax filing and ensure accurate tax preparation, saving you time and stress during tax season.

4. Fathom

Fathom is an accounting software offering multiple features such as different analyses, financial statements, performance metrics, etc. All of its features are available in all its packages.

Fathom is unique because it allows unlimited users to collaborate and use its features, even with the lowest subscription fee. Their pricing depends on the number of companies you would like to include. They also offer custom plans upon request.

It allows clients to see how changes and movements in their finances will affect each other with the "What If" scenario analysis. This is especially useful for small business owners who want to forecast with little knowledge of finance.

Frequently Asked Questions About Outsourcing Bookkeeping

Do you have any inquiries about remote bookkeeping services? Don't worry; we have the answers you need!

How much does it cost to outsource bookkeeping?

The cost of outsourcing bookkeeping will differ depending on the size of your organization and the specific services you need. Although bookkeeping service providers charge much less than in-house bookkeepers, not all companies offer the same rates.

How do I find a reputable outsourced bookkeeping service?

There are several ways to outsource a reputable bookkeeper, including asking for recommendations from other business owners, searching online directories, or contacting professional associations. Once you've found a few potential service providers, check references and get quotes before making your final decision.

Can I outsource just a portion of my bookkeeping?

Yes, you can typically choose to outsource only certain aspects of your bookkeeping, such as preparing financial statements or tracking payables. This is ideal if you want to maintain some control over your finances but don't have the time, skills, or resources to do everything yourself.

Unloop Offers the Best Online Bookkeeping Services

Embracing the presence of remote bookkeeping services signifies a transformative opportunity for your small business. You can modernize your operations, optimize efficiency with powerful bookkeeping tools, and shift your focus toward growth and profitability. After all, who wouldn't want to stand out in this competitive landscape?

At Unloop, your business finances are in good hands. Even if you’re a small-scale business, we can provide expert remote bookkeeping services that rival larger enterprises. 

Our services include:

📌 Bookkeeping Tasks
📌 Advisory Services
📌 Tax Advice
📌 Sales Tax Services
📌 Financial Statements
📌 Forecasting
📌 Accounts Payable
📌 And More!

Achieve sound financial planning with the help of our qualified remote bookkeepers. Book a call now!

Remote Bookkeeping Services: A Smart Choice for Modern Small Businesses
Watch Now

Staying organized, advanced, and efficient is more important than ever, especially in today’s fast-paced business environment. Large companies and businesses often have the resources to hire an in-house bookkeeper. But how do you redefine modern entrepreneurship if you’re a small business owner? Enter remote bookkeeping services.

Gone are the days when small business owners were limited by budget constraints that hindered their ability to access professional assistance. With online bookkeeping services, you can modernize your business operations and ensure your company’s financial health is always in check. 

Transform the way you run your small business. Read this article now and discover how remote bookkeeping services can empower you to thrive in the digital age.

The Nature of Virtual Bookkeeping Services

Thanks to technology, bookkeeping services are now available virtually.

Virtual bookkeeping agencies specialize in remote bookkeeping services. They work with you by relying on the financial data you send them online. They bring a human touch to the digital world, combining their knowledge with advanced technology to provide accurate, reliable, and efficient online bookkeeping services for small business owners.

There are certain scenarios when outsourcing bookkeeping services makes the most sense for your business:

an infographic highlighting key indicators for outsourcing remote bookkeeping services

Transacting with a virtual bookkeeping business does not mean a computer will do your job. The people working behind an online bookkeeping service are freelance bookkeepers responsible for overseeing your transactions. They are the ones who will explain everything to you. 

Are online bookkeeping services secure? Absolutely! You can communicate with your virtual bookkeeper via email, phone, or video, ensuring a smooth and transparent experience. These people may also provide integrations with other business tools to streamline processes while prioritizing the confidentiality and protection of your financial data.

Like an on-site bookkeeper other companies employ, these skilled individuals can prepare various financial documents for you. These include:

Tasks and Services
Bank ReconciliationKeeping your financial records match your bank statements
InvoicingCreating and sending invoices to your clients
Bill PaymentManaging and paying your business expenses
Financial ReportingProducing monthly financial statements, such as balance sheets and profit and loss reports
Accounts Payable and Accounts ReceivableTracking funds entering and leaving your business
Payroll ManagementMaking sure employees are paid accurately and on time

In addition to these tasks, some bookkeeping companies offer additional features like:

  • Payroll Services
  • Tax Preparation Services
  • CFO Services
  • Catch-up Bookkeeping Services

With reduced errors, compliance support, and valuable business insights, virtual bookkeeping services empower you to make confident decisions and drive your small business forward.

In-House vs. Remote Bookkeeping Services

Modern times and the presence of technology have changed how things work. The choice between in-house and remote bookkeeping services has become more relevant and important for many companies.

We believe that remote bookkeeping is now the name of the game. Apart from its cost-saving advantages, here's why it is gaining prominence.

  • Flexible and Varied Plans: Unlike hiring permanent staff with fixed pay, you can pick plans that match your budget and company needs with virtual bookkeeping companies. 
  • Client-Oriented: Aside from hard skills, agencies equip their people with soft skills. Service providers should double the quality of customer service when the work is remote. All your concerns are always attended to.
  • Well-Versed in Taxes: The advantage of remote bookkeepers is their experience handling many accounts. Their knowledge of sales taxes isn’t only from the books but from experience in handling the sales taxes of their clients from different locations.
  • Everything Done Online: If you decide a virtual bookkeeping service is right for you, signing up is just a few calls and clicks away. Visiting physical offices requires no hassle as all transactions are done online.

Here’s an example of how Unloop’s bookkeeping services help clients online:

a step-by-step guide - how Unloop caters to clients

How Remote Bookkeeping Services Benefit Small Businesses

a businesswoman meeting with her client through online

As you can see, remote bookkeeping services are a game-changer for your small business. But aside from the advantages mentioned above, here’s why we're so confident in recommending them.

Business Size: Whether you’re a solopreneur or a growing company, remote bookkeeping services have your back. They're designed to cater to the needs of businesses like yours, ensuring your financial records are impeccably managed.

Business Entity: Remote bookkeeping services are perfectly aligned for small enterprises that operate as ecommerce businesses. They can provide the advanced tools and knowledge to handle financial operations effectively.

Flexibility and Scalability: A dedicated bookkeeper from accounting services will keep your financial activities sleek and polished, no matter how much your business expands.

Comfort with Technology: Remote bookkeeping relies on accounting software and other digital tools. Small business owners who aspire to innovate their performances are keen on adopting and using these tools.

Data Privacy and Security: The financial industry is no exception to data breaches, as sensitive information such as account numbers and financial records are often stored electronically. With remote bookkeeping, you can ensure that their data is properly protected. 

Training and Resources: Hiring a remote bookkeeping service provider can free up training resources better spent on hiring key personnel to grow and maintain your business, especially in today’s job environment and economy.

Less Mistake: Money is the lifeblood of any business. But keeping track of your income and expenses can be a full-time job and may rob you of other vital activities. A good bookkeeper will help you comply with tax laws and avoid costly mistakes that could jeopardize your business. 

Bookkeeping Made Smarter With Bookkeeping Software

In the modern era of bookkeeping, embracing the right tools and solutions is essential for smarter financial management. Cloud-based accounting software, in particular, is built to have less room for errors. With its integration feature, you can record financial transactions automatically.

For remote bookkeepers, selecting the right bookkeeping software is a breeze as long as it caters to your preferences. But aside from suitability, more common factors are used to evaluate a software's overall effectiveness. 

an infographic presenting a checklist of factors to consider when selecting bookkeeping software

With the right software in place, bookkeepers can simplify the business process, allowing you to help focus on what matters most—meeting the digital demands of today's business landscape.

Here are a few top contenders:

1. QuickBooks Online

QuickBooks Online is one of the most reputable bookkeeping software. Renowned for its reliability and versatility, this software is scalable to the needs of your business. With an industry-specific solution, QuickBooks Online can seamlessly adapt to various business types—wholesale, nonprofit, contractual, retail, or others.

QuickBooks Online proves to be an invaluable asset to remote bookkeepers. The software manages data transfer and enhances communication between bookkeepers and their clients. It simplifies collaboration, allowing them to generate financial reports and give real-time insights to their clients.

2. Xero

The key selling point of Xero is its ability to integrate over 1,000 apps, making it convenient and accessible for monitoring finances anywhere. This software is perfect for small businesses due to its affordable price and collaborative features available at a low price point.

Xero matches the transactions you enter on the application and your bank transactions. However, it’s still essential to cross-check and confirm the matches to maintain accuracy and control over your financial transactions.

Inventory management presents a unique challenge for small business owners, but Xero rises. It offers comprehensive inventory management capabilities across all plans with no additional costs. You can track your stock levels, manage orders, and stay on top of your inventory from the comfort of your home.

3. Zoho Books

From sending invoices and tracking your bills and expenses to securing organized and categorized reports for your business, Zoho Books can ease your accounting workload. It offers excellent customer service support and a beginner-friendly interface, making it attractive for small business owners on a budget.

Managing taxes can be a daunting task. But with Zoho Books, you can confidently handle tax filing and ensure accurate tax preparation, saving you time and stress during tax season.

4. Fathom

Fathom is an accounting software offering multiple features such as different analyses, financial statements, performance metrics, etc. All of its features are available in all its packages.

Fathom is unique because it allows unlimited users to collaborate and use its features, even with the lowest subscription fee. Their pricing depends on the number of companies you would like to include. They also offer custom plans upon request.

It allows clients to see how changes and movements in their finances will affect each other with the "What If" scenario analysis. This is especially useful for small business owners who want to forecast with little knowledge of finance.

Frequently Asked Questions About Outsourcing Bookkeeping

Do you have any inquiries about remote bookkeeping services? Don't worry; we have the answers you need!

How much does it cost to outsource bookkeeping?

The cost of outsourcing bookkeeping will differ depending on the size of your organization and the specific services you need. Although bookkeeping service providers charge much less than in-house bookkeepers, not all companies offer the same rates.

How do I find a reputable outsourced bookkeeping service?

There are several ways to outsource a reputable bookkeeper, including asking for recommendations from other business owners, searching online directories, or contacting professional associations. Once you've found a few potential service providers, check references and get quotes before making your final decision.

Can I outsource just a portion of my bookkeeping?

Yes, you can typically choose to outsource only certain aspects of your bookkeeping, such as preparing financial statements or tracking payables. This is ideal if you want to maintain some control over your finances but don't have the time, skills, or resources to do everything yourself.

Unloop Offers the Best Online Bookkeeping Services

Embracing the presence of remote bookkeeping services signifies a transformative opportunity for your small business. You can modernize your operations, optimize efficiency with powerful bookkeeping tools, and shift your focus toward growth and profitability. After all, who wouldn't want to stand out in this competitive landscape?

At Unloop, your business finances are in good hands. Even if you’re a small-scale business, we can provide expert remote bookkeeping services that rival larger enterprises. 

Our services include:

📌 Bookkeeping Tasks
📌 Advisory Services
📌 Tax Advice
📌 Sales Tax Services
📌 Financial Statements
📌 Forecasting
📌 Accounts Payable
📌 And More!

Achieve sound financial planning with the help of our qualified remote bookkeepers. Book a call now!

Read more

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Are you ready to enter the ecommerce world? It's a huge step considering that most shoppers today rely heavily on technology. Meanwhile, for sellers, it's an opportunity to expand the customer base internationally. But, we must address a common challenge among online sellers: ecommerce sales tax. 

With ecommerce, distance won't hinder a business from selling to another state or country. That's an incredible advantage of technology, but it’s also not without challenges. As a first-time ecommerce seller, you might ask yourself: "Do remote businesses need to pay sales tax?" Yes, they do.

Tax collection and remittance are now part of the requirements in ecommerce. Everyone in the industry knows the struggle, and no one expects you to digest everything in a day or two. But we’re here to help.

This article breaks down the fundamentals of sales tax in the USA. Know the basics and read some valuable tips on managing tax compliance. 

Here are some of the points we will be covering:

  • How Ecommerce Sales Tax Started
  • How Remote Sellers Are Affected by Sales Tax Policies
  • The Basics of Sales Tax in Ecommerce
  • 5 Steps to Tax Compliance
  • Hiring a Bookkeeping and Accounting Team
  • Technology and Sales Tax Management
  • Sales Tax For Ecommerce Sellers: Tax Solutions With Unloop

How Ecommerce Sales Tax Started

If your business has a physical storefront, office, or warehouse in a certain state, you must pay and remit sales tax. That was the golden rule until the South Dakota v. Wayfair, Inc. happened in 2018, which states that online businesses must collect sales tax regardless of physical presence. 

In addition, states can redefine the "sales tax nexus" from a broader perspective so that ecommerce retailers become a part of the scope. Economic nexus or tax nexus happens when a seller has to collect tax in certain states where they exceed the revenue threshold.

ecommerce sales tax thresholds data

How Remote Sellers Are Affected by Sales Tax Policies

The development of ecommerce sales tax laws makes the system immensely complicated—one of the most challenging aspects of ecommerce tax in compliance with constantly changing state policies. 

Ecommerce sales tax differs by state, and businesses must learn and comply with all that. It's not easy, and it gets more complicated internationally. Each country has a different tax law, which you must also consider. 

Because of the ever-changing tax policies, businesses are pushed to reassess their processing systems and implement operational changes as necessary. If not, sellers can be at risk of financial trouble. 

The Basics of Sales Tax in Ecommerce

Now that you understand how crucial sales tax is in your ecommerce venture, it's time to learn the basic terms and processes:

Ecommerce Sales Tax

Sales tax is a minor percentage of an online retailer's sales. It is a consumer or consumption tax, meaning consumers pay sales tax only on taxable goods. In the US, 45 states have implemented this tax. 

ecommerce sales tax tax nexus per state data

Moreover, there are combined sales taxes because counties, cities, and other local areas have "special taxing districts." Special taxing districts, also known as limited-purpose districts, provide special benefits to the residents of a certain local area.

The state where you sell and the destination point are the main factors in charging sales tax. You'll charge customers the sales tax required and remit it to the particular state.

Taxable Products

A rule of thumb in product taxability is that any tangible item is automatically taxable. Still, some states have exceptions, such as products with or without a reduced sales tax rate. Your customers will have to pay for these, so ensure they only pay as necessary.

Rates and Sales Tax Calculation

Here's a quick guide on how to calculate sales tax for Ecommerce.

  1. First, have these details ready: (1) the state-mandated product rate, (2) the cost of the item, and (3) other important local sales tax rates, if any.
  2. Multiply the item cost by the state tax rate. Ensure to convert percentages into decimals. 
  3. If there are additional local tax rates, multiply the cost of the item by these different rates. Then, add the amounts you get from this and the sales tax rate multiplication.

In a formula structure: 

Tax Nexus

Tax nexus is the connection between your business, a state, or any other taxing authority. Naturally, you get a tax nexus in your home state, but some conditions may also prompt other sales tax nexus in some states, such as high revenue. Once you confirm a sales tax nexus, you can begin registering with the state's tax department, collect and remit sales tax, and file a tax return.

Table of tax nexus conditions

5 Steps to Tax Compliance

We hope the discussions above have helped you understand the online sales tax system better. It may be overwhelming and stressful, but that's much better than getting into a heap of financial trouble later on. Now that you have the basic knowledge let's move on to tax compliance. 

Tax compliance can be extremely confusing, and the smallest mistake can snowball into a huge financial mess. To prevent the confusion and stress of your ecommerce taxes, we've provided a step-by-step procedure to serve as your to-do list. 

Step 1: Perform a Thorough Q&A Session 

Economic Nexus: Questions to Ask

Before proceeding to action, ask yourself some important questions first. Your answers will determine which states you have an economic nexus in. We also recommend you consult with each state you're involved with to confirm these details.

Step 2: Register With the Tax Authority for a Sales Tax Permit

Next, register with the tax authority for a sales permit. This is the document that allows you to collect taxes legally. Contact your state's tax authority to obtain a sales tax permit. Then, you'll be asked to provide the following (not limited to) information:

  • Employer Identification Number or Federal Employer Identification Number
  • Contact information (business and personal)
  • Social security number 
  • Your business entity
  • North American Industry Classification System Code

Depending on the state, these permits may be free or can cost up to $100. The renewal of a sales permit depends on the tax authority you're associated with. For example, some sales tax permits need renewal every one or two years. Meanwhile, others don't require renewal as long as your business still operates. 

Some states consider seller's permits as "resale certificates." Generally, resale certificates are signed documents that allow you to buy tax-free goods to resell. 

Like sales tax regulations, policies for resale certificates also differ by state. For example, one state considers your sales tax permit the resale certificate. Meanwhile, another requires you to have an independent reseller's permit number. 

Step 3: Know the Rates, How Tax Collection Works, and How Automation Helps.

Ensure your shopping carts, online checkouts, and other marketplace processing systems function properly. There are different bases for tax rates, so your platforms must charge the correct amounts.

Optimize Origin-Based, Destination-Based, and Mixed Sourcing

Each state makes its own tax rules, hence, the different sales tax sourcing bases. Sales tax sourcing is the basis of charging sales tax, namely, origin-based, destination-based, and mixed sourcing. 

Origin-based states follow the tax rate where the business or seller is located. Here are the states that collect origin-based sales tax rates:

Origin-Based Sales Tax Rates
STATESALES TAX RATESRANGE OF LOCAL SALES TAX RATES
Puerto Rico11.50%0%
California7.25%0% – 3.25%
Indiana7.00%0%
Mississippi7.00%0% – 1%
Minnesota6.88%0% – 2%
Nevada6.85%0% – 1.525%
New Jersey6.63%0%
Arkansas6.50%0% – 6.125%
Kansas6.50%0% – 5.1%
Washington6.50%0.5% – 4.1%
Connecticut6.35%0% -1%
Massachusetts6.25%0%
District of Columbia6.00%0%
Florida6.00%0% – 2.5%
Idaho6.00%0% – 3%
Iowa6.00%0% – 2%
Kentucky6.00%0%
Maryland6.00%0%
Michigan6.00%0%
South Carolina6.00%0% – 3%
Vermont6.00%0% – 1%
West Virginia6.00%0% – 1%
Maine5.50%0%
Nebraska5.50%0% – 2.5%
North Dakota5.00%0% – 3%
Wisconsin5.00%0% – 1.75%
North Carolina4.75%2% – 3%
Oklahoma4.50%0% – 7%
Louisiana4.45%0% – 8.5%
South Dakota4.20%0% – 8%
Alabama4.00%0% – 9.0%
Georgia4.00%1% – 5%
Hawaii4.00%0% – 0.5%
New York4.00%0% – 5%
Wyoming4.00%0% – 4%
Colorado2.90%0% – 8.3%
Alaska0.00%0% – 9.5%
Delaware0.00%0%
Montana0.00%0%
New Hampshire0.00%0%
Oregon0.00%0%

Sources:

US Range of Local Sales Tax Rates

US States Sales Tax Rates

Sales Tax Rate Basis

Meanwhile, destination-based states follow the tax rate of the shipping address. Here are the states that collect destination-based sales tax rates:

Destination-Based Sales Tax Rates
STATESALES TAX RATESRANGE OF LOCAL SALES TAX RATES
Rhode Island7.00%0%
Tennessee7.00%1.5% – 2.75%
Illinois6.25%0% – 5.25%
Texas6.25%0% – 2%, 1.75% local rate for remote sellers
Pennsylvania6.00%0% – 2%
Ohio5.75%0 – 2.25%
Arizona5.60%0 – 7.30%
New Mexico5.00%0.125% – 7.75%
Utah4.85%1% – 7.5%
Virginia4.30%1% – 2.7%
Missouri4.23%0.5% – 7.763%

Sources:

US Range of Local Sales Tax Rates

US States Sales Tax Rates

Sales Tax Rate Basis

California is the lone state with a mixed-sourcing sales tax rate basis. District sales taxes are based on the shipping location, while city, county, and state taxes are based on the business or seller’s location.

Mixed-Sourcing Sales Tax Rates
STATESALES TAX RATERANGE OF LOCAL SALES TAX RATE
California7.25%0% – 3.25%

Sources:

US Range of Local Sales Tax Rates

US States Sales Tax Rates

Sales Tax Rate Basis

Ecommerce Platforms’ Different Tax Collection Systems

Generally, marketplaces significantly differ from each other, and so do their tax collection systems. For example, if you sell on Amazon, you will find a detailed tax collection engine different from another ecommerce site.

Automation Is Key to Efficient Sales Tax Management

Manual accounting puts your business finances at great risk. You might not find any issues at first, but that's because you can still handle the numbers. However, digits and state sales tax laws can change as time passes. Hence, managing data manually will be difficult and error-prone.

Automated cloud-based accounting software is the go-to for ecommerce tax compliance. It helps you meet all deadlines and tax rate differences in real-time. Doing so can prevent discrepancies and financial trouble with the states and customers.

Step 4: File and Remit Ecommerce Sales Tax

Take note of the filing frequency the state provided when you were obtaining a seller's permit. It tells you how often and on which due dates your ecommerce sales tax filing will take place. Depending on your tax authority, you will usually file and remit taxes monthly, quarterly, or annually. 

Unfortunately, states aren't satisfied with just an overall amount of collected taxes. Instead, they would ask for the tax you collected per state, county, city, and other local areas with special taxes. 

Before you get floored upon tax remittance day, ensure you're fully equipped with this information. As previously mentioned, automated technology can help you filter out these details.

Let's say you have a tax permit in a certain county but didn't collect anything within a specific period. Still, you must file a sales tax return since it's mandatory. To do so, file "zero reports" or "zero returns" for compliance. 

Step 5: Keep Track of Tax Compliance Updates

The current sales tax policies for ecommerce won't stay the same forever. It's still developing, so expect changes in requirements and processes in the future. To avoid trouble with outdated sales tax activities, stay on top of changes concerning tax compliance.

Seek updates from the states where you're permitted to collect sales tax. You may regularly visit their website, social media or subscribe to newsletters, if any. If you have an accounting team or tax advisor, consult them about it. Additionally, always monitor your sales and stay alert when they exceed a certain threshold limit.

four individuals in a conference room having a meeting

Hiring a Bookkeeping and Accounting Team

If you're still unsure whether you're collecting and filing your taxes correctly, you can ask the help of accounting or bookkeeping experts. Don't wait for your tax authority to assess your tax compliance, and avoid charging your customers the wrong amount in their purchases.

Hence, it is best to work with a trusted team of accountants to help you with the how-tos and management of sales taxes.

When tax management starts to take a toll on you, it's time to get help from experts. You might feel reluctant to pay an entire team and have them take charge of your company's financial work. We understand that, so we've enumerated the important things you need to know when hiring bookkeepers or accountants. 

Setting the Right Expectations

You must first understand their roles when hiring a bookkeeping or accounting team. Doing this lets you know exactly what you're paying for and avoid miscommunication during the collaboration. For example, bookkeeping and accounting tasks differ—bookkeepers conduct administrative tasks while accountants interpret and analyze financial data. 

Find out the specific tasks they will conduct. For example, in tax compliance, ask if they will help you prepare, manage, or submit sales taxes. Knowing this lets you picture the job distribution: which tasks fall under my care? Which tasks can I turn over to the team? 

Freelance vs. Firm

You get to choose between freelance or firm for tax management services. Each has different pros and cons, and you need to understand them to make a final hiring decision. For example, you have less control over freelancers, but they usually charge lower rates than firms.

Bookkeeping or accounting firms, on the other hand, have a fixed schedule and offer more personnel. While cost can be an issue, you’ll always have someone around to meet your accounting needs.

Area and Level of Expertise

Consider asking for the area of expertise of the bookkeepers or accountants you're hiring. No matter how good they can be, progress can become slow-paced and risky if they don't understand how your industry works. 

If they have working experience concerning your niche, things will be easier to manage and improve. In addition, look for their certifications, such as the American Institute of Professional Bookkeepers (AIPB) and Certified Public Accountant (CPA) licenses. 

Way of Communication

Whether or not you know much about financial management, how your accountant communicates with you is important. Without proper communication, your business is at risk of financial trouble. Hire someone or a company that complements the way you communicate.

If you need guidance on sales taxes, they must communicate complex matters in a way you can easily understand. Generally, they should not force you to act in any way without even listening to your opinions first. They might have good intentions for your company, but they should still respect your pace and adapt as necessary.

Technological Knowledge

Technology matters significantly in ecommerce tax management. Your ecommerce platforms should display accurate tax rates and process orders seamlessly. Thus, the accountants you'll hire should know the latest and most effective technologies in managing your finances.

Moreover, they should provide you with a demonstration of these tools. Ask them why they'd choose a particular ecommerce sales tax software for a certain transaction. Then, evaluate if their choices are valid, not overpriced, and are the latest, most efficient programs you can use.

a man holding a tab-like device clicking the "Taxes" text projected on the screen

Technology and Sales Tax Management

Since South Dakota v. Wayfair in 2018, businesses need to turn heads in not just one or two states but almost all of them. As a result, merchants spend up to 300 hours on tax management—isn't it natural to switch to automation now?

Some companies don't include tax management in their list of priorities, which can do more harm than good in the long run. As a seller, you should know that managing sales tax is a huge concern when not properly taken care of. In addition, you must be aware of the potential long-term consequences of incorrect tax compliance. 

To avoid that, you must switch to automated management. What are the benefits that await you in sales tax automation?

  • Reduce half of the time you spend managing taxes 
  • Prevent inaccurate tax payments more often (e.g., overpaying or underpaying)
  • Submit reports and avoid potential penalties more often
  • Make every working hour and effort more worthwhile

QuickBooks, A2X, Taxjar, Turbotax, and Hubdocs, are just a few of the most preferred tax management and compliance software today. When hiring bookkeepers or accountants, ensure they are familiar with such tools.

Sales Tax For Ecommerce Sellers: Tax Solutions With Unloop

With Unloop's ecommerce sales tax services, you can ensure seamless tax management and compliance for your business. We partner with accounting firms and Taxjar, a tax compliance company, to ensure accurate internet sales taxes on time. 

We accommodate you in every step you must take for sales tax compliance. Our action plans are as follows: 

  • We identify where you have a sales tax economic nexus.
  • We determine if you can abide by the tax laws of your state(s).
  • We help register your business for tax permits.
  • We set up your ecommerce platforms for automated tax rate adjustments.
  • We help manage your tax filings. While we don't file tax returns (we're not a CPA firm), we work with CPAs who can file them for you instead.
  • We monitor sales rates and tax compliance to help you stay on top. 

Whether you're a US seller on Amazon or Shopify, we have all the bookkeeping solutions ready. If you're serious about growing your business in the online marketplace, take this step with great courage and let us help you from start to finish!

Ecommerce is rapidly developing, and so are the states adapting to the Wayfair rule. In the constantly changing chain of tax systems, you must keep pace with the changes to achieve proper tax compliance. 

Once you understand how things work, implement solutions that help you make the work manageable. Hire the right people, use effective tools, and stay on top of your growing ecommerce sales. Book a call with us now!

A Guide to Ecommerce Sales Tax in the USA
Watch Now

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Are you ready to enter the ecommerce world? It's a huge step considering that most shoppers today rely heavily on technology. Meanwhile, for sellers, it's an opportunity to expand the customer base internationally. But, we must address a common challenge among online sellers: ecommerce sales tax. 

With ecommerce, distance won't hinder a business from selling to another state or country. That's an incredible advantage of technology, but it’s also not without challenges. As a first-time ecommerce seller, you might ask yourself: "Do remote businesses need to pay sales tax?" Yes, they do.

Tax collection and remittance are now part of the requirements in ecommerce. Everyone in the industry knows the struggle, and no one expects you to digest everything in a day or two. But we’re here to help.

This article breaks down the fundamentals of sales tax in the USA. Know the basics and read some valuable tips on managing tax compliance. 

Here are some of the points we will be covering:

  • How Ecommerce Sales Tax Started
  • How Remote Sellers Are Affected by Sales Tax Policies
  • The Basics of Sales Tax in Ecommerce
  • 5 Steps to Tax Compliance
  • Hiring a Bookkeeping and Accounting Team
  • Technology and Sales Tax Management
  • Sales Tax For Ecommerce Sellers: Tax Solutions With Unloop

How Ecommerce Sales Tax Started

If your business has a physical storefront, office, or warehouse in a certain state, you must pay and remit sales tax. That was the golden rule until the South Dakota v. Wayfair, Inc. happened in 2018, which states that online businesses must collect sales tax regardless of physical presence. 

In addition, states can redefine the "sales tax nexus" from a broader perspective so that ecommerce retailers become a part of the scope. Economic nexus or tax nexus happens when a seller has to collect tax in certain states where they exceed the revenue threshold.

ecommerce sales tax thresholds data

How Remote Sellers Are Affected by Sales Tax Policies

The development of ecommerce sales tax laws makes the system immensely complicated—one of the most challenging aspects of ecommerce tax in compliance with constantly changing state policies. 

Ecommerce sales tax differs by state, and businesses must learn and comply with all that. It's not easy, and it gets more complicated internationally. Each country has a different tax law, which you must also consider. 

Because of the ever-changing tax policies, businesses are pushed to reassess their processing systems and implement operational changes as necessary. If not, sellers can be at risk of financial trouble. 

The Basics of Sales Tax in Ecommerce

Now that you understand how crucial sales tax is in your ecommerce venture, it's time to learn the basic terms and processes:

Ecommerce Sales Tax

Sales tax is a minor percentage of an online retailer's sales. It is a consumer or consumption tax, meaning consumers pay sales tax only on taxable goods. In the US, 45 states have implemented this tax. 

ecommerce sales tax tax nexus per state data

Moreover, there are combined sales taxes because counties, cities, and other local areas have "special taxing districts." Special taxing districts, also known as limited-purpose districts, provide special benefits to the residents of a certain local area.

The state where you sell and the destination point are the main factors in charging sales tax. You'll charge customers the sales tax required and remit it to the particular state.

Taxable Products

A rule of thumb in product taxability is that any tangible item is automatically taxable. Still, some states have exceptions, such as products with or without a reduced sales tax rate. Your customers will have to pay for these, so ensure they only pay as necessary.

Rates and Sales Tax Calculation

Here's a quick guide on how to calculate sales tax for Ecommerce.

  1. First, have these details ready: (1) the state-mandated product rate, (2) the cost of the item, and (3) other important local sales tax rates, if any.
  2. Multiply the item cost by the state tax rate. Ensure to convert percentages into decimals. 
  3. If there are additional local tax rates, multiply the cost of the item by these different rates. Then, add the amounts you get from this and the sales tax rate multiplication.

In a formula structure: 

Tax Nexus

Tax nexus is the connection between your business, a state, or any other taxing authority. Naturally, you get a tax nexus in your home state, but some conditions may also prompt other sales tax nexus in some states, such as high revenue. Once you confirm a sales tax nexus, you can begin registering with the state's tax department, collect and remit sales tax, and file a tax return.

Table of tax nexus conditions

5 Steps to Tax Compliance

We hope the discussions above have helped you understand the online sales tax system better. It may be overwhelming and stressful, but that's much better than getting into a heap of financial trouble later on. Now that you have the basic knowledge let's move on to tax compliance. 

Tax compliance can be extremely confusing, and the smallest mistake can snowball into a huge financial mess. To prevent the confusion and stress of your ecommerce taxes, we've provided a step-by-step procedure to serve as your to-do list. 

Step 1: Perform a Thorough Q&A Session 

Economic Nexus: Questions to Ask

Before proceeding to action, ask yourself some important questions first. Your answers will determine which states you have an economic nexus in. We also recommend you consult with each state you're involved with to confirm these details.

Step 2: Register With the Tax Authority for a Sales Tax Permit

Next, register with the tax authority for a sales permit. This is the document that allows you to collect taxes legally. Contact your state's tax authority to obtain a sales tax permit. Then, you'll be asked to provide the following (not limited to) information:

  • Employer Identification Number or Federal Employer Identification Number
  • Contact information (business and personal)
  • Social security number 
  • Your business entity
  • North American Industry Classification System Code

Depending on the state, these permits may be free or can cost up to $100. The renewal of a sales permit depends on the tax authority you're associated with. For example, some sales tax permits need renewal every one or two years. Meanwhile, others don't require renewal as long as your business still operates. 

Some states consider seller's permits as "resale certificates." Generally, resale certificates are signed documents that allow you to buy tax-free goods to resell. 

Like sales tax regulations, policies for resale certificates also differ by state. For example, one state considers your sales tax permit the resale certificate. Meanwhile, another requires you to have an independent reseller's permit number. 

Step 3: Know the Rates, How Tax Collection Works, and How Automation Helps.

Ensure your shopping carts, online checkouts, and other marketplace processing systems function properly. There are different bases for tax rates, so your platforms must charge the correct amounts.

Optimize Origin-Based, Destination-Based, and Mixed Sourcing

Each state makes its own tax rules, hence, the different sales tax sourcing bases. Sales tax sourcing is the basis of charging sales tax, namely, origin-based, destination-based, and mixed sourcing. 

Origin-based states follow the tax rate where the business or seller is located. Here are the states that collect origin-based sales tax rates:

Origin-Based Sales Tax Rates
STATESALES TAX RATESRANGE OF LOCAL SALES TAX RATES
Puerto Rico11.50%0%
California7.25%0% – 3.25%
Indiana7.00%0%
Mississippi7.00%0% – 1%
Minnesota6.88%0% – 2%
Nevada6.85%0% – 1.525%
New Jersey6.63%0%
Arkansas6.50%0% – 6.125%
Kansas6.50%0% – 5.1%
Washington6.50%0.5% – 4.1%
Connecticut6.35%0% -1%
Massachusetts6.25%0%
District of Columbia6.00%0%
Florida6.00%0% – 2.5%
Idaho6.00%0% – 3%
Iowa6.00%0% – 2%
Kentucky6.00%0%
Maryland6.00%0%
Michigan6.00%0%
South Carolina6.00%0% – 3%
Vermont6.00%0% – 1%
West Virginia6.00%0% – 1%
Maine5.50%0%
Nebraska5.50%0% – 2.5%
North Dakota5.00%0% – 3%
Wisconsin5.00%0% – 1.75%
North Carolina4.75%2% – 3%
Oklahoma4.50%0% – 7%
Louisiana4.45%0% – 8.5%
South Dakota4.20%0% – 8%
Alabama4.00%0% – 9.0%
Georgia4.00%1% – 5%
Hawaii4.00%0% – 0.5%
New York4.00%0% – 5%
Wyoming4.00%0% – 4%
Colorado2.90%0% – 8.3%
Alaska0.00%0% – 9.5%
Delaware0.00%0%
Montana0.00%0%
New Hampshire0.00%0%
Oregon0.00%0%

Sources:

US Range of Local Sales Tax Rates

US States Sales Tax Rates

Sales Tax Rate Basis

Meanwhile, destination-based states follow the tax rate of the shipping address. Here are the states that collect destination-based sales tax rates:

Destination-Based Sales Tax Rates
STATESALES TAX RATESRANGE OF LOCAL SALES TAX RATES
Rhode Island7.00%0%
Tennessee7.00%1.5% – 2.75%
Illinois6.25%0% – 5.25%
Texas6.25%0% – 2%, 1.75% local rate for remote sellers
Pennsylvania6.00%0% – 2%
Ohio5.75%0 – 2.25%
Arizona5.60%0 – 7.30%
New Mexico5.00%0.125% – 7.75%
Utah4.85%1% – 7.5%
Virginia4.30%1% – 2.7%
Missouri4.23%0.5% – 7.763%

Sources:

US Range of Local Sales Tax Rates

US States Sales Tax Rates

Sales Tax Rate Basis

California is the lone state with a mixed-sourcing sales tax rate basis. District sales taxes are based on the shipping location, while city, county, and state taxes are based on the business or seller’s location.

Mixed-Sourcing Sales Tax Rates
STATESALES TAX RATERANGE OF LOCAL SALES TAX RATE
California7.25%0% – 3.25%

Sources:

US Range of Local Sales Tax Rates

US States Sales Tax Rates

Sales Tax Rate Basis

Ecommerce Platforms’ Different Tax Collection Systems

Generally, marketplaces significantly differ from each other, and so do their tax collection systems. For example, if you sell on Amazon, you will find a detailed tax collection engine different from another ecommerce site.

Automation Is Key to Efficient Sales Tax Management

Manual accounting puts your business finances at great risk. You might not find any issues at first, but that's because you can still handle the numbers. However, digits and state sales tax laws can change as time passes. Hence, managing data manually will be difficult and error-prone.

Automated cloud-based accounting software is the go-to for ecommerce tax compliance. It helps you meet all deadlines and tax rate differences in real-time. Doing so can prevent discrepancies and financial trouble with the states and customers.

Step 4: File and Remit Ecommerce Sales Tax

Take note of the filing frequency the state provided when you were obtaining a seller's permit. It tells you how often and on which due dates your ecommerce sales tax filing will take place. Depending on your tax authority, you will usually file and remit taxes monthly, quarterly, or annually. 

Unfortunately, states aren't satisfied with just an overall amount of collected taxes. Instead, they would ask for the tax you collected per state, county, city, and other local areas with special taxes. 

Before you get floored upon tax remittance day, ensure you're fully equipped with this information. As previously mentioned, automated technology can help you filter out these details.

Let's say you have a tax permit in a certain county but didn't collect anything within a specific period. Still, you must file a sales tax return since it's mandatory. To do so, file "zero reports" or "zero returns" for compliance. 

Step 5: Keep Track of Tax Compliance Updates

The current sales tax policies for ecommerce won't stay the same forever. It's still developing, so expect changes in requirements and processes in the future. To avoid trouble with outdated sales tax activities, stay on top of changes concerning tax compliance.

Seek updates from the states where you're permitted to collect sales tax. You may regularly visit their website, social media or subscribe to newsletters, if any. If you have an accounting team or tax advisor, consult them about it. Additionally, always monitor your sales and stay alert when they exceed a certain threshold limit.

four individuals in a conference room having a meeting

Hiring a Bookkeeping and Accounting Team

If you're still unsure whether you're collecting and filing your taxes correctly, you can ask the help of accounting or bookkeeping experts. Don't wait for your tax authority to assess your tax compliance, and avoid charging your customers the wrong amount in their purchases.

Hence, it is best to work with a trusted team of accountants to help you with the how-tos and management of sales taxes.

When tax management starts to take a toll on you, it's time to get help from experts. You might feel reluctant to pay an entire team and have them take charge of your company's financial work. We understand that, so we've enumerated the important things you need to know when hiring bookkeepers or accountants. 

Setting the Right Expectations

You must first understand their roles when hiring a bookkeeping or accounting team. Doing this lets you know exactly what you're paying for and avoid miscommunication during the collaboration. For example, bookkeeping and accounting tasks differ—bookkeepers conduct administrative tasks while accountants interpret and analyze financial data. 

Find out the specific tasks they will conduct. For example, in tax compliance, ask if they will help you prepare, manage, or submit sales taxes. Knowing this lets you picture the job distribution: which tasks fall under my care? Which tasks can I turn over to the team? 

Freelance vs. Firm

You get to choose between freelance or firm for tax management services. Each has different pros and cons, and you need to understand them to make a final hiring decision. For example, you have less control over freelancers, but they usually charge lower rates than firms.

Bookkeeping or accounting firms, on the other hand, have a fixed schedule and offer more personnel. While cost can be an issue, you’ll always have someone around to meet your accounting needs.

Area and Level of Expertise

Consider asking for the area of expertise of the bookkeepers or accountants you're hiring. No matter how good they can be, progress can become slow-paced and risky if they don't understand how your industry works. 

If they have working experience concerning your niche, things will be easier to manage and improve. In addition, look for their certifications, such as the American Institute of Professional Bookkeepers (AIPB) and Certified Public Accountant (CPA) licenses. 

Way of Communication

Whether or not you know much about financial management, how your accountant communicates with you is important. Without proper communication, your business is at risk of financial trouble. Hire someone or a company that complements the way you communicate.

If you need guidance on sales taxes, they must communicate complex matters in a way you can easily understand. Generally, they should not force you to act in any way without even listening to your opinions first. They might have good intentions for your company, but they should still respect your pace and adapt as necessary.

Technological Knowledge

Technology matters significantly in ecommerce tax management. Your ecommerce platforms should display accurate tax rates and process orders seamlessly. Thus, the accountants you'll hire should know the latest and most effective technologies in managing your finances.

Moreover, they should provide you with a demonstration of these tools. Ask them why they'd choose a particular ecommerce sales tax software for a certain transaction. Then, evaluate if their choices are valid, not overpriced, and are the latest, most efficient programs you can use.

a man holding a tab-like device clicking the "Taxes" text projected on the screen

Technology and Sales Tax Management

Since South Dakota v. Wayfair in 2018, businesses need to turn heads in not just one or two states but almost all of them. As a result, merchants spend up to 300 hours on tax management—isn't it natural to switch to automation now?

Some companies don't include tax management in their list of priorities, which can do more harm than good in the long run. As a seller, you should know that managing sales tax is a huge concern when not properly taken care of. In addition, you must be aware of the potential long-term consequences of incorrect tax compliance. 

To avoid that, you must switch to automated management. What are the benefits that await you in sales tax automation?

  • Reduce half of the time you spend managing taxes 
  • Prevent inaccurate tax payments more often (e.g., overpaying or underpaying)
  • Submit reports and avoid potential penalties more often
  • Make every working hour and effort more worthwhile

QuickBooks, A2X, Taxjar, Turbotax, and Hubdocs, are just a few of the most preferred tax management and compliance software today. When hiring bookkeepers or accountants, ensure they are familiar with such tools.

Sales Tax For Ecommerce Sellers: Tax Solutions With Unloop

With Unloop's ecommerce sales tax services, you can ensure seamless tax management and compliance for your business. We partner with accounting firms and Taxjar, a tax compliance company, to ensure accurate internet sales taxes on time. 

We accommodate you in every step you must take for sales tax compliance. Our action plans are as follows: 

  • We identify where you have a sales tax economic nexus.
  • We determine if you can abide by the tax laws of your state(s).
  • We help register your business for tax permits.
  • We set up your ecommerce platforms for automated tax rate adjustments.
  • We help manage your tax filings. While we don't file tax returns (we're not a CPA firm), we work with CPAs who can file them for you instead.
  • We monitor sales rates and tax compliance to help you stay on top. 

Whether you're a US seller on Amazon or Shopify, we have all the bookkeeping solutions ready. If you're serious about growing your business in the online marketplace, take this step with great courage and let us help you from start to finish!

Ecommerce is rapidly developing, and so are the states adapting to the Wayfair rule. In the constantly changing chain of tax systems, you must keep pace with the changes to achieve proper tax compliance. 

Once you understand how things work, implement solutions that help you make the work manageable. Hire the right people, use effective tools, and stay on top of your growing ecommerce sales. Book a call with us now!

Read more

Stop guessing

Know exactly where your ecommerce business stands financially.
+1 877 421 7270
228 Park Ave S #82849
New York, NY 10003
United States
7676 Woodbine Ave #2
Markham, ON L3R 2N2
Canada
228 Park Ave S #82849
New York, NY 10003
United States
7676 Woodbine Ave #2
Markham, ON L3R 2N2
Canada
About unloop

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.

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