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

Category: Bookkeeping

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.

With all of Canada's different rules and regulations, income tax can be incredibly hard to digest, especially if you aren't certain about what you should do in the first place. That said, it’s easy to see why Canadian citizens have much to ask and concern themselves with regard to the filing of taxes. 

To illustrate, most Canadian residents have been curious about whether they should list their TFSA contributions on their income tax returns. Many individuals have this question, and the answer can be a little distracting. Nevertheless, we'll break down some of the things you should keep in mind when using a TFSA account and tell you if you still need to claim it on your income tax return.

A Closer Look at TFSA

TFSA (Tax-Free Savings Account) is a special account offered by the Canadian government that allows you to save money without paying taxes on your earnings. You can put any income in it–interest, dividends, capital gains, or even freelance income.

Established in 2009, TFSA was launched in Canada with a maximum contribution of C$5,000 per year. After a few years, the annual contribution was raised to C$5,500 and remained until 2018. The donation maximum was increased to C$6,000 in 2019.

This savings account is a great asset for Canadian residents aged 18 or older who don't want to worry about the government taking a cut. With the help of TFSA, you can grow savings, save money for short-term or long-term goals, and shelter your investments from taxation.

Benefits of TFSA

If you're wondering about your financial future, this is a great time to set up this TFSA and see the endless possibilities that come with it. So here are some pointers that can help you maximize your financial gain with TFSA.

Save on taxes - All earnings and withdrawals from your TFSA are tax-free, including the income/tax returns earned on investments.

Build up your savings - A TFSA is a great way to set aside money for short-term or long-term goals. And since contributions and growth are not taxed, your savings will grow even faster.

Higher contribution limit - The contribution limit for TFSA is high enough that you can save a significant amount of money over time. In 2021, the TFSA contribution maximum was $6,000.

Flexible - To keep in your TFSA, you can buy a variety of savings and investment items, like bonds, equities, and exchange-traded funds (ETFs).

Main Concerns

Close-up of man's hands holding Canadian cash for RRSP and TFSA investments

There's a lot of uncertainty around TFSAs in Canada. Some people think they can't do anything with them, while others think they're the best thing ever. TFSA offers many benefits but also has some rules you need to follow. 

Is there a way to save as much money as you want without paying taxes? Do you need to file your TFSA on your tax return? Let's look and check if you can maximize your financial landscape here.

About Residency

Sadly, only those residents from Canada can open this tax-free savings account. Meanwhile, TFSA account holders who become non-residents of Canada can keep their accounts and avoid paying taxes on any earnings or withdrawals. On the other hand, non-resident holders may be taxed in certain circumstances.

You'll be taxed a 1% monthly tax if you make contributions in years when you are classified as a non-resident of Canada, for example. As a result, you will find it difficult to make additional contributions. To add, TFSA will accrue no contribution room during the years of non-residency.

About Contributions

The maximum yearly contribution limit for 2021 is $6,000, regardless of earned income. However, your contributions mustn't go overboard so that you won't be penalized. Otherwise, you need to pay the taxes mandated by the Canada Revenue Agency (CRA) at 1% per month. 

About Income Tax Return

Do you claim TFSA on your income tax return in Canada? To clarify this concern, here's the simplest answer that we can go: You can't claim it because contributions are not tax-deductible in the first place. Thus, they do not affect taxable income.

You can compare this with the Registered Retirement Savings Plan (RRSP), an example of a tax-deferred account from Canada where income/tax returns are tax-sheltered until withdrawn. 

On the other hand, you need to consider a few pointers as part of the policy. If you outpace your yearly contribution limit, for example, you must pay tax on the surplus TFSA amount. 

To demonstrate, if you submitted at least $600 to your TFSA in August 2020 and didn’t do anything about it for the rest of the year, you need to pay at least $6 every month. This contribution will be for the next five months until the year is finished.

Combining Tax Knowledge With Financial Planning

So, do you have to claim TFSA on your income tax return? The answer is both yes and no. It depends on how much money you contributed to your TFSA in a given year and what type of income you earned. 

If you're not sure how to start with TFSA or whether or not you need to report your TFSA contributions, it's always best to speak with an accounting team for clarification. However, as long as you follow the rules and limitations surrounding TFSAs, there are many benefits you can enjoy for the rest of your saving years.
We hope this blog has cleared up any misunderstandings you may have had concerning TFSAs. As always, stay tuned to Unloop for informative tax reviews and more blog posts like this one.

What Canadian Taxpayers Should Know: Do You Have to Claim TFSA on Income Tax Return?
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.

With all of Canada's different rules and regulations, income tax can be incredibly hard to digest, especially if you aren't certain about what you should do in the first place. That said, it’s easy to see why Canadian citizens have much to ask and concern themselves with regard to the filing of taxes. 

To illustrate, most Canadian residents have been curious about whether they should list their TFSA contributions on their income tax returns. Many individuals have this question, and the answer can be a little distracting. Nevertheless, we'll break down some of the things you should keep in mind when using a TFSA account and tell you if you still need to claim it on your income tax return.

A Closer Look at TFSA

TFSA (Tax-Free Savings Account) is a special account offered by the Canadian government that allows you to save money without paying taxes on your earnings. You can put any income in it–interest, dividends, capital gains, or even freelance income.

Established in 2009, TFSA was launched in Canada with a maximum contribution of C$5,000 per year. After a few years, the annual contribution was raised to C$5,500 and remained until 2018. The donation maximum was increased to C$6,000 in 2019.

This savings account is a great asset for Canadian residents aged 18 or older who don't want to worry about the government taking a cut. With the help of TFSA, you can grow savings, save money for short-term or long-term goals, and shelter your investments from taxation.

Benefits of TFSA

If you're wondering about your financial future, this is a great time to set up this TFSA and see the endless possibilities that come with it. So here are some pointers that can help you maximize your financial gain with TFSA.

Save on taxes - All earnings and withdrawals from your TFSA are tax-free, including the income/tax returns earned on investments.

Build up your savings - A TFSA is a great way to set aside money for short-term or long-term goals. And since contributions and growth are not taxed, your savings will grow even faster.

Higher contribution limit - The contribution limit for TFSA is high enough that you can save a significant amount of money over time. In 2021, the TFSA contribution maximum was $6,000.

Flexible - To keep in your TFSA, you can buy a variety of savings and investment items, like bonds, equities, and exchange-traded funds (ETFs).

Main Concerns

Close-up of man's hands holding Canadian cash for RRSP and TFSA investments

There's a lot of uncertainty around TFSAs in Canada. Some people think they can't do anything with them, while others think they're the best thing ever. TFSA offers many benefits but also has some rules you need to follow. 

Is there a way to save as much money as you want without paying taxes? Do you need to file your TFSA on your tax return? Let's look and check if you can maximize your financial landscape here.

About Residency

Sadly, only those residents from Canada can open this tax-free savings account. Meanwhile, TFSA account holders who become non-residents of Canada can keep their accounts and avoid paying taxes on any earnings or withdrawals. On the other hand, non-resident holders may be taxed in certain circumstances.

You'll be taxed a 1% monthly tax if you make contributions in years when you are classified as a non-resident of Canada, for example. As a result, you will find it difficult to make additional contributions. To add, TFSA will accrue no contribution room during the years of non-residency.

About Contributions

The maximum yearly contribution limit for 2021 is $6,000, regardless of earned income. However, your contributions mustn't go overboard so that you won't be penalized. Otherwise, you need to pay the taxes mandated by the Canada Revenue Agency (CRA) at 1% per month. 

About Income Tax Return

Do you claim TFSA on your income tax return in Canada? To clarify this concern, here's the simplest answer that we can go: You can't claim it because contributions are not tax-deductible in the first place. Thus, they do not affect taxable income.

You can compare this with the Registered Retirement Savings Plan (RRSP), an example of a tax-deferred account from Canada where income/tax returns are tax-sheltered until withdrawn. 

On the other hand, you need to consider a few pointers as part of the policy. If you outpace your yearly contribution limit, for example, you must pay tax on the surplus TFSA amount. 

To demonstrate, if you submitted at least $600 to your TFSA in August 2020 and didn’t do anything about it for the rest of the year, you need to pay at least $6 every month. This contribution will be for the next five months until the year is finished.

Combining Tax Knowledge With Financial Planning

So, do you have to claim TFSA on your income tax return? The answer is both yes and no. It depends on how much money you contributed to your TFSA in a given year and what type of income you earned. 

If you're not sure how to start with TFSA or whether or not you need to report your TFSA contributions, it's always best to speak with an accounting team for clarification. However, as long as you follow the rules and limitations surrounding TFSAs, there are many benefits you can enjoy for the rest of your saving years.
We hope this blog has cleared up any misunderstandings you may have had concerning TFSAs. As always, stay tuned to Unloop for informative tax reviews and more blog posts like this one.

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.

It's no secret that people are shopping more on Amazon. This is because they offer competitive prices and items that are delivered right to your door. But more treats are waiting for both Amazon buyers and sellers. One of them is a very important benefit: saving money.

You might not be knowledgeable enough to know how easy it is to save money with a seamless buying process. This article will discuss tips for optimizing the purchase process, including the Amazon Sales Tax Exemption Program (ATEP).

How Does an Optimized Buying Process Help Your Business?

A good business does its best to provide customers with a great purchasing experience. Without consumers, the business won't be there in the first place. Moreover, an easy and fair transaction process reduces questions or doubts from your customers.

Financially, it saves and earns you a lot of money. An optimized buying process reduces the likelihood of product returns. Returns can hurt the business's profit, so providing a good customer experience can minimize financial loss. It also shows you've gained customer trust and satisfaction.

Five Tips on Optimizing the Purchasing Process

Now that you know how important it is to provide a smooth purchasing process, here are some tips on optimizing the buying experience. Additionally, we'll introduce you to the ATEP feature from Amazon for tax-free and unquestionable purchases.

Tip #1: Display a Clear Confirmation of Each Purchasing Step

An online action without a response can make your customers anxious. Let's say a customer completes a checkout. From their perspective, what would you expect to receive after that? Naturally, you will look for the order acknowledgment, shipment notifications, invoice, and item receipt.

Without these things, your customer won't be able to sleep at night trying to guess if their purchase went through successfully. So keep this in mind as you work on your eCommerce transaction systems.

amazon sales tax exemption program - amazon sales tax exempt items - mobile shopping confirmation concept

Tip #2: Establish and Communicate Purchase Policies Internally

When it comes to the company's financial matters like policies and processes, every employee must understand how they work. Doing this can help prevent financial issues, regardless of whether they're directly or indirectly involved.

It's not ideal to just set the rules and let them comprehend things on their own. Instead, ensure everyone understands the systems step-by-step and in detail. Some examples include order approvals, purchase agreements, product information management, and many more.

Tip #3: Set Realistic Goals and Monitor KPIs

It's important to hold productive discussions about the purchasing process to ensure its success. What do you want to track? What are some realistic expectations and limitations you want to set? How are you going to achieve them? The answers are called specific, measurable, achievable, relevant, and time-bound (SMART) goals.

You set and monitor KPIs to achieve these SMART goals. Some examples of aspects you can track are cost savings, average time for delivery, purchasing cycle, supplier lead, and the average cost of a purchase order.

amazon sales tax exemption program - amazon sales tax exempt

Tip #4: Enroll for Amazon Tax Exemption

If you're an Amazon seller, you can qualify for a sales tax exemption. Individuals and businesses can make Amazon sales tax-exempt purchases using the ATEP. Here are some rules for you to quickly understand who is eligible for it:

  • Must be enrolled in the ATEP.
  • Available for sellers who use the Tax Calculation Service to approve buyer exemptions.
  • Buyers should also be enrolled in the ATEP for acceptance of exemptions.
  • Amazon sales tax-exempt items only apply to purchases sold by Amazon, Amazon's affiliates, and independent third-party seller participants.

How to apply for tax exemption on Amazon? You can find a thorough guide on the enrollment process in the Amazon Tax Exemption Wizard.

But how do you associate it with optimizing the purchase process? Tax-free products are a benefit to the company and its customers. That being said, it doesn't apply to everyone, so you have to make it clear to your buyers.

For example, optimize your product tags or create a page about ATEP on your eCommerce website. This way, your Amazon customers will not get confused about the purchasing process.

Learn the Ropes of Running Your Amazon Business in the Financial Aspect With Unloop

The purchasing process can be tough work. However, it's a crucial aspect of financial management, especially for Amazon accounting. You can make the company workload lighter and more organized when done correctly, while providing a better customer experience. Consequently, you get fewer returns, fewer order issues, and reduced financial stress.

Still, it's easier said than done. For startups and small businesses venturing into the eCommerce world, this can be quite overwhelming. All kinds of costs involved have to be organized to analyze and forecast the company's financial state. Working on these will require efficient business bookkeeping and accounting.
But don't worry! If you find financial management difficult, Unloop can help you improve. We offer bookkeeping, income tax, and Quickbooks eCommerce sales tax services together with partner accounting firms. Whether you're looking for bookkeeping help, better financial management practices, or simply trying to overcome the challenges of eCommerce, we’ve got your back.

How Much Is in Your Amazon Cart? Optimizing the Purchase Process and the Amazon Sales Tax Exemption Program
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.

It's no secret that people are shopping more on Amazon. This is because they offer competitive prices and items that are delivered right to your door. But more treats are waiting for both Amazon buyers and sellers. One of them is a very important benefit: saving money.

You might not be knowledgeable enough to know how easy it is to save money with a seamless buying process. This article will discuss tips for optimizing the purchase process, including the Amazon Sales Tax Exemption Program (ATEP).

How Does an Optimized Buying Process Help Your Business?

A good business does its best to provide customers with a great purchasing experience. Without consumers, the business won't be there in the first place. Moreover, an easy and fair transaction process reduces questions or doubts from your customers.

Financially, it saves and earns you a lot of money. An optimized buying process reduces the likelihood of product returns. Returns can hurt the business's profit, so providing a good customer experience can minimize financial loss. It also shows you've gained customer trust and satisfaction.

Five Tips on Optimizing the Purchasing Process

Now that you know how important it is to provide a smooth purchasing process, here are some tips on optimizing the buying experience. Additionally, we'll introduce you to the ATEP feature from Amazon for tax-free and unquestionable purchases.

Tip #1: Display a Clear Confirmation of Each Purchasing Step

An online action without a response can make your customers anxious. Let's say a customer completes a checkout. From their perspective, what would you expect to receive after that? Naturally, you will look for the order acknowledgment, shipment notifications, invoice, and item receipt.

Without these things, your customer won't be able to sleep at night trying to guess if their purchase went through successfully. So keep this in mind as you work on your eCommerce transaction systems.

amazon sales tax exemption program - amazon sales tax exempt items - mobile shopping confirmation concept

Tip #2: Establish and Communicate Purchase Policies Internally

When it comes to the company's financial matters like policies and processes, every employee must understand how they work. Doing this can help prevent financial issues, regardless of whether they're directly or indirectly involved.

It's not ideal to just set the rules and let them comprehend things on their own. Instead, ensure everyone understands the systems step-by-step and in detail. Some examples include order approvals, purchase agreements, product information management, and many more.

Tip #3: Set Realistic Goals and Monitor KPIs

It's important to hold productive discussions about the purchasing process to ensure its success. What do you want to track? What are some realistic expectations and limitations you want to set? How are you going to achieve them? The answers are called specific, measurable, achievable, relevant, and time-bound (SMART) goals.

You set and monitor KPIs to achieve these SMART goals. Some examples of aspects you can track are cost savings, average time for delivery, purchasing cycle, supplier lead, and the average cost of a purchase order.

amazon sales tax exemption program - amazon sales tax exempt

Tip #4: Enroll for Amazon Tax Exemption

If you're an Amazon seller, you can qualify for a sales tax exemption. Individuals and businesses can make Amazon sales tax-exempt purchases using the ATEP. Here are some rules for you to quickly understand who is eligible for it:

  • Must be enrolled in the ATEP.
  • Available for sellers who use the Tax Calculation Service to approve buyer exemptions.
  • Buyers should also be enrolled in the ATEP for acceptance of exemptions.
  • Amazon sales tax-exempt items only apply to purchases sold by Amazon, Amazon's affiliates, and independent third-party seller participants.

How to apply for tax exemption on Amazon? You can find a thorough guide on the enrollment process in the Amazon Tax Exemption Wizard.

But how do you associate it with optimizing the purchase process? Tax-free products are a benefit to the company and its customers. That being said, it doesn't apply to everyone, so you have to make it clear to your buyers.

For example, optimize your product tags or create a page about ATEP on your eCommerce website. This way, your Amazon customers will not get confused about the purchasing process.

Learn the Ropes of Running Your Amazon Business in the Financial Aspect With Unloop

The purchasing process can be tough work. However, it's a crucial aspect of financial management, especially for Amazon accounting. You can make the company workload lighter and more organized when done correctly, while providing a better customer experience. Consequently, you get fewer returns, fewer order issues, and reduced financial stress.

Still, it's easier said than done. For startups and small businesses venturing into the eCommerce world, this can be quite overwhelming. All kinds of costs involved have to be organized to analyze and forecast the company's financial state. Working on these will require efficient business bookkeeping and accounting.
But don't worry! If you find financial management difficult, Unloop can help you improve. We offer bookkeeping, income tax, and Quickbooks eCommerce sales tax services together with partner accounting firms. Whether you're looking for bookkeeping help, better financial management practices, or simply trying to overcome the challenges of eCommerce, we’ve got your back.

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.

Amazon taxes are a tricky subject. There is the gray area of international taxation and how it can impact your business in Canada, or anywhere else you might be doing business. This post will help you understand what you need to know about Amazon taxes for sellers, why they matter, and how to ensure that your business is compliant with the tax code.

As an Amazon seller, you are responsible for managing your tax obligations. This includes filing and paying estimated taxes and remitting any balance of GST/HST collected on sales to the Canada Revenue Agency (CRA). You need to undertake various processes in order to report and pay your tax liabilities.

Scroll deeper and dive into the Canadian tax landscape as it relates to Amazon sellers.

Understanding GST, PST, HST, and Other Requirements for Non-Resident Sellers

If you are a non-resident who wants to sell in Canada, it is very important for you to know the ins and outs of the Canadian tax system. Not actually from cover to cover, but having the basic knowledge will give you a strong understanding of the Canadian tax landscape for your Amazon business taxes. You can always consult an accountant or firm like Unloop to help you with your Amazon taxes.

With the exemption on necessities such as food and medical supplies, most products and services in Canada are taxable. As mentioned earlier, CRA collects and sets the federal and provincial sales taxes. Once you sell goods in Canada, you are responsible for paying taxes, custom clearance fees, and destination duties before the products can be stored in an Amazon warehouse or sold to Canadian residents. In case you sell imported items, you or your agent must register as Importer of Record on customs declarations before shipping your goods to a Canadian address or fulfilment center.

Amazon logo

A non-resident importer who wants to sell on Amazon.ca should interact with the Canada Border Services Agency (CBSA) and CRA using legit business numbers. You can acquire this Business Number (BN) from CRA before you import products into Canada. BN is composed of 15 digits with nine numbers identifying your business and two letters plus four numbers for the program and business account.

Here are the steps you need to do to apply for a BN:

  1. Call 1-800-959-5525 to register or add an import-export account. You can also register online or by filling out Form RC1 for a BN request. File the accomplished form in the nearest tax center.
  2. CBSA will provide a free account as soon as the agency receives the request form.
  3. Then provide your import-export account on your customs documents which also applies to most shipments in Canada.

NOTE: You can only use your unique import-export account for importing and exporting.

Imported goods are subjected to a 5% effective tax rate. On top of that, a duty rate is added to the total value of goods if applicable.

The Federal and Provincial Sales Taxes

Remember that Canada has three types of sales taxes: the federal goods and services tax (GST), provincial sales tax (PST) and harmonized sales tax (HST). HST is the sum of GST and PST. Thus you have a basic formula of GST + PST = HST.

Refer to the table below and familiarize yourself with the taxes applicable in every Canadian territory and province.

Sales Tax TypeTerritories/Provinces
GST OnlyAlberta, Nunavut, Northwest Territories, Yukon (5%)
GST and PSTBritish Columbia (5% GST + 7% PST)Manitoba (5% GST + 7% PST)Quebec (5% GST + 9.975% QST or Quebec Sales Tax)Saskatchewan (5% GST + 6% PST)
HSTOntario (13%)New Brunswick (15%)Newfoundland (15%)Nova Scotia (15%)Prince Edward Island (15%)

NOTE: Sales on Amazon.ca may be subjected to GST, PST or HST if you meet the federal or provincial sales tax requirements. You are required to collect GST, PST, or HST even if you don't have a nexus in Canada or a particular province. Nexus is your physical or economic presence in a specific territory. You are legally required to collect, report, and remit sales taxes to the appropriate tax authorities when you reach annual sales of $30,000.

As per the sales tax table, five Canadian provinces have HST reporting requirements which means just a single sales tax return. However, British Columbia, Manitoba, and Saskatchewan need to report GST and PST separately. You need to also separately register for PST in non-HST provinces if you have to collect sales taxes in those provinces.

Amazon at court

Sales Tax Filing

The filing of sales tax returns varies from the province and the total accumulated sales. Sales taxes are filed and paid on a yearly basis. Federal tax returns are due yearly if your annual sales are less than $1.5 million. Manitoba has a yearly sales threshold of $75,000, while Saskatchewan has a threshold of $60,000. British Columbia mandates monthly filing during the first year of business operation no matter what your sales volume is. However, it allows yearly filing after the first year as long as tax liabilities are filed and paid on time. The limit is different for each province that doesn't participate in the HST approach with the federal government.

The due date for filing sales tax returns is set according to the reporting period. It usually takes one to three months after the said period. If you pay your sales tax annually, the filing must be no later than 90 days after the end of the reporting period. If the sales tax is reported more frequently, like monthly or quarterly, filing should be done by the end of the succeeding month.

Amazon Filing

Amazon Canada does not file or pay sales taxes, unlike Amazon US. However, Amazon.ca collects and sends the sales tax as part of the regular settlement. Sellers must file and remit Amazon estimated taxes to the appropriate provincial tax authorities. If you sell directly in Canada, you have to bill Canadian consumers for sales tax. Then you need to collect, file, and pay taxes to the government.

Final Thoughts

It is essential to know how the Canadian tax policy works. As an Amazon seller, you have to be responsible and pay your Amazon taxes if it's applicable; this segregates your profit better. Now that you understand the Canadian tax law, you can do your business right, starting from registration to CBSA and CRA, and up to reporting and filing your sales tax returns. You also have the rates that will guide you if you want to do a mock computation of the sales tax. Remember to be vigilant about the tax rates because CRA can change the rate annually.

Although it sounds complicated, it needs to be done. Tax avoidance will just lead you to a very difficult situation. Always report and pay your taxes on time.
Are you looking for help with your sales tax?

Read Easy Accounting: File Your Income Tax Return in Canada With the Help of a CPA and find out how a Certified Chartered Accountant (CPA) makes things easier for you during tax season.

Amazon Taxes: Diving Into the Canadian Tax Landscape
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.

Amazon taxes are a tricky subject. There is the gray area of international taxation and how it can impact your business in Canada, or anywhere else you might be doing business. This post will help you understand what you need to know about Amazon taxes for sellers, why they matter, and how to ensure that your business is compliant with the tax code.

As an Amazon seller, you are responsible for managing your tax obligations. This includes filing and paying estimated taxes and remitting any balance of GST/HST collected on sales to the Canada Revenue Agency (CRA). You need to undertake various processes in order to report and pay your tax liabilities.

Scroll deeper and dive into the Canadian tax landscape as it relates to Amazon sellers.

Understanding GST, PST, HST, and Other Requirements for Non-Resident Sellers

If you are a non-resident who wants to sell in Canada, it is very important for you to know the ins and outs of the Canadian tax system. Not actually from cover to cover, but having the basic knowledge will give you a strong understanding of the Canadian tax landscape for your Amazon business taxes. You can always consult an accountant or firm like Unloop to help you with your Amazon taxes.

With the exemption on necessities such as food and medical supplies, most products and services in Canada are taxable. As mentioned earlier, CRA collects and sets the federal and provincial sales taxes. Once you sell goods in Canada, you are responsible for paying taxes, custom clearance fees, and destination duties before the products can be stored in an Amazon warehouse or sold to Canadian residents. In case you sell imported items, you or your agent must register as Importer of Record on customs declarations before shipping your goods to a Canadian address or fulfilment center.

Amazon logo

A non-resident importer who wants to sell on Amazon.ca should interact with the Canada Border Services Agency (CBSA) and CRA using legit business numbers. You can acquire this Business Number (BN) from CRA before you import products into Canada. BN is composed of 15 digits with nine numbers identifying your business and two letters plus four numbers for the program and business account.

Here are the steps you need to do to apply for a BN:

  1. Call 1-800-959-5525 to register or add an import-export account. You can also register online or by filling out Form RC1 for a BN request. File the accomplished form in the nearest tax center.
  2. CBSA will provide a free account as soon as the agency receives the request form.
  3. Then provide your import-export account on your customs documents which also applies to most shipments in Canada.

NOTE: You can only use your unique import-export account for importing and exporting.

Imported goods are subjected to a 5% effective tax rate. On top of that, a duty rate is added to the total value of goods if applicable.

The Federal and Provincial Sales Taxes

Remember that Canada has three types of sales taxes: the federal goods and services tax (GST), provincial sales tax (PST) and harmonized sales tax (HST). HST is the sum of GST and PST. Thus you have a basic formula of GST + PST = HST.

Refer to the table below and familiarize yourself with the taxes applicable in every Canadian territory and province.

Sales Tax TypeTerritories/Provinces
GST OnlyAlberta, Nunavut, Northwest Territories, Yukon (5%)
GST and PSTBritish Columbia (5% GST + 7% PST)Manitoba (5% GST + 7% PST)Quebec (5% GST + 9.975% QST or Quebec Sales Tax)Saskatchewan (5% GST + 6% PST)
HSTOntario (13%)New Brunswick (15%)Newfoundland (15%)Nova Scotia (15%)Prince Edward Island (15%)

NOTE: Sales on Amazon.ca may be subjected to GST, PST or HST if you meet the federal or provincial sales tax requirements. You are required to collect GST, PST, or HST even if you don't have a nexus in Canada or a particular province. Nexus is your physical or economic presence in a specific territory. You are legally required to collect, report, and remit sales taxes to the appropriate tax authorities when you reach annual sales of $30,000.

As per the sales tax table, five Canadian provinces have HST reporting requirements which means just a single sales tax return. However, British Columbia, Manitoba, and Saskatchewan need to report GST and PST separately. You need to also separately register for PST in non-HST provinces if you have to collect sales taxes in those provinces.

Amazon at court

Sales Tax Filing

The filing of sales tax returns varies from the province and the total accumulated sales. Sales taxes are filed and paid on a yearly basis. Federal tax returns are due yearly if your annual sales are less than $1.5 million. Manitoba has a yearly sales threshold of $75,000, while Saskatchewan has a threshold of $60,000. British Columbia mandates monthly filing during the first year of business operation no matter what your sales volume is. However, it allows yearly filing after the first year as long as tax liabilities are filed and paid on time. The limit is different for each province that doesn't participate in the HST approach with the federal government.

The due date for filing sales tax returns is set according to the reporting period. It usually takes one to three months after the said period. If you pay your sales tax annually, the filing must be no later than 90 days after the end of the reporting period. If the sales tax is reported more frequently, like monthly or quarterly, filing should be done by the end of the succeeding month.

Amazon Filing

Amazon Canada does not file or pay sales taxes, unlike Amazon US. However, Amazon.ca collects and sends the sales tax as part of the regular settlement. Sellers must file and remit Amazon estimated taxes to the appropriate provincial tax authorities. If you sell directly in Canada, you have to bill Canadian consumers for sales tax. Then you need to collect, file, and pay taxes to the government.

Final Thoughts

It is essential to know how the Canadian tax policy works. As an Amazon seller, you have to be responsible and pay your Amazon taxes if it's applicable; this segregates your profit better. Now that you understand the Canadian tax law, you can do your business right, starting from registration to CBSA and CRA, and up to reporting and filing your sales tax returns. You also have the rates that will guide you if you want to do a mock computation of the sales tax. Remember to be vigilant about the tax rates because CRA can change the rate annually.

Although it sounds complicated, it needs to be done. Tax avoidance will just lead you to a very difficult situation. Always report and pay your taxes on time.
Are you looking for help with your sales tax?

Read Easy Accounting: File Your Income Tax Return in Canada With the Help of a CPA and find out how a Certified Chartered Accountant (CPA) makes things easier for you during tax season.

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 struggling to streamline your finances? Hiring remote bookkeeping services could be the perfect solution for you! Expanding technology has made it easier for business owners to find skilled professionals who can manage financial tasks from a distance.

By opting for online bookkeeping services, you can save time, money, and resources that can be better focused on growing your venture. Imagine the convenience of having a bookkeeper who can update, track, and manage your financial affairs without needing a physical presence in your office. Sounds innovative!

If you’re eager to do hassle-free financial management, here is comprehensive information on hiring an online bookkeeping service. 

Are Virtual Bookkeeping Services In Demand?

Occupational TitleEmployment, 2021Job Openings Each YearProjected Employment, 2031Change, 2021-2031
Bookkeeping, accounting, auditing clerks
1,707,800

197,600

1,630,600

-5%

Source: Bureau of Labor Statistics

Based on the data provided by the Bureau of Labor Statistics, it is evident that the decrease in demand for traditional financial workers such as bookkeeping, accounting, and auditing is a direct result of technological advancements. A growing preference for online bookkeeping and accounting services accompanies this shift. 

Technological changes improved efficiency by automating tasks and reducing the required manual data entry and primary bookkeeping workforce. Using accounting software and employing seamless collaborations also enabled virtual accountants to concentrate on delivering specialized financial support.

Are Online Bookkeeping Services Recommended for Small Businesses?

While big companies may have the resources to hire an entire accounting firm, small business owners often face budget constraints and limited staff. So, yes! Online bookkeeping services can be a cost-effective and efficient solution for small enterprises to manage their finances effectively.

Instead of hiring a full-time in-house bookkeeper, which can be costly in terms of salaries, benefits, and office space, outsourced bookkeeping services save on expenses associated with maintaining an internal employee.

Financial management expertise is also on the list of benefits when hiring a virtual bookkeeping service. They are well-versed in payroll services, bookkeeping software, and industry best practices. With their knowledge, small businesses can ensure accurate financial data, proper record-keeping, and compliance with financial regulations. 

And with the burden of bookkeeping lifted, small firms can focus on their core operations, make informed financial decisions, and contribute to the growth and success of their business.

The Benefits of Hiring the Best Online Bookkeeping Services

Everyone knows the hassle of handling business operations, regardless of size. From regularly running the place to managing employee salaries, monthly expenses, investments, tax services, financial statements, and advertising, there are a lot of duties to address. If you're not well adept at this kind of work, it can be a catalyst for the downfall of your venture.

Luckily, you can now offload the burden with the advent of online services. Not only can you automate many aspects of your business, but they can also offer a wide range of solutions tailored to your specific needs.

It starts with collaborating with the best virtual bookkeeping services. But how can you say they are the right fit for you? Take a look at the essential benefits they can offer: 

Detailed Recording

Money comes in and out almost every day. You employ it in your manufacturing process, and clients return it to you when they buy products or pay for services. Sometimes, keeping track of all the financial transactions around you poses challenges.

From accounts payable to accounts receivable, the ideal bookkeeping service will keep a detailed record of all financial statements that happen in your company. They can also do this process more efficiently, constantly updating you with accurate gains and expenses.

Secured Financial Data

It's only natural to ask yourself, "Are online bookkeeping services secure?" Rest assured, they prioritize the security of sensitive financial information.

The best bookkeeping service implements robust security measures to protect your financial data. They use advanced encryption technology and state-of-the-art security protocols to keep the transmission and storage of your financial details inaccessible to unauthorized people.

This commitment to data security provides you with the peace of mind you deserve, knowing your financial information is in safe hands.

Strategic Planning

Sometimes you have to add more or cut short supplies to meet consumer demands. That’s where a dedicated bookkeeper can facilitate your strategic planning efforts.

A competent virtual bookkeeper can provide in-depth financial forecasts and projections, leveraging the convenience of online platforms. With their help, you can easily predict the outcome for the coming months and carefully plan to avoid any loss. 

They can also deliver accurate predictions regarding future demand and supply requirements by analyzing patterns and trends in your financial data.

Instant Financial Reports 

Even small businesses have a group of investors that help build and run the business. As the owner, it’s your responsibility to keep them informed on every detail. 

Fortunately, the best online bookkeepers will update you on monthly financial reports. These documents provide an overview of the company’s performance, including the balance sheet, income statement, and cash flow statement.

You can instantly view and download the reports through secure online platforms whenever needed. You can also share these financial reports with the involved parties, informing them about your current performance and progress.

Law Abiding 

A professional bookkeeper will always strive to meet the latest legal regulations. Given the advantage of virtual work arrangements, they can efficiently fulfill their obligations in meeting legal standards.

Being well-versed in accounting and financial regulations, they can stay abreast of any law changes that may impact business finances. They know the tax filing laws, reporting requirements, and relevant rules specific to your industry or region.

Virtual bookkeepers can also remotely discuss the timely submission of necessary documents and compliance with legal deadlines. There is no need for in-person meetings through real-time discussions, video conferences, or messaging.

Tax-Ready Financials

A reputable bookkeeping firm knows how to file your tax returns. They understand the changes in tax codes, deductions, credits, and other important information about optimizing your tax position.

In addition to the technical aspects of tax preparation services, bookkeeping firms can also offer valuable sales tax advice. They can assess your financial situation, identify potential deductions or credits that apply to your business, and provide recommendations to help you stay in good standing with tax authorities.

Bank Reconciliation

Reconciling your bank accounts is critical to maintaining accurate financial records. Remote bookkeeping services make this process simple and efficient.

They automatically sync your bank transactions with your accounting software, helping you identify discrepancies and ensuring all entries are accounted for. This way, you'll have a clear picture of your financial health and be able to make better-informed financial decisions.

Simplified Invoice and Bill Pay

With remote bookkeeping services, you can easily manage and track your invoices, ensuring you get paid on time. Plus, paying your bills becomes a breeze as most platforms offer automated bill pay options to ensure you never miss a deadline. Say goodbye to late fees and hello to improved cash flow!

Where Can You Find the Best Online Bookkeeping Service?

Are you searching for an agency that offers the expertise of a dedicated accountant and bookkeeper? Look no further than Unloop. We can help you shed light on the essentials and carve a path to success.

We can handle your finances smoothly and give fresh insight to develop your business. All you have to do is choose your plan, and a professional bookkeeper will be on board with you. From there, all your finances are accounted for, and you will receive regular updates about the performance of your company and financial analysis reports. 

When you decide to partner with us, our bookkeeping package includes the following: 

📅Monthly updates on income and cash flow statements as well as balance sheets 
💻Hubdoc, DEXT, Quickbooks Online, or Xero subscriptions.
🤓Endless experts supporting your business’s financial accounts and tax advice
📧An open line of communication with your bookkeeper on Slack or other messaging apps 

Choose Unloop Today!

There’s so much more to learn when you start a business; from management, budgeting, and payroll processing to finances—you must be focused and hands-on with all aspects to expand and reach success. Subscribing to remote bookkeeping services to handle your assets, investments, and financial records will be crucial to your growth.

Unloop wants to help build your empire and generate more income. That is why we’re giving you the best financial ecommerce services at the most affordable price. Book a call now, and let’s discuss the perfect plan for your business!

What Are the Advantages of Hiring Remote Bookkeeping Services?
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 struggling to streamline your finances? Hiring remote bookkeeping services could be the perfect solution for you! Expanding technology has made it easier for business owners to find skilled professionals who can manage financial tasks from a distance.

By opting for online bookkeeping services, you can save time, money, and resources that can be better focused on growing your venture. Imagine the convenience of having a bookkeeper who can update, track, and manage your financial affairs without needing a physical presence in your office. Sounds innovative!

If you’re eager to do hassle-free financial management, here is comprehensive information on hiring an online bookkeeping service. 

Are Virtual Bookkeeping Services In Demand?

Occupational TitleEmployment, 2021Job Openings Each YearProjected Employment, 2031Change, 2021-2031
Bookkeeping, accounting, auditing clerks
1,707,800

197,600

1,630,600

-5%

Source: Bureau of Labor Statistics

Based on the data provided by the Bureau of Labor Statistics, it is evident that the decrease in demand for traditional financial workers such as bookkeeping, accounting, and auditing is a direct result of technological advancements. A growing preference for online bookkeeping and accounting services accompanies this shift. 

Technological changes improved efficiency by automating tasks and reducing the required manual data entry and primary bookkeeping workforce. Using accounting software and employing seamless collaborations also enabled virtual accountants to concentrate on delivering specialized financial support.

Are Online Bookkeeping Services Recommended for Small Businesses?

While big companies may have the resources to hire an entire accounting firm, small business owners often face budget constraints and limited staff. So, yes! Online bookkeeping services can be a cost-effective and efficient solution for small enterprises to manage their finances effectively.

Instead of hiring a full-time in-house bookkeeper, which can be costly in terms of salaries, benefits, and office space, outsourced bookkeeping services save on expenses associated with maintaining an internal employee.

Financial management expertise is also on the list of benefits when hiring a virtual bookkeeping service. They are well-versed in payroll services, bookkeeping software, and industry best practices. With their knowledge, small businesses can ensure accurate financial data, proper record-keeping, and compliance with financial regulations. 

And with the burden of bookkeeping lifted, small firms can focus on their core operations, make informed financial decisions, and contribute to the growth and success of their business.

The Benefits of Hiring the Best Online Bookkeeping Services

Everyone knows the hassle of handling business operations, regardless of size. From regularly running the place to managing employee salaries, monthly expenses, investments, tax services, financial statements, and advertising, there are a lot of duties to address. If you're not well adept at this kind of work, it can be a catalyst for the downfall of your venture.

Luckily, you can now offload the burden with the advent of online services. Not only can you automate many aspects of your business, but they can also offer a wide range of solutions tailored to your specific needs.

It starts with collaborating with the best virtual bookkeeping services. But how can you say they are the right fit for you? Take a look at the essential benefits they can offer: 

Detailed Recording

Money comes in and out almost every day. You employ it in your manufacturing process, and clients return it to you when they buy products or pay for services. Sometimes, keeping track of all the financial transactions around you poses challenges.

From accounts payable to accounts receivable, the ideal bookkeeping service will keep a detailed record of all financial statements that happen in your company. They can also do this process more efficiently, constantly updating you with accurate gains and expenses.

Secured Financial Data

It's only natural to ask yourself, "Are online bookkeeping services secure?" Rest assured, they prioritize the security of sensitive financial information.

The best bookkeeping service implements robust security measures to protect your financial data. They use advanced encryption technology and state-of-the-art security protocols to keep the transmission and storage of your financial details inaccessible to unauthorized people.

This commitment to data security provides you with the peace of mind you deserve, knowing your financial information is in safe hands.

Strategic Planning

Sometimes you have to add more or cut short supplies to meet consumer demands. That’s where a dedicated bookkeeper can facilitate your strategic planning efforts.

A competent virtual bookkeeper can provide in-depth financial forecasts and projections, leveraging the convenience of online platforms. With their help, you can easily predict the outcome for the coming months and carefully plan to avoid any loss. 

They can also deliver accurate predictions regarding future demand and supply requirements by analyzing patterns and trends in your financial data.

Instant Financial Reports 

Even small businesses have a group of investors that help build and run the business. As the owner, it’s your responsibility to keep them informed on every detail. 

Fortunately, the best online bookkeepers will update you on monthly financial reports. These documents provide an overview of the company’s performance, including the balance sheet, income statement, and cash flow statement.

You can instantly view and download the reports through secure online platforms whenever needed. You can also share these financial reports with the involved parties, informing them about your current performance and progress.

Law Abiding 

A professional bookkeeper will always strive to meet the latest legal regulations. Given the advantage of virtual work arrangements, they can efficiently fulfill their obligations in meeting legal standards.

Being well-versed in accounting and financial regulations, they can stay abreast of any law changes that may impact business finances. They know the tax filing laws, reporting requirements, and relevant rules specific to your industry or region.

Virtual bookkeepers can also remotely discuss the timely submission of necessary documents and compliance with legal deadlines. There is no need for in-person meetings through real-time discussions, video conferences, or messaging.

Tax-Ready Financials

A reputable bookkeeping firm knows how to file your tax returns. They understand the changes in tax codes, deductions, credits, and other important information about optimizing your tax position.

In addition to the technical aspects of tax preparation services, bookkeeping firms can also offer valuable sales tax advice. They can assess your financial situation, identify potential deductions or credits that apply to your business, and provide recommendations to help you stay in good standing with tax authorities.

Bank Reconciliation

Reconciling your bank accounts is critical to maintaining accurate financial records. Remote bookkeeping services make this process simple and efficient.

They automatically sync your bank transactions with your accounting software, helping you identify discrepancies and ensuring all entries are accounted for. This way, you'll have a clear picture of your financial health and be able to make better-informed financial decisions.

Simplified Invoice and Bill Pay

With remote bookkeeping services, you can easily manage and track your invoices, ensuring you get paid on time. Plus, paying your bills becomes a breeze as most platforms offer automated bill pay options to ensure you never miss a deadline. Say goodbye to late fees and hello to improved cash flow!

Where Can You Find the Best Online Bookkeeping Service?

Are you searching for an agency that offers the expertise of a dedicated accountant and bookkeeper? Look no further than Unloop. We can help you shed light on the essentials and carve a path to success.

We can handle your finances smoothly and give fresh insight to develop your business. All you have to do is choose your plan, and a professional bookkeeper will be on board with you. From there, all your finances are accounted for, and you will receive regular updates about the performance of your company and financial analysis reports. 

When you decide to partner with us, our bookkeeping package includes the following: 

📅Monthly updates on income and cash flow statements as well as balance sheets 
💻Hubdoc, DEXT, Quickbooks Online, or Xero subscriptions.
🤓Endless experts supporting your business’s financial accounts and tax advice
📧An open line of communication with your bookkeeper on Slack or other messaging apps 

Choose Unloop Today!

There’s so much more to learn when you start a business; from management, budgeting, and payroll processing to finances—you must be focused and hands-on with all aspects to expand and reach success. Subscribing to remote bookkeeping services to handle your assets, investments, and financial records will be crucial to your growth.

Unloop wants to help build your empire and generate more income. That is why we’re giving you the best financial ecommerce services at the most affordable price. Book a call now, and let’s discuss the perfect plan for your business!

Read more

You may find it increasingly difficult to keep up with the fast pace of transactions on Amazon. Tracking revenues, expenses, and inventory can be a burden when fulfilling hundreds of orders daily. Fortunately, this is where accounting software for Amazon sellers can seamlessly automate your finances.

Running an ecommerce business often leads to concerns about accounting and bookkeeping, but you can streamline these tasks and maximize efficiency with the right tools and software. If you want to gain clarity on this concept, read on!

Why Accounting Software for Amazon Sellers Is a Must

Ecommerce sellers like yourself know how bookkeeping and accounting can divert your time and attention from core business strategies. But there’s a game-changing solution that can transform the way you manage finances—a quality accounting software specifically designed for Amazon business owners

Embracing innovative software like this is no longer a choice; it has become necessary for thriving in this competitive marketplace. Here's what you'll find if you try to explore the intricacies of accounting software.

1. Basic Accounting

Ecommerce businesses need to stay financially sound. As such, you must keep track of your accounts payables and receivables and maintain a general ledger for all things money-related. If you are busy being a hands-on business owner, you need help crunching the numbers.

The basic functions of accounting software include ensuring your financial statements are accurate down to a cent. You can expect this bare minimum feature from any Amazon accounting software. You can also delete and forget about the Google Sheet files you had for bookkeeping and let the accounting software take the burden off your shoulders.

2. Automated Invoicing

A good business owner won’t neglect to issue detailed invoices. Unfortunately, the Amazon marketplace can get hectic, causing an Amazon seller to unintentionally fail to issue invoices or provide inaccurate ones. 

Inconsistent invoicing is a big no-no if you want to keep your books clean and up-to-date. You know how important it is to keep a paper trail of everything in and out of your business, right?

Luckily, accounting software has impeccable and seamless integration with the Amazon platform. They can now generate all your invoices error-free and up-to-date, which can help you maintain reliable financial records.

3. Sales Tax

Tracking sales tax involves untangling a messy web of applicable tax laws. It can be confusing because you must account for everything, including the type of item, order fulfillment date, location, and recipients.

Traditionally, relying on an individual with an accounting background has been the go-to option for handling tax-related tasks. Now, you can depend on software to do the necessary prep work. It automatically filters and computes the applicable tax rates so you can collect the appropriate amount from your buyers. 

It also does all the paperwork, from sales tax summaries to comprehensive financial reports. So, when tax season comes, you can easily work with your Amazon accountant to file tax returns.

4. Amazon Marketplace Fee Management

Depending on your business strategy, you may opt for one of Amazon's two selling plans: individual and professional. But regardless of your chosen selling plan, Amazon will still charge additional fees. Dealing with multiple fees can be confusing, so an accounting tool will be beneficial.

Amazon accounting software can handle fee management tasks within your Amazon Seller Central account. It calculates how much you have to pay per item, including referral fees, fulfillment fees, long-term storage fees, and other applicable fees. You can even forecast the money you need for such fees based on your small business' performance.

5. Inventory Management

Do you know how many units of each product you have left? 

Inventory tracking can be tricky, especially when you have other business-related tasks. It's your job to keep your inventory levels in check. You also need to anticipate the spike in demand to avoid missing out on potential revenue and keep the momentum going.  

Accounting software can do this for you while also keeping track of where your items are. It ensures real-time visibility into the quantities of each product available. It can optimize stock levels by anticipating demand fluctuations, preventing stockouts, and reducing the risk of overstocking.

Amazon Data to Track With an Accounting Software

Aside from inventory and sales tax, here are variables and details Amazon accounting software can track and manage for you:

An infographic showing essential data tracked through accounting software for Amazon sellers.

From monitoring Amazon sales to tracking advertising spend, having access to these important data points is truly impressive. With such insights, you can confidently make smarter decisions and unlock your business’s full potential like never before.

7 Mistakes When Picking an Amazon Accounting Software

Sadly, some businesses make many mistakes in picking the tool they’ll use for financial management. While the situation is understandable, it should not be the case. Knowing these mistakes, you can proactively avoid them and pick the best accounting tool.

Mistake #1: Not Knowing Its Purpose

Beginner Amazon sellers often commit this mistake as they learn the ropes of selling on the platform. Their minds are occupied with many things, and they juggle a plate full of tasks to boost monthly sales. Amidst all this, they forget that establishing clear goals matters when choosing software.

Mistake #2: Economical Selection

Financial prudence is normal, particularly for startup business owners. They see to it that they invest in the right resources. Hence, some resort to free accounting software to save money. 

The truth is prioritizing cost over features is not always the best option. Cheap tools may allow you to save, but you won’t get the essentials. Think double-entry accounting, sales tax summaries, or detailed financial reporting.

Mistake #3: Limited Accessibility

Traditional accounting means having a computer where Excel sheets are saved or having software that users can access only on a single computer. Although this method worked before, it won’t be the same in today’s highly hybrid and global work setup

Such standard tools limit inventory tracking, financial reporting, sales tax report generation, and Amazon accounting because you and your team of accountants can only access data on-site.

Mistake #4: Underestimating Security

In connection with having on-site-only accessibility is the susceptibility of your business financial data to cyber-attacks and hacking.

While Excel sheets offer a less costly accounting method, they aren't readily backed up and are more prone to corruption.  

When files are corrupted, there is a high chance that users won’t be able to recover them. Computers are also more vulnerable to getting hacked, especially if you only have a password to protect your files.

Mistake #5: Restricted Database Storage

Amazon sellers like yourself mainly focus on the software’s accounts payable and accounts receivable capabilities and financial reporting tools. However, you need unlimited storage space to scale your business.

Neglecting this feature will lead you to eventually choose a new software and migrate your data there, which is both time— and money—consuming. 

Mistake #6: Accounting Software With Missing HR Features

As a business expands, so does the team behind it. This necessitates effectively tracking your employees’ time, projects, and performance. Not investing in accounting software with integrated HR features can lead to challenges in the long run. 

Mistake #7: Uncustomizable Software Features

We all know that accounting software templates offer many advantages, such as providing pre-made options in just a few clicks. You’ll have templates for different reports and generating invoices. But despite their convenience, there may be little to no room for personalization.

Customization is essential to make your Amazon accounting data more comprehensive. For instance, you can personalize your invoices for branding purposes. If the software you’re considering does not allow any customization, you’ll either have to be content with what you have or reinvest in customized software.

5 Best Practices in Choosing the Best Accounting Software for Amazon

Now that you know the most common mistakes when choosing software, you can be more careful when weighing your options. To dive in further, here are some best practices to remember before investing in Amazon accounting software. 

Check these tips out, especially if you have little to no Amazon accounting experience.

1. Choose a Cloud-Based Accounting Software 

With all your business's essential and confidential financial information, investing in cloud-based accounting software is only fitting. This technology guarantees cybersecurity, warding off hackers and data corruption. 

On top of security is the need for enough storage space. It is best to keep financial data in one place to make monitoring financial reports easier. Picking a Microsoft SQL server/MYSQL database-compatible tool will be a great choice in the long term. 

2. Consider Payment Gateways and Bank Integrations

You’ll cater to different customers that use various payment methods. To handle this seamlessly, you must have an accounting tool ready with various payment gateways. And by integrating your bank, you can monitor the money being deposited and withdrawn in your bank account in real-time.

3.  Ensure Device Optimization

The best Amazon accounting software offers both mobile and computer access. If updates need to be made, you can use either of the devices. The Internet is accessible almost anywhere, so checking your business's financial health is easier.

4.  Consider Role-Based Access

For additional security, look for software with role-based access. This enables only authorized users in your company to edit the data in your books. Since the tool operates on the cloud, real-time updates are automated for better collaboration.

5.  Pick a Scalable Plan

Excellent accounting software should have plans that fit every type of business. If you are signing up for a beginner plan, you must have the choice to add more accounting features to the software as you grow your venture.

3 Accounting Software Options for Amazon Sellers

So, in the sea of ecommerce bookkeeping and accounting tools out there, which is the best for Amazon sellers? We have three great options in mind. Here's what to expect from them.

1. QuickBooks Online

QuickBooks Online by Intuit remains the one-stop Amazon accounting solution for most businesses. The software has the following features:

Features of QuickBooks Online
Accounts Payable and Accounts Receivable
Cash Flow ManagementLive Bookkeeping
Payroll
Invoicing
Creation and Receipt of Payments
Bank Reconciliation
Inventory Management
Projects and Time Tracking
Training
Cloud Accounting

QuickBooks also offers different plans for your specific needs, making it flexible compared to its rivals. 

2. Xero

Another reliable accounting tool online sellers can use is Xero. With Xero, your bookkeeping and accounting tasks will be automated, and you can enjoy these functions:

Features of Xero
Income and Expense Tracking
Accounts Receivable and Payable
Payments and Invoicing
Bank Reconciliation
Time and Projects Tracking
Integration of Payroll Tools
Generation of Reports
Analytics
Sales Tax
Tracking
Inventory Management

Xero also operates on the cloud, so financial data is secure, mobile-friendly, and accessible to authorized individuals only.

3. Peachtree/Sage50 Cloud

Another software we recommend for your Amazon business is Peachtree or Sage50. Below are the reasons why:

Features of Peachtree or Sage50
Cash Flow Management
Payments and Banking
Time and Projects Tracking
Human Resource Management
Customer Relationship Management
Construction-Specific Accounting
Inventory Management
Enterprise Resource Planning
Creation of Professional Invoices
Detailed Financial Reports

Sage50 is one of the few software with specialized setups for specific industries.

Accounting for Amazon Sellers With Unloop

Even if you already have the best accounting software for Amazon sellers, know you can still get help when necessary. Unloop can handle your Amazon bookkeeping and accounting, get your numbers right, and use the most reliable ecommerce accounting software. 

We began as online retailers and sellers, so we completely understand what you’re going through and what you have to do. We have Amazon-specific accounting and bookkeeping solutions for your business. You won’t regret making this important decision because it will free up your hands and help you achieve your desired productivity.
If you are excited to start, book a call now and begin your Unloop journey!

Achieve Peak Productivity With Accounting Software for Amazon Sellers
Watch Now

You may find it increasingly difficult to keep up with the fast pace of transactions on Amazon. Tracking revenues, expenses, and inventory can be a burden when fulfilling hundreds of orders daily. Fortunately, this is where accounting software for Amazon sellers can seamlessly automate your finances.

Running an ecommerce business often leads to concerns about accounting and bookkeeping, but you can streamline these tasks and maximize efficiency with the right tools and software. If you want to gain clarity on this concept, read on!

Why Accounting Software for Amazon Sellers Is a Must

Ecommerce sellers like yourself know how bookkeeping and accounting can divert your time and attention from core business strategies. But there’s a game-changing solution that can transform the way you manage finances—a quality accounting software specifically designed for Amazon business owners

Embracing innovative software like this is no longer a choice; it has become necessary for thriving in this competitive marketplace. Here's what you'll find if you try to explore the intricacies of accounting software.

1. Basic Accounting

Ecommerce businesses need to stay financially sound. As such, you must keep track of your accounts payables and receivables and maintain a general ledger for all things money-related. If you are busy being a hands-on business owner, you need help crunching the numbers.

The basic functions of accounting software include ensuring your financial statements are accurate down to a cent. You can expect this bare minimum feature from any Amazon accounting software. You can also delete and forget about the Google Sheet files you had for bookkeeping and let the accounting software take the burden off your shoulders.

2. Automated Invoicing

A good business owner won’t neglect to issue detailed invoices. Unfortunately, the Amazon marketplace can get hectic, causing an Amazon seller to unintentionally fail to issue invoices or provide inaccurate ones. 

Inconsistent invoicing is a big no-no if you want to keep your books clean and up-to-date. You know how important it is to keep a paper trail of everything in and out of your business, right?

Luckily, accounting software has impeccable and seamless integration with the Amazon platform. They can now generate all your invoices error-free and up-to-date, which can help you maintain reliable financial records.

3. Sales Tax

Tracking sales tax involves untangling a messy web of applicable tax laws. It can be confusing because you must account for everything, including the type of item, order fulfillment date, location, and recipients.

Traditionally, relying on an individual with an accounting background has been the go-to option for handling tax-related tasks. Now, you can depend on software to do the necessary prep work. It automatically filters and computes the applicable tax rates so you can collect the appropriate amount from your buyers. 

It also does all the paperwork, from sales tax summaries to comprehensive financial reports. So, when tax season comes, you can easily work with your Amazon accountant to file tax returns.

4. Amazon Marketplace Fee Management

Depending on your business strategy, you may opt for one of Amazon's two selling plans: individual and professional. But regardless of your chosen selling plan, Amazon will still charge additional fees. Dealing with multiple fees can be confusing, so an accounting tool will be beneficial.

Amazon accounting software can handle fee management tasks within your Amazon Seller Central account. It calculates how much you have to pay per item, including referral fees, fulfillment fees, long-term storage fees, and other applicable fees. You can even forecast the money you need for such fees based on your small business' performance.

5. Inventory Management

Do you know how many units of each product you have left? 

Inventory tracking can be tricky, especially when you have other business-related tasks. It's your job to keep your inventory levels in check. You also need to anticipate the spike in demand to avoid missing out on potential revenue and keep the momentum going.  

Accounting software can do this for you while also keeping track of where your items are. It ensures real-time visibility into the quantities of each product available. It can optimize stock levels by anticipating demand fluctuations, preventing stockouts, and reducing the risk of overstocking.

Amazon Data to Track With an Accounting Software

Aside from inventory and sales tax, here are variables and details Amazon accounting software can track and manage for you:

An infographic showing essential data tracked through accounting software for Amazon sellers.

From monitoring Amazon sales to tracking advertising spend, having access to these important data points is truly impressive. With such insights, you can confidently make smarter decisions and unlock your business’s full potential like never before.

7 Mistakes When Picking an Amazon Accounting Software

Sadly, some businesses make many mistakes in picking the tool they’ll use for financial management. While the situation is understandable, it should not be the case. Knowing these mistakes, you can proactively avoid them and pick the best accounting tool.

Mistake #1: Not Knowing Its Purpose

Beginner Amazon sellers often commit this mistake as they learn the ropes of selling on the platform. Their minds are occupied with many things, and they juggle a plate full of tasks to boost monthly sales. Amidst all this, they forget that establishing clear goals matters when choosing software.

Mistake #2: Economical Selection

Financial prudence is normal, particularly for startup business owners. They see to it that they invest in the right resources. Hence, some resort to free accounting software to save money. 

The truth is prioritizing cost over features is not always the best option. Cheap tools may allow you to save, but you won’t get the essentials. Think double-entry accounting, sales tax summaries, or detailed financial reporting.

Mistake #3: Limited Accessibility

Traditional accounting means having a computer where Excel sheets are saved or having software that users can access only on a single computer. Although this method worked before, it won’t be the same in today’s highly hybrid and global work setup

Such standard tools limit inventory tracking, financial reporting, sales tax report generation, and Amazon accounting because you and your team of accountants can only access data on-site.

Mistake #4: Underestimating Security

In connection with having on-site-only accessibility is the susceptibility of your business financial data to cyber-attacks and hacking.

While Excel sheets offer a less costly accounting method, they aren't readily backed up and are more prone to corruption.  

When files are corrupted, there is a high chance that users won’t be able to recover them. Computers are also more vulnerable to getting hacked, especially if you only have a password to protect your files.

Mistake #5: Restricted Database Storage

Amazon sellers like yourself mainly focus on the software’s accounts payable and accounts receivable capabilities and financial reporting tools. However, you need unlimited storage space to scale your business.

Neglecting this feature will lead you to eventually choose a new software and migrate your data there, which is both time— and money—consuming. 

Mistake #6: Accounting Software With Missing HR Features

As a business expands, so does the team behind it. This necessitates effectively tracking your employees’ time, projects, and performance. Not investing in accounting software with integrated HR features can lead to challenges in the long run. 

Mistake #7: Uncustomizable Software Features

We all know that accounting software templates offer many advantages, such as providing pre-made options in just a few clicks. You’ll have templates for different reports and generating invoices. But despite their convenience, there may be little to no room for personalization.

Customization is essential to make your Amazon accounting data more comprehensive. For instance, you can personalize your invoices for branding purposes. If the software you’re considering does not allow any customization, you’ll either have to be content with what you have or reinvest in customized software.

5 Best Practices in Choosing the Best Accounting Software for Amazon

Now that you know the most common mistakes when choosing software, you can be more careful when weighing your options. To dive in further, here are some best practices to remember before investing in Amazon accounting software. 

Check these tips out, especially if you have little to no Amazon accounting experience.

1. Choose a Cloud-Based Accounting Software 

With all your business's essential and confidential financial information, investing in cloud-based accounting software is only fitting. This technology guarantees cybersecurity, warding off hackers and data corruption. 

On top of security is the need for enough storage space. It is best to keep financial data in one place to make monitoring financial reports easier. Picking a Microsoft SQL server/MYSQL database-compatible tool will be a great choice in the long term. 

2. Consider Payment Gateways and Bank Integrations

You’ll cater to different customers that use various payment methods. To handle this seamlessly, you must have an accounting tool ready with various payment gateways. And by integrating your bank, you can monitor the money being deposited and withdrawn in your bank account in real-time.

3.  Ensure Device Optimization

The best Amazon accounting software offers both mobile and computer access. If updates need to be made, you can use either of the devices. The Internet is accessible almost anywhere, so checking your business's financial health is easier.

4.  Consider Role-Based Access

For additional security, look for software with role-based access. This enables only authorized users in your company to edit the data in your books. Since the tool operates on the cloud, real-time updates are automated for better collaboration.

5.  Pick a Scalable Plan

Excellent accounting software should have plans that fit every type of business. If you are signing up for a beginner plan, you must have the choice to add more accounting features to the software as you grow your venture.

3 Accounting Software Options for Amazon Sellers

So, in the sea of ecommerce bookkeeping and accounting tools out there, which is the best for Amazon sellers? We have three great options in mind. Here's what to expect from them.

1. QuickBooks Online

QuickBooks Online by Intuit remains the one-stop Amazon accounting solution for most businesses. The software has the following features:

Features of QuickBooks Online
Accounts Payable and Accounts Receivable
Cash Flow ManagementLive Bookkeeping
Payroll
Invoicing
Creation and Receipt of Payments
Bank Reconciliation
Inventory Management
Projects and Time Tracking
Training
Cloud Accounting

QuickBooks also offers different plans for your specific needs, making it flexible compared to its rivals. 

2. Xero

Another reliable accounting tool online sellers can use is Xero. With Xero, your bookkeeping and accounting tasks will be automated, and you can enjoy these functions:

Features of Xero
Income and Expense Tracking
Accounts Receivable and Payable
Payments and Invoicing
Bank Reconciliation
Time and Projects Tracking
Integration of Payroll Tools
Generation of Reports
Analytics
Sales Tax
Tracking
Inventory Management

Xero also operates on the cloud, so financial data is secure, mobile-friendly, and accessible to authorized individuals only.

3. Peachtree/Sage50 Cloud

Another software we recommend for your Amazon business is Peachtree or Sage50. Below are the reasons why:

Features of Peachtree or Sage50
Cash Flow Management
Payments and Banking
Time and Projects Tracking
Human Resource Management
Customer Relationship Management
Construction-Specific Accounting
Inventory Management
Enterprise Resource Planning
Creation of Professional Invoices
Detailed Financial Reports

Sage50 is one of the few software with specialized setups for specific industries.

Accounting for Amazon Sellers With Unloop

Even if you already have the best accounting software for Amazon sellers, know you can still get help when necessary. Unloop can handle your Amazon bookkeeping and accounting, get your numbers right, and use the most reliable ecommerce accounting software. 

We began as online retailers and sellers, so we completely understand what you’re going through and what you have to do. We have Amazon-specific accounting and bookkeeping solutions for your business. You won’t regret making this important decision because it will free up your hands and help you achieve your desired productivity.
If you are excited to start, book a call now and begin your Unloop journey!

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.

a graphic showing the factors to consider when choosing a mac accounting software, from upper left to lower right: accounting features, integration & collaboration, accessibility, cloud-based, pricing and plans, ease of use, customer support.

The right software is crucial in managing finances and staying on top of your business’s accounting needs. As a Mac user, you’re already familiar with the sleek design and user-friendly interface that Apple products offer. So, why settle for anything less than Apple accounting software?

If you are a Mac user, don’t get stuck with shoddy Mac versions of software originally programmed for PCs. Let’s dig deeper into this article and find out the best accounting software for Mac users. Plus, learn the factors to consider when selecting them. 

Factors to Consider When Choosing a Mac Accounting Software

When choosing a Mac accounting software, it’s important to consider several factors to help you select the best accounting solution for your business needs. 

To determine which accounting software for Mac best serves your needs, consider the following:
  • The nature of your business

  • The size of your company

  • Your budget for accounting software

  • The complexity of your financial transactions
  • Aside from these factors, also consider the following when finding the right Mac accounting software: 

    1. Key Accounting Features

    Considering the accounting software features and functions is important before selecting it for your business. These project management tools determine how effectively you can manage your financial records, track transactions, and accomplish more accounting tasks. Here’s a quick list to begin with:

    Invoicing

    When selecting accounting software, expect a streamlined invoicing process that allows you to create customized, professional invoices easily. Many accounting software programs offer templates you can tailor to your business. 

    Some software also includes automatic invoicing for recurring transactions and one-click invoice sending.

    Expense Tracking

    Most accounting software nowadays offers intuitive expense-tracking features. Such features allow you to categorize expenses, import bank transactions, and create expense reports. Additionally, it monitors your spending patterns, which is beneficial for budgeting and reducing unnecessary costs. 

    Some software even allows you to attach digital receipts to transactions, making your documentation organized and easily accessible.

    Payroll and Tax

    The best software solutions offer automated payroll calculations and tax compliance. Elevate your business operations with additional features like direct deposit, employee self-service portals, and leave tracking to simplify your workload and enhance overall productivity.

    Time Tracking

    With the time tracking features available in accounting software, you can ensure you’re billing clients accurately and fairly. It also allows you to monitor the time spent on tasks, record billable hours, and generate timesheets for your employees. 

    1. Integration and Collaboration

    If you are an Apple person, you know that the tech giant’s core belief is that collaboration is essential for innovation. Seamlessly integrate your financial data across Apple devices with software that fosters teamwork and propels your business forward.

    💡 Look for a certain level of collaboration and integration with other software that would set your accounting tool apart.

    Integrations With Other Software

    Your accounting software should be able to integrate with third-party applications seamlessly. Integrations can help you automate critical financial processes, reduce manual data entry, and increase productivity. 

    For example, you can connect your software with popular customer relationship management (CRM) tools, invoicing and payment processing platforms like Shopify and Stripe, or collaboration tools like Slack and Google Workspace.

    Collaboration and Unlimited Users

    One of the important features you must look for in accounting software is its collaboration capabilities. With real-time collaboration, you and your team can work together on financial documents, spreadsheets, and reports from anywhere, using any Apple device. 

    Additionally, the software should allow unlimited user access with control, meaning you can grant access to as many people as you need within your organization. This enables you to delegate tasks, assign permissions, and ensure your team can collaborate effectively on your financial data.

    1. Accessibility

    As a business owner, there are essential things you have to do for your business other than accounting tasks. One is how easily you and your team can collect and analyze information.

    📱  It’s important to ensure you can still access your financial data and manage them while on the go. 

    Mobile App

    When choosing accounting software for your Mac, consider if it has a mobile app version. A good mobile app will allow you to manage your finances anywhere and anytime, making it easy to keep track of transactions, send invoices, and more from your iPhone or iPad. 

    Web Browser Access

    Besides having a mobile app, it’s also crucial for accounting software to provide seamless web browser access. This means you can log in to your account from any device, such as your Mac or even an iPad, without needing to install the software. 

    1. Cloud-Based

    Cloud-based accounting software offers numerous benefits for your business. If your financial data is stored in the cloud, you can access it from any Apple device, as long as you have a stable internet connection.

    Here are more benefits of cloud accounting software: 

    • Protection from data theft and corruption
    • Accessibility
    • Collaboration-friendly
    • Quick generation of reports
    • Saves your time from manual data entry
    1. Pricing and Plans

    Pricing is an important factor small business owners should consider when choosing their accounting software. You must select small business accounting software that optimizes your accounting processes without hurting your budget.

    Free Trial

    Whether you own a small or large enterprise, it’s always crucial to review the pricing plans available to ensure your accounting software meets your needs before committing to a subscription. Fortunately, many top-rated accounting software options offer a free trial for you to test their features. 

    💡Use this chance to explore the software's interface, integrations, and capabilities to determine if it fits your business.

    Subscription Pricing

    Once you've tried the software, find the most suitable subscription pricing. Ask yourself these questions:

    • How big is the size of your business? 
    • What are your accounting needs? 
    • How much is your budget for accounting software? 

    As your business grows, you might require additional functions, such as advanced inventory management features. Be sure to review your budget before diving into new investments.

    📈 Analyze your long-term needs and potential growth to ensure the software can adapt to your future demands.
    1. Ease of Use

    Ease of use should be a top priority when choosing the best accounting software for your business. 

    ⏳ A user-friendly application will save you time and reduce the chances of errors in your financial records. 
    • The user interface should be clean and intuitive. This enables you to navigate through the software with minimal effort. 
    • Look for software that avoids clutter and places frequently accessed functions within easy reach.
    • Consider the speed and responsiveness of the application. Slow-loading software or lagging screens can be frustrating, especially when managing finances on a tight schedule. 
    • Make sure the software is optimized for Mac devices. It should handle your specific business requirements without slowing down.
    1. Good Customer Support

    Apple offers top-notch customer support. Make sure your accounting software is capable of that service quality too. Having support staff who understand Mac inside and out is great! However, it is also important to have an accounting application that includes alternative communication options, such as the following: 

    • Free online forums
    • Tutorial videos
    • Help guides 

    These resources will help you get started and maintain momentum in using accounting software.

    The 3 Best Apple Accounting Software for Mac Users

    Now that you know the factors to consider when selecting accounting software for your Mac device, let’s explore some of the top accounting software options available:

    QuickBooks for Mac

    QuickBooks for Mac is a user-friendly accounting software for Mac users. You can choose from the online cloud or desktop version. QuickBooks for Mac also offers a 30-day free trial period. 

    QuickBooks Desktop for MacQuickBooks for Mac Online
    Need to download updates Available smartphone app
    Customize invoices and other financial statementsInformation is backed up in the cloud
    Can add payroll for an additional fee to the planSyncs bank transactions automatically

    Zoho Invoice

    Zoho Invoice could be the best free accounting software for Mac users, especially small businesses. Apart from being free of charge, here are the other things you can acquire when you sign up with Zoho:

    • Intuitive and clutter-free user interface. The software is super easy to navigate and allows you to create and send invoices and payment transactions within seconds.
    • Smooth and feature-laden. It has an excellent user experience with amazing features for Mac loyalists.
    • Time tracking at its best. You can capture work hours by simply starting the desktop timer and syncing it to the web app.
    • Great customer service. Zoho's customer support will guide you from start to finish.
    • Cloud accessibility. You can manage your invoices on the net, just like managing your files on iCloud.

    It’s also essential to note that Zoho is not as comprehensive compared to paid accounting software. 

    ProsCons
    Free (pay only for add-ons)Limited features
    Simple and intuitive Has a limit of 1000 invoices per year
    Cloud-based

    FreshBooks

    FreshBooks is another reliable cloud-based accounting software fit for your Mac computer. This application lets you receive payments, send invoices, and track expenses. You can also collaborate with your colleagues and clients easily.

    ProsCons
    Advanced accounting featuresCan be difficult to use
    Cloud-basedMay not suit large businesses
    Available smartphone app

    FreshBooks guarantees that it has all the right accounting features for your Mac to satisfy your bookkeeping needs. Other things that you can enjoy with FreshBooks are:

    • Automation of tasks such as client follow-ups, time tracking, and organizing expenses
    • Looking more professional by showing your clients sleek estimates and appropriately-designed invoices to flex your brand

    Final Thoughts

    Accounting software for Mac is not that hard to find; different, popular accounting solutions are doing their best to accommodate business owners on all platforms. Still undecided about which one to utilize? We recommend selecting from the suggested accounting solutions above. 

    We highly suggest beginning with QuickBooks Online: not only is it a very popular option for small businesses with its user-friendly interface, but you can also try it for free before buying a subscription. 

    If you’re still in doubt, contact us professionals at Unloop. We can help you with your accounting and bookkeeping needs. We’ll also help you choose the right accounting software for your business. Book a call with us to get started!

    The Mac User's Guide to Choosing the Perfect Apple Accounting Software
    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.

    a graphic showing the factors to consider when choosing a mac accounting software, from upper left to lower right: accounting features, integration & collaboration, accessibility, cloud-based, pricing and plans, ease of use, customer support.

    The right software is crucial in managing finances and staying on top of your business’s accounting needs. As a Mac user, you’re already familiar with the sleek design and user-friendly interface that Apple products offer. So, why settle for anything less than Apple accounting software?

    If you are a Mac user, don’t get stuck with shoddy Mac versions of software originally programmed for PCs. Let’s dig deeper into this article and find out the best accounting software for Mac users. Plus, learn the factors to consider when selecting them. 

    Factors to Consider When Choosing a Mac Accounting Software

    When choosing a Mac accounting software, it’s important to consider several factors to help you select the best accounting solution for your business needs. 

    To determine which accounting software for Mac best serves your needs, consider the following:
  • The nature of your business

  • The size of your company

  • Your budget for accounting software

  • The complexity of your financial transactions
  • Aside from these factors, also consider the following when finding the right Mac accounting software: 

    1. Key Accounting Features

    Considering the accounting software features and functions is important before selecting it for your business. These project management tools determine how effectively you can manage your financial records, track transactions, and accomplish more accounting tasks. Here’s a quick list to begin with:

    Invoicing

    When selecting accounting software, expect a streamlined invoicing process that allows you to create customized, professional invoices easily. Many accounting software programs offer templates you can tailor to your business. 

    Some software also includes automatic invoicing for recurring transactions and one-click invoice sending.

    Expense Tracking

    Most accounting software nowadays offers intuitive expense-tracking features. Such features allow you to categorize expenses, import bank transactions, and create expense reports. Additionally, it monitors your spending patterns, which is beneficial for budgeting and reducing unnecessary costs. 

    Some software even allows you to attach digital receipts to transactions, making your documentation organized and easily accessible.

    Payroll and Tax

    The best software solutions offer automated payroll calculations and tax compliance. Elevate your business operations with additional features like direct deposit, employee self-service portals, and leave tracking to simplify your workload and enhance overall productivity.

    Time Tracking

    With the time tracking features available in accounting software, you can ensure you’re billing clients accurately and fairly. It also allows you to monitor the time spent on tasks, record billable hours, and generate timesheets for your employees. 

    1. Integration and Collaboration

    If you are an Apple person, you know that the tech giant’s core belief is that collaboration is essential for innovation. Seamlessly integrate your financial data across Apple devices with software that fosters teamwork and propels your business forward.

    💡 Look for a certain level of collaboration and integration with other software that would set your accounting tool apart.

    Integrations With Other Software

    Your accounting software should be able to integrate with third-party applications seamlessly. Integrations can help you automate critical financial processes, reduce manual data entry, and increase productivity. 

    For example, you can connect your software with popular customer relationship management (CRM) tools, invoicing and payment processing platforms like Shopify and Stripe, or collaboration tools like Slack and Google Workspace.

    Collaboration and Unlimited Users

    One of the important features you must look for in accounting software is its collaboration capabilities. With real-time collaboration, you and your team can work together on financial documents, spreadsheets, and reports from anywhere, using any Apple device. 

    Additionally, the software should allow unlimited user access with control, meaning you can grant access to as many people as you need within your organization. This enables you to delegate tasks, assign permissions, and ensure your team can collaborate effectively on your financial data.

    1. Accessibility

    As a business owner, there are essential things you have to do for your business other than accounting tasks. One is how easily you and your team can collect and analyze information.

    📱  It’s important to ensure you can still access your financial data and manage them while on the go. 

    Mobile App

    When choosing accounting software for your Mac, consider if it has a mobile app version. A good mobile app will allow you to manage your finances anywhere and anytime, making it easy to keep track of transactions, send invoices, and more from your iPhone or iPad. 

    Web Browser Access

    Besides having a mobile app, it’s also crucial for accounting software to provide seamless web browser access. This means you can log in to your account from any device, such as your Mac or even an iPad, without needing to install the software. 

    1. Cloud-Based

    Cloud-based accounting software offers numerous benefits for your business. If your financial data is stored in the cloud, you can access it from any Apple device, as long as you have a stable internet connection.

    Here are more benefits of cloud accounting software: 

    • Protection from data theft and corruption
    • Accessibility
    • Collaboration-friendly
    • Quick generation of reports
    • Saves your time from manual data entry
    1. Pricing and Plans

    Pricing is an important factor small business owners should consider when choosing their accounting software. You must select small business accounting software that optimizes your accounting processes without hurting your budget.

    Free Trial

    Whether you own a small or large enterprise, it’s always crucial to review the pricing plans available to ensure your accounting software meets your needs before committing to a subscription. Fortunately, many top-rated accounting software options offer a free trial for you to test their features. 

    💡Use this chance to explore the software's interface, integrations, and capabilities to determine if it fits your business.

    Subscription Pricing

    Once you've tried the software, find the most suitable subscription pricing. Ask yourself these questions:

    • How big is the size of your business? 
    • What are your accounting needs? 
    • How much is your budget for accounting software? 

    As your business grows, you might require additional functions, such as advanced inventory management features. Be sure to review your budget before diving into new investments.

    📈 Analyze your long-term needs and potential growth to ensure the software can adapt to your future demands.
    1. Ease of Use

    Ease of use should be a top priority when choosing the best accounting software for your business. 

    ⏳ A user-friendly application will save you time and reduce the chances of errors in your financial records. 
    • The user interface should be clean and intuitive. This enables you to navigate through the software with minimal effort. 
    • Look for software that avoids clutter and places frequently accessed functions within easy reach.
    • Consider the speed and responsiveness of the application. Slow-loading software or lagging screens can be frustrating, especially when managing finances on a tight schedule. 
    • Make sure the software is optimized for Mac devices. It should handle your specific business requirements without slowing down.
    1. Good Customer Support

    Apple offers top-notch customer support. Make sure your accounting software is capable of that service quality too. Having support staff who understand Mac inside and out is great! However, it is also important to have an accounting application that includes alternative communication options, such as the following: 

    • Free online forums
    • Tutorial videos
    • Help guides 

    These resources will help you get started and maintain momentum in using accounting software.

    The 3 Best Apple Accounting Software for Mac Users

    Now that you know the factors to consider when selecting accounting software for your Mac device, let’s explore some of the top accounting software options available:

    QuickBooks for Mac

    QuickBooks for Mac is a user-friendly accounting software for Mac users. You can choose from the online cloud or desktop version. QuickBooks for Mac also offers a 30-day free trial period. 

    QuickBooks Desktop for MacQuickBooks for Mac Online
    Need to download updates Available smartphone app
    Customize invoices and other financial statementsInformation is backed up in the cloud
    Can add payroll for an additional fee to the planSyncs bank transactions automatically

    Zoho Invoice

    Zoho Invoice could be the best free accounting software for Mac users, especially small businesses. Apart from being free of charge, here are the other things you can acquire when you sign up with Zoho:

    • Intuitive and clutter-free user interface. The software is super easy to navigate and allows you to create and send invoices and payment transactions within seconds.
    • Smooth and feature-laden. It has an excellent user experience with amazing features for Mac loyalists.
    • Time tracking at its best. You can capture work hours by simply starting the desktop timer and syncing it to the web app.
    • Great customer service. Zoho's customer support will guide you from start to finish.
    • Cloud accessibility. You can manage your invoices on the net, just like managing your files on iCloud.

    It’s also essential to note that Zoho is not as comprehensive compared to paid accounting software. 

    ProsCons
    Free (pay only for add-ons)Limited features
    Simple and intuitive Has a limit of 1000 invoices per year
    Cloud-based

    FreshBooks

    FreshBooks is another reliable cloud-based accounting software fit for your Mac computer. This application lets you receive payments, send invoices, and track expenses. You can also collaborate with your colleagues and clients easily.

    ProsCons
    Advanced accounting featuresCan be difficult to use
    Cloud-basedMay not suit large businesses
    Available smartphone app

    FreshBooks guarantees that it has all the right accounting features for your Mac to satisfy your bookkeeping needs. Other things that you can enjoy with FreshBooks are:

    • Automation of tasks such as client follow-ups, time tracking, and organizing expenses
    • Looking more professional by showing your clients sleek estimates and appropriately-designed invoices to flex your brand

    Final Thoughts

    Accounting software for Mac is not that hard to find; different, popular accounting solutions are doing their best to accommodate business owners on all platforms. Still undecided about which one to utilize? We recommend selecting from the suggested accounting solutions above. 

    We highly suggest beginning with QuickBooks Online: not only is it a very popular option for small businesses with its user-friendly interface, but you can also try it for free before buying a subscription. 

    If you’re still in doubt, contact us professionals at Unloop. We can help you with your accounting and bookkeeping needs. We’ll also help you choose the right accounting software for your business. Book a call with us to get started!

    Read more

    As a small business owner, you can inevitably be overwhelmed by the financial challenges of running your business. You've got a lot on your plate. There's a feeling of uncertainty and pressure, from juggling marketing and sales to product development and customer service. On the worst days, you don’t know how to proceed.

    It's not your fault if you're juggling a million things. But if you don't get your finances in order, you could be in for a world of hurt down the road. Luckily, many bookkeeping agencies help you with your accounting and finances. They also enable you to take some pressure off of yourself as a business owner. In this blog post, we’ll learn more about online bookkeeping services and how they can help you with your financial business challenges.

    The Problem: Handling Financial Business Challenges

    Business challenges may be due to several factors. The first is external influences, such as market circumstances or interest rate swings, trends, technology shifts, and more. Other small business challenges may be related to internal issues, such as a lack of skilled employees, inefficient processes, management issues, and poor investment opportunities.

    Regardless of the source of the difficulty, business leaders need to understand and address these issues head-on to keep their businesses running smoothly and successfully. One effective approach for addressing business challenges is utilizing modern technology tools such as budgeting and accounting software that can help to streamline business operations and minimize risk factors within the business environment. 

    But if it's out of your expertise, seeking professional advice from experts in the field is the best thing you can do. By consulting with financial firms that offer accounting and bookkeeping, business owners can get valuable insights into current trends and best practices to help them navigate any challenges. 

    The Equation: Searching for The Right Bookkeeping Firm 

    There's no one-size-fits-all answer when it comes to finding the right bookkeeping firm. The equation will be different for every business, based on your standards in an agency. For example, maybe you need a full-service firm that can handle everything from payroll to tax preparation. Or maybe you're just looking for someone to reconcile your accounts and prepare your financial statements. 

    It's essential to choose a firm that can meet your specific requirements. Here are a few things to consider as you search for the right bookkeeping firm:

    • First and foremost, what services do you require? Are you looking for someone to do your basic bookkeeping or give tax and payroll services? Ensure that the firm you choose provides the services you require.
    • What about the finances? Because the cost of bookkeeping services varies greatly, it's critical to pick one that matches your budget. Don't be afraid to compare services for the best deal.
    • Spend some time exploring your options. Examine reviews, visit several firms' websites, and speak with other business owners who have used their bookkeeping services. If you do your research, you'll be more likely to select the best firm for your needs.
    • What is the firm's track record? Make sure you're working with a respectable bookkeeping firm with a proven track record. 
    • What is your preferred communication style? Do you want someone who will come into your office once a week or someone who you can reach by email or phone? Make sure the agency you choose offers the communication style that works best for you.
    • Remember to inquire about pricing. You don't want to be caught off guard by unexpected charges later on. Make sure you understand everything in their pricing quote so there are no unpleasant surprises later.
    • What are your main concerns? Are you looking for a firm that is close to your house or offers flexible hours? Do you want a group of specialists or one-on-one attention? If that’s it, then you can easily find your dream team.

    You'll be well on your way to hiring the proper bookkeeping service if you keep these items in mind.

    The Answer: That’s Where Unloop Comes In

    useful benefit of Pilot Bookkeeping

    Start-up businesses are looking for more affordable alternatives, considering the rising costs of bookkeeping services. For example, a bookkeeping agency like Pilot bookkeeping automates many accounting processes, saves time, and eliminates errors that can compromise the accuracy of business reports. 

    However, one small drawback is that it can be costly for small businesses on a tight budget. Pilot bookkeeping calculates your average monthly costs depending on your monthly spending. Therefore, as your company grows, the bookkeeping charge rises in lockstep with the growth in expenses.

    Another Pilot bookkeeping review states that it is only compatible with a limited number of accounting software programs. So if you're not using one of the supported programs like Quickbooks, you're out of luck.

    Luckily, Unloop has the accounting demands that every small business is looking for. Similar to Pilot, Unloop provides small businesses with access to skilled accountants who can help them navigate the ins and outs of financial management without investing hours of their time or limiting their flexibility. 

    Furthermore, this alternative to Pilot bookkeeping offers competitive rates and round-the-clock support, making it a convenient and cost-effective solution for small business owners seeking financial insight into their companies.

    Here's why it's worth checking out:

    • The financial statements such as income, balance, and cash flow are updated monthly
    • Accounting records are prepared using the accrual accounting system
    • DEXT or Hubdoc subscription
    • Quickbooks Online or Xero subscription
    • Monthly financial account reconciliations for an unlimited number of accounts (checking, savings, credit cards, etc.)
    • Expert consultation and analysis
    • Slack support is unlimited
    • Three customized KPIs (Amazon, Shopify, other)

    So if you're looking for a comprehensive bookkeeping solution with lots of extra features, give Unloop a try. 

    Final Thoughts

    So, if you're feeling overwhelmed by your business finances, don't worry, you're not alone. But fortunately, there are solutions out there. We believe that Unloop is one of the best. We offer comprehensive bookkeeping and consulting services to businesses of all sizes and industries to help you get your finances in order.

    We hope this article has provided you with enough information to make an informed conclusion about your bookkeeping needs. Book a call today!

    The Best Alternative to Pilot’s Bookkeeping Services: Unloop for Your Small Business
    Watch Now

    As a small business owner, you can inevitably be overwhelmed by the financial challenges of running your business. You've got a lot on your plate. There's a feeling of uncertainty and pressure, from juggling marketing and sales to product development and customer service. On the worst days, you don’t know how to proceed.

    It's not your fault if you're juggling a million things. But if you don't get your finances in order, you could be in for a world of hurt down the road. Luckily, many bookkeeping agencies help you with your accounting and finances. They also enable you to take some pressure off of yourself as a business owner. In this blog post, we’ll learn more about online bookkeeping services and how they can help you with your financial business challenges.

    The Problem: Handling Financial Business Challenges

    Business challenges may be due to several factors. The first is external influences, such as market circumstances or interest rate swings, trends, technology shifts, and more. Other small business challenges may be related to internal issues, such as a lack of skilled employees, inefficient processes, management issues, and poor investment opportunities.

    Regardless of the source of the difficulty, business leaders need to understand and address these issues head-on to keep their businesses running smoothly and successfully. One effective approach for addressing business challenges is utilizing modern technology tools such as budgeting and accounting software that can help to streamline business operations and minimize risk factors within the business environment. 

    But if it's out of your expertise, seeking professional advice from experts in the field is the best thing you can do. By consulting with financial firms that offer accounting and bookkeeping, business owners can get valuable insights into current trends and best practices to help them navigate any challenges. 

    The Equation: Searching for The Right Bookkeeping Firm 

    There's no one-size-fits-all answer when it comes to finding the right bookkeeping firm. The equation will be different for every business, based on your standards in an agency. For example, maybe you need a full-service firm that can handle everything from payroll to tax preparation. Or maybe you're just looking for someone to reconcile your accounts and prepare your financial statements. 

    It's essential to choose a firm that can meet your specific requirements. Here are a few things to consider as you search for the right bookkeeping firm:

    • First and foremost, what services do you require? Are you looking for someone to do your basic bookkeeping or give tax and payroll services? Ensure that the firm you choose provides the services you require.
    • What about the finances? Because the cost of bookkeeping services varies greatly, it's critical to pick one that matches your budget. Don't be afraid to compare services for the best deal.
    • Spend some time exploring your options. Examine reviews, visit several firms' websites, and speak with other business owners who have used their bookkeeping services. If you do your research, you'll be more likely to select the best firm for your needs.
    • What is the firm's track record? Make sure you're working with a respectable bookkeeping firm with a proven track record. 
    • What is your preferred communication style? Do you want someone who will come into your office once a week or someone who you can reach by email or phone? Make sure the agency you choose offers the communication style that works best for you.
    • Remember to inquire about pricing. You don't want to be caught off guard by unexpected charges later on. Make sure you understand everything in their pricing quote so there are no unpleasant surprises later.
    • What are your main concerns? Are you looking for a firm that is close to your house or offers flexible hours? Do you want a group of specialists or one-on-one attention? If that’s it, then you can easily find your dream team.

    You'll be well on your way to hiring the proper bookkeeping service if you keep these items in mind.

    The Answer: That’s Where Unloop Comes In

    useful benefit of Pilot Bookkeeping

    Start-up businesses are looking for more affordable alternatives, considering the rising costs of bookkeeping services. For example, a bookkeeping agency like Pilot bookkeeping automates many accounting processes, saves time, and eliminates errors that can compromise the accuracy of business reports. 

    However, one small drawback is that it can be costly for small businesses on a tight budget. Pilot bookkeeping calculates your average monthly costs depending on your monthly spending. Therefore, as your company grows, the bookkeeping charge rises in lockstep with the growth in expenses.

    Another Pilot bookkeeping review states that it is only compatible with a limited number of accounting software programs. So if you're not using one of the supported programs like Quickbooks, you're out of luck.

    Luckily, Unloop has the accounting demands that every small business is looking for. Similar to Pilot, Unloop provides small businesses with access to skilled accountants who can help them navigate the ins and outs of financial management without investing hours of their time or limiting their flexibility. 

    Furthermore, this alternative to Pilot bookkeeping offers competitive rates and round-the-clock support, making it a convenient and cost-effective solution for small business owners seeking financial insight into their companies.

    Here's why it's worth checking out:

    • The financial statements such as income, balance, and cash flow are updated monthly
    • Accounting records are prepared using the accrual accounting system
    • DEXT or Hubdoc subscription
    • Quickbooks Online or Xero subscription
    • Monthly financial account reconciliations for an unlimited number of accounts (checking, savings, credit cards, etc.)
    • Expert consultation and analysis
    • Slack support is unlimited
    • Three customized KPIs (Amazon, Shopify, other)

    So if you're looking for a comprehensive bookkeeping solution with lots of extra features, give Unloop a try. 

    Final Thoughts

    So, if you're feeling overwhelmed by your business finances, don't worry, you're not alone. But fortunately, there are solutions out there. We believe that Unloop is one of the best. We offer comprehensive bookkeeping and consulting services to businesses of all sizes and industries to help you get your finances in order.

    We hope this article has provided you with enough information to make an informed conclusion about your bookkeeping needs. Book a call 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.

    When running an ecommerce business, it's crucial to know how to reconcile Shopify in QuickBooks to manage it effectively. It means making sure your books are in order. But reconciliation has its own set of challenges that comes with bookkeeping mistakes. For a business owner, it's important to identify and fix them to ensure every puzzle piece fits.

    If you have a Shopify store and use QuickBooks Online (QBO) to do your accounting, this article is for you. Let Unloop show you the seven of the biggest Shopify bookkeeping mistakes sellers make when reconciling Shopify transactions to their QuickBooks Online.

    An infographic containing a summary of the 7 bookkeeping mistakes

    Not Recording Net Sales into QuickBooks

    Not collecting Shopify net sales that account for deductions, taxes, or other details that provide data about your transactions may result in inaccurate financial records and incomplete insights to analyze. 

    A Shopify account isn't simply about sales; it should include gross sales before deducting returns, refunds, sales taxes, and deductions. These figures must be analyzed to see what is happening with your online store.

    Returns and refunds eat your profits; they can even put you in the red if you're not careful. The same goes for sales tax. 

    You could overpay or underpay sales tax if you aren't paying attention, and neither is good for your bottom line. Deductions are more complex, but they're any expenses that can be directly attributed to generating revenue.

    All these must be in your financial report to get accurate profitability insight. Otherwise, you might think you're doing better than you are or worse, and no one wants that.

    Assuming Everything is Automated

    You may think that if you connect the Shopify app with your QuickBooks Online, everything will be automatic, and you can set aside accounting tasks altogether. That's far from reality. Among many things, you must reconcile Shopify payments with expenses incurred in the online store and outside of it. It's how you get to the true bottom-line profit.

    Always remember that when you integrate Shopify with cloud accounting software, you’re not letting technology do every task. There is a manual reconciliation process involved. The purpose is to make your life easier, so you can spend more time on other important aspects of your online business.

    Using the Wrong Integration App

    Several apps can migrate a lot of data from Shopify to QuickBooks. Selecting one of these third-party applications allows you to sync over every transaction, sometimes even the unnecessary ones.

    New Shopify businesses can adapt to this feature well. Low expenses and sales transactions make it easy to sort through what to keep and discard. But a high-volume Shopify seller should be more diligent with selecting integration apps for efficient accounting and financial reporting.

    Alternatively, they can hand over their accounting processes to experts. A team of accounting and bookkeeping professionals has mastered how to manage accounting for Shopify. They know which apps to integrate and can manage volumes of transactions efficiently. It's an excellent resource saver.

    Inaccurate Account and Transaction Mapping

    Some integrated applications connect Shopify and QuickBooks and automatically reconcile transactions to accounts—these are QuickBooks labels where amounts are recorded for future financial reporting and analysis.

    Certain integrations only sync Shopify transactions into a few accounts. This means some of the incoming transactions need to be mapped manually. Shopify merchants must pick this up and map the account and transaction themselves. Incorrectly doing so will affect reporting, bank account reconciliation, and business management.

    Using The Wrong Inventory Management Software

    Most accounting software has inventory-related features. As for most sellers, QuickBooks is their go-to because it’s a superior software for managing accounting processes and seamless inventory management. But depending on your specific needs, this may or may not be the ideal tool for your business. 

    If you're deep into using QuickBooks as an accounting software, gaps can be bridged by using applications, versions, or add-ons that boost its inventory management capabilities. Accounting experts would know how to make it work for your business.

    💡 For inventory syncing, the ideal approach is to use cloud inventory software such as Xero or Vend with a multi-channel inventory feature. These software are ideal for a growing business. Otherwise, QuickBooks can work if you're prepared to be more hands-on with your inventory.

    Forgetting to Reconcile Accounts

    The next blunder is not reconciling transactions in the bank with Shopify data. You may have a Shopify-QuickBooks Online integration, which can accurately record Shopify sales and expenses. But are those net figures identical to your bank account statements? Most likely, they aren’t.

    It is frustrating when the accounting numbers don't match the expected business bank account balance. It may be because there's a failure to reconcile bank accounts regularly. While you can connect your bank account to your QBO and sync your Shopify store transactions, some things still need review (e.g., portioning off sales tax from gross income).

    Doing the Accounting on Your Own

    Finally, a grave mistake is assuming you can set up and maintain your accounting without the assistance of a qualified ecommerce accountant. Even if you are using excellent cloud accounting software, it won’t yield good results without the hands of an expert.

    If you're not well-versed in bookkeeping and accounting, it's better to have an expert by your side to help manage the various Shopify account transactions. Otherwise, you will still be susceptible to issues such as failing tax compliance and messy financial liabilities.

    Two business people sitting opposite each other does high five in front of a laptop on a wooden table cluttered with documents.

    How to Reconcile Shopify in QuickBooks Seamlessly

    Once you've identified one or several of the mistakes mentioned above, you'll have to fix them as soon as possible to prevent them from creating bigger problems moving forward. Note the following solutions indicated in the table below.

    Double-Check Your Financial RecordsEnsure accurate financial records and comprehensive insights by recording Shopify net sales, gross sales, deductions, taxes, and other transaction details.
    Verify Shopify and Quickbooks SyncTo reduce errors, always review your Quickbooks sync settings to identify which accounting software features operate with or without automation.
    Examine Integration Apps Before Using ThemLook at the features of the 3rd party app you’ll use for Shopify-Quickbooks integration. This will help you get an idea of what data it can bring over to your books.
    Learn Bookkeeping BasicsGrasp basic bookkeeping and accounting principles to align synced Shopify transactions with accurate accounts.
    Choose a Specialized Inventory SoftwareImprove stock management using specialized inventory software like Fishbowl (if you’re a QuickBooks or Xero user.)
    Review Business Bank Account StatementsEstablish a reconciling routine by setting a time period, such as a month or a week, to examine line items on your bank statement. Determine how they arrived at the current balance.

    The Ultimate Solution: Hire a Bookkeeper or Accountant

    Bookkeeping for Shopify sellers is daunting. You must keep track of all your income and expenses and comply with all the relevant tax laws. You also have to deal with managing inventory, fulfilling shipping orders, and the crucial process of reconciling Shopify with QuickBooks. Altogether, these challenges pose overwhelming responsibilities for Shopify sellers.

    Even if you have the table of solutions above, doing all of them on your own is no easy feat. Fortunately, there is a solution to this problem: you can hire a bookkeeper or an accounting firm to handle or help you with most of the work. It will free up your time to focus on scaling your online business and rest easy knowing that your finances are in capable hands.

    Looking for Experts on How to Reconcile Shopify in QuickBooks? Let Unloop Help You!

    If you're making or wanting to avoid any of these mistakes, don't worry—you're not alone. We always see this with our clients using QuickBooks Online for their Shopify accounting. So we put together this list to help you identify where you might be going wrong and how to get back on track.

    If you think identifying these mistakes and troubleshooting them keeps you away from growing your business, let our team help. Our seasoned ecommerce accountants can assist you in getting your books in order and ensure that your Shopify online store runs as smoothly as possible. Give us a call at 877-421-7270 today.

    How to Reconcile Shopify in QuickBooks: 7 Biggest Bookkeeping Mistakes to Avoid
    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.

    When running an ecommerce business, it's crucial to know how to reconcile Shopify in QuickBooks to manage it effectively. It means making sure your books are in order. But reconciliation has its own set of challenges that comes with bookkeeping mistakes. For a business owner, it's important to identify and fix them to ensure every puzzle piece fits.

    If you have a Shopify store and use QuickBooks Online (QBO) to do your accounting, this article is for you. Let Unloop show you the seven of the biggest Shopify bookkeeping mistakes sellers make when reconciling Shopify transactions to their QuickBooks Online.

    An infographic containing a summary of the 7 bookkeeping mistakes

    Not Recording Net Sales into QuickBooks

    Not collecting Shopify net sales that account for deductions, taxes, or other details that provide data about your transactions may result in inaccurate financial records and incomplete insights to analyze. 

    A Shopify account isn't simply about sales; it should include gross sales before deducting returns, refunds, sales taxes, and deductions. These figures must be analyzed to see what is happening with your online store.

    Returns and refunds eat your profits; they can even put you in the red if you're not careful. The same goes for sales tax. 

    You could overpay or underpay sales tax if you aren't paying attention, and neither is good for your bottom line. Deductions are more complex, but they're any expenses that can be directly attributed to generating revenue.

    All these must be in your financial report to get accurate profitability insight. Otherwise, you might think you're doing better than you are or worse, and no one wants that.

    Assuming Everything is Automated

    You may think that if you connect the Shopify app with your QuickBooks Online, everything will be automatic, and you can set aside accounting tasks altogether. That's far from reality. Among many things, you must reconcile Shopify payments with expenses incurred in the online store and outside of it. It's how you get to the true bottom-line profit.

    Always remember that when you integrate Shopify with cloud accounting software, you’re not letting technology do every task. There is a manual reconciliation process involved. The purpose is to make your life easier, so you can spend more time on other important aspects of your online business.

    Using the Wrong Integration App

    Several apps can migrate a lot of data from Shopify to QuickBooks. Selecting one of these third-party applications allows you to sync over every transaction, sometimes even the unnecessary ones.

    New Shopify businesses can adapt to this feature well. Low expenses and sales transactions make it easy to sort through what to keep and discard. But a high-volume Shopify seller should be more diligent with selecting integration apps for efficient accounting and financial reporting.

    Alternatively, they can hand over their accounting processes to experts. A team of accounting and bookkeeping professionals has mastered how to manage accounting for Shopify. They know which apps to integrate and can manage volumes of transactions efficiently. It's an excellent resource saver.

    Inaccurate Account and Transaction Mapping

    Some integrated applications connect Shopify and QuickBooks and automatically reconcile transactions to accounts—these are QuickBooks labels where amounts are recorded for future financial reporting and analysis.

    Certain integrations only sync Shopify transactions into a few accounts. This means some of the incoming transactions need to be mapped manually. Shopify merchants must pick this up and map the account and transaction themselves. Incorrectly doing so will affect reporting, bank account reconciliation, and business management.

    Using The Wrong Inventory Management Software

    Most accounting software has inventory-related features. As for most sellers, QuickBooks is their go-to because it’s a superior software for managing accounting processes and seamless inventory management. But depending on your specific needs, this may or may not be the ideal tool for your business. 

    If you're deep into using QuickBooks as an accounting software, gaps can be bridged by using applications, versions, or add-ons that boost its inventory management capabilities. Accounting experts would know how to make it work for your business.

    💡 For inventory syncing, the ideal approach is to use cloud inventory software such as Xero or Vend with a multi-channel inventory feature. These software are ideal for a growing business. Otherwise, QuickBooks can work if you're prepared to be more hands-on with your inventory.

    Forgetting to Reconcile Accounts

    The next blunder is not reconciling transactions in the bank with Shopify data. You may have a Shopify-QuickBooks Online integration, which can accurately record Shopify sales and expenses. But are those net figures identical to your bank account statements? Most likely, they aren’t.

    It is frustrating when the accounting numbers don't match the expected business bank account balance. It may be because there's a failure to reconcile bank accounts regularly. While you can connect your bank account to your QBO and sync your Shopify store transactions, some things still need review (e.g., portioning off sales tax from gross income).

    Doing the Accounting on Your Own

    Finally, a grave mistake is assuming you can set up and maintain your accounting without the assistance of a qualified ecommerce accountant. Even if you are using excellent cloud accounting software, it won’t yield good results without the hands of an expert.

    If you're not well-versed in bookkeeping and accounting, it's better to have an expert by your side to help manage the various Shopify account transactions. Otherwise, you will still be susceptible to issues such as failing tax compliance and messy financial liabilities.

    Two business people sitting opposite each other does high five in front of a laptop on a wooden table cluttered with documents.

    How to Reconcile Shopify in QuickBooks Seamlessly

    Once you've identified one or several of the mistakes mentioned above, you'll have to fix them as soon as possible to prevent them from creating bigger problems moving forward. Note the following solutions indicated in the table below.

    Double-Check Your Financial RecordsEnsure accurate financial records and comprehensive insights by recording Shopify net sales, gross sales, deductions, taxes, and other transaction details.
    Verify Shopify and Quickbooks SyncTo reduce errors, always review your Quickbooks sync settings to identify which accounting software features operate with or without automation.
    Examine Integration Apps Before Using ThemLook at the features of the 3rd party app you’ll use for Shopify-Quickbooks integration. This will help you get an idea of what data it can bring over to your books.
    Learn Bookkeeping BasicsGrasp basic bookkeeping and accounting principles to align synced Shopify transactions with accurate accounts.
    Choose a Specialized Inventory SoftwareImprove stock management using specialized inventory software like Fishbowl (if you’re a QuickBooks or Xero user.)
    Review Business Bank Account StatementsEstablish a reconciling routine by setting a time period, such as a month or a week, to examine line items on your bank statement. Determine how they arrived at the current balance.

    The Ultimate Solution: Hire a Bookkeeper or Accountant

    Bookkeeping for Shopify sellers is daunting. You must keep track of all your income and expenses and comply with all the relevant tax laws. You also have to deal with managing inventory, fulfilling shipping orders, and the crucial process of reconciling Shopify with QuickBooks. Altogether, these challenges pose overwhelming responsibilities for Shopify sellers.

    Even if you have the table of solutions above, doing all of them on your own is no easy feat. Fortunately, there is a solution to this problem: you can hire a bookkeeper or an accounting firm to handle or help you with most of the work. It will free up your time to focus on scaling your online business and rest easy knowing that your finances are in capable hands.

    Looking for Experts on How to Reconcile Shopify in QuickBooks? Let Unloop Help You!

    If you're making or wanting to avoid any of these mistakes, don't worry—you're not alone. We always see this with our clients using QuickBooks Online for their Shopify accounting. So we put together this list to help you identify where you might be going wrong and how to get back on track.

    If you think identifying these mistakes and troubleshooting them keeps you away from growing your business, let our team help. Our seasoned ecommerce accountants can assist you in getting your books in order and ensure that your Shopify online store runs as smoothly as possible. Give us a call at 877-421-7270 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.

    Understanding sales tax is essential for any business owner and Amazon seller. After all, you are responsible for collecting sales tax if you're a third-party merchant. Unfamiliar Amazon merchants may ask questions like “How many states does Amazon charge sales tax,” and “What type of sales tax do they collect?”

    To quell some of your first-time seller worries, let’s run through these questions and take some time to learn about Amazon sales tax. It could save your business from unexpected fees or penalties down the road!

    Common Amazon Sales Tax Concerns

    Sales tax compliance is the root of many concerns for online sellers, particularly on Amazon. While it may not be the most exciting topic, addressing these concerns is essential for any e-commerce business. 

    In this section, we'll break down some of the most common Amazon sales tax concerns in a straightforward, no-nonsense manner.

    Does Amazon Charge Sales Tax?

    Amazon collects sales taxes on "Fulfilled by Amazon" products sold to customers in states that have adopted Marketplace Facilitator, Marketplace Fairness, or similar laws and where the seller has a nexus (presence or location, such as a warehouse).

    📝Note that Amazon only takes into account where the inventory is currently located.

    As a result of these restrictions, the marketplace on which the merchant relies to make a sale takes on the role of a collector.

    However, a third-party Amazon seller must still set up their own tax accounting system to keep up with the regulations and filing dates. In short, if Amazon fulfills your products, you don't need to worry about sales taxes, but that comes with its cons, such as increased returns due to Amazon's return policy.

    Why Is Amazon Collecting Sales Taxes In The First Place?

    For years, consumers have enjoyed shopping online without paying sales taxes on their purchases. It seems like an unfair advantage: laws have long required brick-and-mortar stores to collect sales taxes in every state where customers shop in person.

    However, they didn't pay sales taxes because no physical presence was required for ecommerce merchants or marketplace sellers, like Amazon FBA sellers who shipped through third parties.

    This setup has evolved due to the implementation of "Amazon Laws" by various states. These laws mandate that online retailers located outside their borders, even those who sell indirectly, must now collect online sales taxes from customers residing within those jurisdictions.

    How Many States Does Amazon Charge Sales Tax?

    Amazon collects and processes state sales tax from 46 American states and areas, including D.C., which contrasts with a sales tax nexus. Below is a list of states where customers must pay sales tax on their Amazon online purchases.

    a graphic answering the question "how many states does amazon charge sales tax?" and listing down 46 states and territories

    What is a Sales Tax Nexus?

    The sales tax nexus is where a business operates, not the location of the buyer or where the product is going. For example, if a seller maintains physical locations in several states, such as offices or in-store retail shops, the seller must know each state's tax regulations.

    Amazon also offers its own Sales Tax Calculator to help sellers determine the appropriate sales tax rate to charge their customers. 

    How Does Amazon Do Their Sales Tax Collection?

    If you're wondering, "How much sales tax does Amazon charge?", the total tax for your purchase will be based on several variables, including but not limited to the following:

    • Knowledge of the vendor's identity;
    • The specifics of the service or item being purchased;
    • When and where it will be accomplished;
    • Specifically, the location where your package will be delivered.

    The total state and local tax rate in effect at the location of delivery or fulfillment will be the rate charged to your order. For example, if your product is being transported to a state with a sales tax, you may still be charged sales tax even if you are in a tax-free zone.

    If you're an FBA vendor, the procedure is still taxing, but Amazon can help you do the job efficiently.

    Amazon customers are required by law to pay state sales tax in jurisdictions where Amazon operates retail warehouses, including any warehouses, offices, or other facilities in a state owned or leased by the ecommerce giant or its affiliates.

    In addition, Amazon is required to collect tax if they charge shipping and handling (S&H) and other fulfillment-related services performed at their fulfillment centers.

    The laws vary from state to state but generally require you to collect sales tax if you're doing business there and make charges for S&H or fulfillment services.

    What Types of Sales Taxes Can Apply to Your Amazon Business?

    When dealing with Amazon sales tax, you must be aware of the different sales tax types that may apply to your business, such as state and local taxes or county taxes. You must also understand how each product code is taxed in these places.

    State and Local Taxes

    Each jurisdiction has its own sales tax laws. Therefore, you must research the specific sales tax laws for the state or states you are doing business in. 

    Also, some localities within a state may have their own sales tax laws. For instance, Seattle has a local sales tax of 3.75% combined with Washington's state sales tax of 6.50% for a total of 10.25%.

    County Taxes

    Some jurisdictions also charge their taxes in addition to state and local taxes. These fees, ranging from 0.5% to 2%, are generally added on top of state and local sales taxes. Furthermore, certain counties may have different rules regarding sales tax collection.

    Another factor to consider is how different products are taxed. For example, you may sell goods, digital content, or services, such as streaming movies or consulting services, which can all be charged differently.

    Sales Tax on Goods

    For sales tax on goods sold on Amazon, you must know the rates that apply to different products in your state or locality.

    In addition, some items may be exempt from sales tax collection altogether. These include food and certain types of clothing. However, these exemptions may vary. 

    Do your research to ensure that you correctly charge sales tax on all of your products with the right product tax code. You can find this information on Seller Central.

    How Does This Sales Tax Collection Work For Fulfillment By Merchant (FBM) Sellers?

    As mentioned, Amazon FBA sellers don’t have to do much regarding sales tax collection from customers in states with Marketplace Facilitator laws. Amazon handles all the sales tax calculations and remittances for them.

    However, with Amazon FBM, it'll be entirely up to the seller to ensure that the proper amount of sales tax is collected from buyers.

    How Can You Maximize Profits and Minimize Issues With Tax Authorities?

    One of your main goals should be to maximize your profits while minimizing potential issues with the tax collection authorities. 

    Several key steps can help you achieve these goals, such as carefully reviewing the tax laws for your state or locality and familiarizing yourself with the different types of taxes that may apply to your products or services. 

    Additionally, keeping accurate records of your sales and purchases is important to ensure that you are correctly calculating and remitting any taxes that may be due.

    Unloop Your Worries!

    There are plenty of pros to understanding sales tax. For one, you can avoid penalties and interest charges if you mistakenly fail to remit or collect sales tax. Additionally, you can accurately calculate your taxes owed, which will help you stay organized and efficient come tax time.

    As you can see, there are varieties of Amazon sales tax that may apply to your business. You need to know how these taxes impact your bottom line to stay tax compliant and avoid hefty charges. 

    If you need help sorting through this complex information or want advice on managing your sales tax obligations, Unloop is here for you. We offer excellent bookkeeping services for small businesses. 

    So unloop, take a breather, and give us a call at 877-421-7270 if you want to learn how to grow your business with comprehensive accounting.

    How Many States Does Amazon Charge Sales Tax In & Other Amazon Sales Tax FAQs Answered
    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.

    Understanding sales tax is essential for any business owner and Amazon seller. After all, you are responsible for collecting sales tax if you're a third-party merchant. Unfamiliar Amazon merchants may ask questions like “How many states does Amazon charge sales tax,” and “What type of sales tax do they collect?”

    To quell some of your first-time seller worries, let’s run through these questions and take some time to learn about Amazon sales tax. It could save your business from unexpected fees or penalties down the road!

    Common Amazon Sales Tax Concerns

    Sales tax compliance is the root of many concerns for online sellers, particularly on Amazon. While it may not be the most exciting topic, addressing these concerns is essential for any e-commerce business. 

    In this section, we'll break down some of the most common Amazon sales tax concerns in a straightforward, no-nonsense manner.

    Does Amazon Charge Sales Tax?

    Amazon collects sales taxes on "Fulfilled by Amazon" products sold to customers in states that have adopted Marketplace Facilitator, Marketplace Fairness, or similar laws and where the seller has a nexus (presence or location, such as a warehouse).

    📝Note that Amazon only takes into account where the inventory is currently located.

    As a result of these restrictions, the marketplace on which the merchant relies to make a sale takes on the role of a collector.

    However, a third-party Amazon seller must still set up their own tax accounting system to keep up with the regulations and filing dates. In short, if Amazon fulfills your products, you don't need to worry about sales taxes, but that comes with its cons, such as increased returns due to Amazon's return policy.

    Why Is Amazon Collecting Sales Taxes In The First Place?

    For years, consumers have enjoyed shopping online without paying sales taxes on their purchases. It seems like an unfair advantage: laws have long required brick-and-mortar stores to collect sales taxes in every state where customers shop in person.

    However, they didn't pay sales taxes because no physical presence was required for ecommerce merchants or marketplace sellers, like Amazon FBA sellers who shipped through third parties.

    This setup has evolved due to the implementation of "Amazon Laws" by various states. These laws mandate that online retailers located outside their borders, even those who sell indirectly, must now collect online sales taxes from customers residing within those jurisdictions.

    How Many States Does Amazon Charge Sales Tax?

    Amazon collects and processes state sales tax from 46 American states and areas, including D.C., which contrasts with a sales tax nexus. Below is a list of states where customers must pay sales tax on their Amazon online purchases.

    a graphic answering the question "how many states does amazon charge sales tax?" and listing down 46 states and territories

    What is a Sales Tax Nexus?

    The sales tax nexus is where a business operates, not the location of the buyer or where the product is going. For example, if a seller maintains physical locations in several states, such as offices or in-store retail shops, the seller must know each state's tax regulations.

    Amazon also offers its own Sales Tax Calculator to help sellers determine the appropriate sales tax rate to charge their customers. 

    How Does Amazon Do Their Sales Tax Collection?

    If you're wondering, "How much sales tax does Amazon charge?", the total tax for your purchase will be based on several variables, including but not limited to the following:

    • Knowledge of the vendor's identity;
    • The specifics of the service or item being purchased;
    • When and where it will be accomplished;
    • Specifically, the location where your package will be delivered.

    The total state and local tax rate in effect at the location of delivery or fulfillment will be the rate charged to your order. For example, if your product is being transported to a state with a sales tax, you may still be charged sales tax even if you are in a tax-free zone.

    If you're an FBA vendor, the procedure is still taxing, but Amazon can help you do the job efficiently.

    Amazon customers are required by law to pay state sales tax in jurisdictions where Amazon operates retail warehouses, including any warehouses, offices, or other facilities in a state owned or leased by the ecommerce giant or its affiliates.

    In addition, Amazon is required to collect tax if they charge shipping and handling (S&H) and other fulfillment-related services performed at their fulfillment centers.

    The laws vary from state to state but generally require you to collect sales tax if you're doing business there and make charges for S&H or fulfillment services.

    What Types of Sales Taxes Can Apply to Your Amazon Business?

    When dealing with Amazon sales tax, you must be aware of the different sales tax types that may apply to your business, such as state and local taxes or county taxes. You must also understand how each product code is taxed in these places.

    State and Local Taxes

    Each jurisdiction has its own sales tax laws. Therefore, you must research the specific sales tax laws for the state or states you are doing business in. 

    Also, some localities within a state may have their own sales tax laws. For instance, Seattle has a local sales tax of 3.75% combined with Washington's state sales tax of 6.50% for a total of 10.25%.

    County Taxes

    Some jurisdictions also charge their taxes in addition to state and local taxes. These fees, ranging from 0.5% to 2%, are generally added on top of state and local sales taxes. Furthermore, certain counties may have different rules regarding sales tax collection.

    Another factor to consider is how different products are taxed. For example, you may sell goods, digital content, or services, such as streaming movies or consulting services, which can all be charged differently.

    Sales Tax on Goods

    For sales tax on goods sold on Amazon, you must know the rates that apply to different products in your state or locality.

    In addition, some items may be exempt from sales tax collection altogether. These include food and certain types of clothing. However, these exemptions may vary. 

    Do your research to ensure that you correctly charge sales tax on all of your products with the right product tax code. You can find this information on Seller Central.

    How Does This Sales Tax Collection Work For Fulfillment By Merchant (FBM) Sellers?

    As mentioned, Amazon FBA sellers don’t have to do much regarding sales tax collection from customers in states with Marketplace Facilitator laws. Amazon handles all the sales tax calculations and remittances for them.

    However, with Amazon FBM, it'll be entirely up to the seller to ensure that the proper amount of sales tax is collected from buyers.

    How Can You Maximize Profits and Minimize Issues With Tax Authorities?

    One of your main goals should be to maximize your profits while minimizing potential issues with the tax collection authorities. 

    Several key steps can help you achieve these goals, such as carefully reviewing the tax laws for your state or locality and familiarizing yourself with the different types of taxes that may apply to your products or services. 

    Additionally, keeping accurate records of your sales and purchases is important to ensure that you are correctly calculating and remitting any taxes that may be due.

    Unloop Your Worries!

    There are plenty of pros to understanding sales tax. For one, you can avoid penalties and interest charges if you mistakenly fail to remit or collect sales tax. Additionally, you can accurately calculate your taxes owed, which will help you stay organized and efficient come tax time.

    As you can see, there are varieties of Amazon sales tax that may apply to your business. You need to know how these taxes impact your bottom line to stay tax compliant and avoid hefty charges. 

    If you need help sorting through this complex information or want advice on managing your sales tax obligations, Unloop is here for you. We offer excellent bookkeeping services for small businesses. 

    So unloop, take a breather, and give us a call at 877-421-7270 if you want to learn how to grow your business with comprehensive accounting.

    Read more

    It's no secret that Amazon is the biggest online shopping platform in the world for sellers and buyers alike. Each year, there's an increase in users on Amazon. So if you have a business and want to extend your store into the online world, Amazon is the best way to do so. It allows small business owners to reach more people and increase their revenue.

    Amazon also has an FBA program that helps merchants sell their products more easily. If you plan to start a business on Amazon, here's everything you need to know about the Amazon FBA program.

    What is Amazon FBA?

    If you have a product-based business, you need a warehouse to store your products and a reliable company to ship your goods. Amazon addresses those worries, and its program offers to take responsibility for storing your goods, packing them, and shipping them to your customers.

    When you use their program, your items will be eligible for Amazon prime shipping. Furthermore, Amazon also covers damages and will give you a full refund when they happen. The Amazon FBA makes online selling more convenient and economical for merchants.

    How to Join the Amazon FBA Program?

    If you want to become an FBA seller, you can start applying to the program by checking it out in your Amazon Seller Central account. Amazon will ask you to specify what items you will be selling to help identify which warehouse to send your products to. Then, once your products are in the warehouse, every time a customer orders from you, Amazon will do the rest.

    Additionally, every time an order is complete, Amazon notifies you about the status of your products in storage. Since Amazon is doing the bulk of the work for you, there are FBA fees you need to fulfill to keep the program running. Here are some of them.

    FBA fees

    FBA fees are the ones you pay Amazon for doing the work for you. The cost of FBA fees may vary depending on how big or small your item is. The price may also differ depending on your product category. One important reminder is that the FBA fee is levied per unit.

    Sales charges

    Amazon charges a merchant a fee every time you sell a product using Amazon. There are two payment options for this charge. The basic plan is to pay Amazon $0.99 for every unit you sell. The professional plan charges you $39.99 per month regardless of how many items you sell in that period.

    You should have your approximate Amazon monthly sales to help you determine which plan to use. For example, if you sell hundreds of items monthly, the professional plan will save you from excess sales charges.

    amazon fba taxes - amazon seller account 

    A Walkthrough on Amazon FBA Taxes

    Whether you have a physical store or are an Amazon seller, one thing is for sure—you need to collect sales tax. Amazon collects sales tax for their sellers, but it's your responsibility to fill up important details for proper sales tax compliance. Furthermore, there are other taxes involved when you have an Amazon business.

    Here is an easy guide for online sellers to help you navigate the confusing part of tax filing.

    Form 1099-K

    The most important form to accomplish when dealing with Amazon FBA taxes is form 1099-K. This form contains all the business income you must file and declare to your government. The information you should include in this form are:

    • Annual gross income
    • Monthly gross income
    • Sales tax
    • Shipping fees

    Additionally, to make it easier for you to track your tax obligations, Amazon generates the form for you. Although, as an Amazon seller, it's your responsibility to check if there are any discrepancies in the tax data before you file it to your tax collection agency.

    Understanding the Amazon Sales Tax Report

    Sales tax is a consumption tax levied by the government on the sales of goods and services. If you are a product-based business, most of your goods will be imposed with sales tax, and you have to collect them as a seller. However, sales tax rates may vary depending on where the sales originates.

    You can collect the correct sales tax rate by identifying your business's sales tax nexus. In most cases, the nexus you belong to is the state where your base of operations is. But other business functions can also dictate what sales nexus you belong in.

    • Personnel working for your business in different states
    • Business affiliates
    • Selling products during events in different states
    • Economic nexus
    • Inventory storage

    As a general rule, your tax nexus should be your home state, but for Amazon FBA sellers taxes, it's not always the case. Since your products are sent to an Amazon warehouse, there are situations in which your items are in another state. In this case, your sales tax nexus will follow where your inventory storage is.

    How Does Amazon Collect FBA Sales Tax?

    If you're worried that you must manually collect sales tax every time someone purchases from your business, you can relax. Amazon handles the sales tax collection. Once a customer checks out an item, Amazon automatically adds the proper sales tax to the final cost. You see reports of your sales tax collections on your Amazon seller central account.

    However, before Amazon can start collecting sales tax, you must first apply for a permit to collect them. After which, you have to set up the collection rate in your Amazon account. If you have products that are eligible for exemptions, you have to put it in your tax settings so the platform can collect sales tax properly.

    Filing Sales Tax Returns of Amazon FBA sellers

    Since Amazon generates almost all the forms and reports you need for your sales tax, all you have to do is to file them. You have time to prepare for filing your taxes and ensure that all data is valid and complies with the taxation laws. Here are several ways to file your taxes.

    1. Hire a professional. If you have the extra budget to hire a tax professional, then this is the best option you can go for. You can let the professional handle the filing process and can even do the checking for you. If you have little knowledge about taxes, a professional will ensure that all data on your forms and reports are valid to avoid delays and fines.
    1. Accounting software. There are accounting software options that can help you file your taxes. These filing programs will guide you through the process and upload all your needed forms. However, you still have to ensure that all information on your documents are valid before uploading them to the software.
    1. Filing online. The IRS and other tax collection agencies allow you to file online to avoid long lines. You can file independently if you are confident about your understanding of taxes. This way, you won't need to pay a professional or software for tax filing processes. Just remember to review your documents several times to ensure they are error-free.
      tax filing online

      Unloop: Accounting for Amazon Sellers

      Whether you have a physical store or you own an online store, accounting is part of running a business. Unfortunately, accounting is also one of the messiest, most time-consuming, and most confusing tasks to handle. As a business owner, you need to oversee many aspects of your business, and you can't spend all your time on accounting.

      Unloop offers accounting services for Amazon sellers so business owners can focus on other parts of their business. Our services include:

      • Figuring out your business numbers from COGS—inventory to sales
      • Using accrual accounting to make financial reports for your business
      • Automating your business by connecting it to accounting software
      • Connecting you to CPAs to help you with tax filing at the end of tax season

      Final Thoughts

      The Amazon FBA program is a big help for sellers to run their businesses conveniently. From storing and packing to shipping your goods, Amazon handles it all for you. But, of course, even as you enjoy their services, it is your responsibility to comply with tax laws. 

      We hope this short guide on handling your Amazon FBA sales taxes helps you understand and prepare your tax for the incoming tax season. If you need professional help, Unloop has a team of ecommerce experts to help you with your business accounting. Book a call with us today!

      Amazon FBA Taxes and Everything About the Amazon FBA Program
      Watch Now

      It's no secret that Amazon is the biggest online shopping platform in the world for sellers and buyers alike. Each year, there's an increase in users on Amazon. So if you have a business and want to extend your store into the online world, Amazon is the best way to do so. It allows small business owners to reach more people and increase their revenue.

      Amazon also has an FBA program that helps merchants sell their products more easily. If you plan to start a business on Amazon, here's everything you need to know about the Amazon FBA program.

      What is Amazon FBA?

      If you have a product-based business, you need a warehouse to store your products and a reliable company to ship your goods. Amazon addresses those worries, and its program offers to take responsibility for storing your goods, packing them, and shipping them to your customers.

      When you use their program, your items will be eligible for Amazon prime shipping. Furthermore, Amazon also covers damages and will give you a full refund when they happen. The Amazon FBA makes online selling more convenient and economical for merchants.

      How to Join the Amazon FBA Program?

      If you want to become an FBA seller, you can start applying to the program by checking it out in your Amazon Seller Central account. Amazon will ask you to specify what items you will be selling to help identify which warehouse to send your products to. Then, once your products are in the warehouse, every time a customer orders from you, Amazon will do the rest.

      Additionally, every time an order is complete, Amazon notifies you about the status of your products in storage. Since Amazon is doing the bulk of the work for you, there are FBA fees you need to fulfill to keep the program running. Here are some of them.

      FBA fees

      FBA fees are the ones you pay Amazon for doing the work for you. The cost of FBA fees may vary depending on how big or small your item is. The price may also differ depending on your product category. One important reminder is that the FBA fee is levied per unit.

      Sales charges

      Amazon charges a merchant a fee every time you sell a product using Amazon. There are two payment options for this charge. The basic plan is to pay Amazon $0.99 for every unit you sell. The professional plan charges you $39.99 per month regardless of how many items you sell in that period.

      You should have your approximate Amazon monthly sales to help you determine which plan to use. For example, if you sell hundreds of items monthly, the professional plan will save you from excess sales charges.

      amazon fba taxes - amazon seller account 

      A Walkthrough on Amazon FBA Taxes

      Whether you have a physical store or are an Amazon seller, one thing is for sure—you need to collect sales tax. Amazon collects sales tax for their sellers, but it's your responsibility to fill up important details for proper sales tax compliance. Furthermore, there are other taxes involved when you have an Amazon business.

      Here is an easy guide for online sellers to help you navigate the confusing part of tax filing.

      Form 1099-K

      The most important form to accomplish when dealing with Amazon FBA taxes is form 1099-K. This form contains all the business income you must file and declare to your government. The information you should include in this form are:

      • Annual gross income
      • Monthly gross income
      • Sales tax
      • Shipping fees

      Additionally, to make it easier for you to track your tax obligations, Amazon generates the form for you. Although, as an Amazon seller, it's your responsibility to check if there are any discrepancies in the tax data before you file it to your tax collection agency.

      Understanding the Amazon Sales Tax Report

      Sales tax is a consumption tax levied by the government on the sales of goods and services. If you are a product-based business, most of your goods will be imposed with sales tax, and you have to collect them as a seller. However, sales tax rates may vary depending on where the sales originates.

      You can collect the correct sales tax rate by identifying your business's sales tax nexus. In most cases, the nexus you belong to is the state where your base of operations is. But other business functions can also dictate what sales nexus you belong in.

      • Personnel working for your business in different states
      • Business affiliates
      • Selling products during events in different states
      • Economic nexus
      • Inventory storage

      As a general rule, your tax nexus should be your home state, but for Amazon FBA sellers taxes, it's not always the case. Since your products are sent to an Amazon warehouse, there are situations in which your items are in another state. In this case, your sales tax nexus will follow where your inventory storage is.

      How Does Amazon Collect FBA Sales Tax?

      If you're worried that you must manually collect sales tax every time someone purchases from your business, you can relax. Amazon handles the sales tax collection. Once a customer checks out an item, Amazon automatically adds the proper sales tax to the final cost. You see reports of your sales tax collections on your Amazon seller central account.

      However, before Amazon can start collecting sales tax, you must first apply for a permit to collect them. After which, you have to set up the collection rate in your Amazon account. If you have products that are eligible for exemptions, you have to put it in your tax settings so the platform can collect sales tax properly.

      Filing Sales Tax Returns of Amazon FBA sellers

      Since Amazon generates almost all the forms and reports you need for your sales tax, all you have to do is to file them. You have time to prepare for filing your taxes and ensure that all data is valid and complies with the taxation laws. Here are several ways to file your taxes.

      1. Hire a professional. If you have the extra budget to hire a tax professional, then this is the best option you can go for. You can let the professional handle the filing process and can even do the checking for you. If you have little knowledge about taxes, a professional will ensure that all data on your forms and reports are valid to avoid delays and fines.
      1. Accounting software. There are accounting software options that can help you file your taxes. These filing programs will guide you through the process and upload all your needed forms. However, you still have to ensure that all information on your documents are valid before uploading them to the software.
      1. Filing online. The IRS and other tax collection agencies allow you to file online to avoid long lines. You can file independently if you are confident about your understanding of taxes. This way, you won't need to pay a professional or software for tax filing processes. Just remember to review your documents several times to ensure they are error-free.
        tax filing online

        Unloop: Accounting for Amazon Sellers

        Whether you have a physical store or you own an online store, accounting is part of running a business. Unfortunately, accounting is also one of the messiest, most time-consuming, and most confusing tasks to handle. As a business owner, you need to oversee many aspects of your business, and you can't spend all your time on accounting.

        Unloop offers accounting services for Amazon sellers so business owners can focus on other parts of their business. Our services include:

        • Figuring out your business numbers from COGS—inventory to sales
        • Using accrual accounting to make financial reports for your business
        • Automating your business by connecting it to accounting software
        • Connecting you to CPAs to help you with tax filing at the end of tax season

        Final Thoughts

        The Amazon FBA program is a big help for sellers to run their businesses conveniently. From storing and packing to shipping your goods, Amazon handles it all for you. But, of course, even as you enjoy their services, it is your responsibility to comply with tax laws. 

        We hope this short guide on handling your Amazon FBA sales taxes helps you understand and prepare your tax for the incoming tax season. If you need professional help, Unloop has a team of ecommerce experts to help you with your business accounting. Book a call with us today!

        Read more

        Stop guessing

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        +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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