As an Amazon seller, you should know a few areas of accounting for the eCommerce platform. By understanding these concepts, you’ll be able to maneuver managing your financial data on Amazon. While you’re organizing your finances, you will surely learn general accounting basics like the difference between cash basis and accrual accounting, the distinctive tasks accountants and bookkeepers do, and the best financial management tools. But you also need to learn about bookkeeping for Amazon sellers, tax software, and everything Amazon accounting.
To help you get started, check out this blog post as we review the four basic concepts of Amazon accounting.
Every business owner should understand the essence of bookkeeping and accounting on Amazon. The knowledge will encourage you to begin the tasks as soon as you launch your business. You can handle all the tasks below effectively through bookkeeping and accounting.
You can track your inventory through bookkeeping and check which products are in stock and need replenishment. With the updated data, you can be sure not to purchase more than suggested to avoid oversupply. Then, when the sales come, you can keep sending customer orders out without running out of stock. You can also track the monetary value of the inventory through bookkeeping.
Tracking your sales will inform you of your total income, and give insights on which products are best sellers and which items are lagging. As a result, the numbers can help you analyze the reasons behind a product’s sales success and another's failure. After the analysis, you can create action plans.
Fulfillment by Amazon (FBA) is a go-to fulfillment method for many Amazon FBA sellers because of the convenience the service gives. FBA offers packing, storage, and sending of orders on your behalf. They even have a gift wrapping service if you send something for birthdays and holidays. However, these services come at a cost. After seeing the data from bookkeeping and accounting, you can decide whether being an Amazon FBA seller is sustainable for you or not.
You do not need to rummage through old documents and receipts when you begin bookkeeping early. When all Amazon transactions are recorded, tax seasons will be easier to go through as you have all the data you need. And if you ever go under the microscope through an audit, you have a proper document trail.
Not only will complete data help during tax time but also when you apply for loans. Some requirements in acquiring a loan are income, credit history, and debit-income ratio, which are all in the books.
When you invest in the best accounting software for Amazon sellers like Quickbooks and Xero, report generation will be easier and can be generated in just a few clicks. Quickbooks and Xero already store all your business financial transactions, so all the data you need is in a single place. With the tools’ report templates, you can quickly generate income statements, cash flow, and balance sheet reports. You can customize reports according to your key performance indicators and other goals.
You need to familiarize yourself with the different Amazon tax forms to know which one you are required to accomplish when tax season comes. Although some forms are submitted by Amazon directly to the Internal Revenue Service (IRS), it pays to be aware of these documents:
These tax forms are available on your Amazon seller account. You can accomplish the tax interview using the same account. For the tax interview, supply the basic information asked and business TIN for document submission. When tax refund season comes, you can download these forms or delegate the task to tax professionals, so they can help you pay just the right amount you are due.
Like any other store, you must also pay sales taxes for every item you sell on Amazon. Sales taxes are sensitive to changes, and the rules vary per area. Some areas collect taxes based on the package's origin, some by destination, and others through unique rules. Some do not charge sales taxes too. It takes time to understand sales tax workings, and doing it alone can be quite challenging. The good news is that Amazon will do the sales tax computation, collection, and remittance for you through the Marketplace Tax Collection (MTC).
The data of these transactions are all available on Amazon Seller Central, which you can acquire and integrate into your main Amazon accounting software for data storage and generation of reports.
On top of the MTC, you can also invest in Amazon seller tax software like Taxify, Taxomate, or Taxjar. They are as updated as the tax system on Amazon.
Despite Amazon doing this task for you, it still pays to know about sales tax, especially if you have other stores outside the platform. Knowing the rules and regulations can help you independently compute sales taxes. And during your routine inspection of books, you will be able to spot sales tax mistakes because you know the facts about them.
Taxes may empty your pockets, but there are tax exemptions that can help you save money. As a seller, you must familiarize yourself with the Amazon Tax Exemption Program (ATEP). ATEP applies to individuals or businesses who are tax-exempt by law or are proven as manufacturers using the product (and not the final user).
To qualify for this program and acquire a tax exemption certificate, buyers need to provide the following:
Application is easy and usually takes just a few minutes. Once customers acquire their tax exempt certificate, they can upload it and get tax-free purchases.
As a seller, your role is to keep track of these tax-free purchases for tracking and reporting later. To get reports, you can access all tax exemption certificates in Seller Central’s “Tax Documents” tab. You’ll know which among your sales are sold tax-free.
By optimizing your tax settings on Seller Central, you can also make it easy for tax-exempted customers to purchase your products easily. To do this, you need to go to the “Members” section and tick groups and individuals who are tax exempt.
As an Amazon seller, competition will be a part of your everyday life. Selling on the largest eCommerce platform worldwide means exposing your business to as many customers as possible, but it also means selling side by side with millions of sellers.
Your plate will be full of tasks, like optimizing your product listings and advertisements for the search engine, and measuring the success of your game plan. You also have to ensure that your products and offers are on par with what other sellers offer. On top of this is financial management.
To make sure that you get all these done correctly and efficiently, seeking expert assistance is a smart move. It also takes some tasks off your plate. For Amazon bookkeeping and accounting, you can partner with a virtual bookkeeping service company for:
Aside from a virtual bookkeeping and accounting company, you can hire in-house or freelance eCommerce accountants and bookkeepers. The choice is yours—whichever works better for your business. Nevertheless, remote assistance proves to be as efficient, if not better, than other options as it’s less costly.
Small business owners should know the four essential areas of Amazon seller accounting. We hope you are now introduced to Amazon bookkeeping, tax forms, sales taxes, and the Tax Exemption Program. You’ll handle these duties as you continue to scale your Amazon business.
And if these tasks are too much for you to handle, know that you can always delegate them to bookkeeping and accounting experts.
Unloop offers Shopify and Amazon seller accounting services, and multichannel business assistance. We can handle your business’s bookkeeping, accounts payable, forecasting, payroll, and taxes using the best bookkeeping and accounting tools available. The best part is that we operate remotely, so you do not have to worry about managing another in-house team.
If you think this service is what you need, call us today. We’d love to explain our offers in detail. Talk to you soon!
Payroll seems like a small part of a large accounting picture, but it is critical. You can liken it to the oil that keeps a machine's parts moving seamlessly. It has to be adequately fed to the machine. Any lack will cause inefficiency or damage.
A good payroll management service ensures that the right salary amount is disbursed at the exact amount at the agreed payout period consistently. But this is just a small part. Here are some other benefits you'll get from hiring excellent payroll-managed services.
Many ecommerce business owners still do their payroll on paper or on outdated software. It's a practical decision if a business is just starting out. But this will lead to mishaps in the long run.
For a growing ecommerce business to run smoothly and efficiently, it has to adapt to fast technological developments. That includes payroll management. And the fastest way to catch up without being overwhelmed is to outsource payroll services.
This group of experts specializes in making sure your payroll system is seamless. They have access to the latest technology which they can adapt to your business.
Small business owners and in-house payroll personnel can get lost in the taxation maze. There are too many requirements, updates, and methods of calculations to follow. Some of them may be changed or updated making it difficult to keep score. This makes it increasingly harder to comply.
A focused payroll service team makes keeping your business and employees' taxes on the rails easy. This group of experts makes it their business to know how to comply with the latest taxation rules, so your business runs smoothly.
Calculating and processing payroll is perhaps one of the most time-consuming tasks your staff can do. Now imagine them doing this frequently.
Outsourcing a payroll service means your in-house staff is freed up from the tedious work of crunching payroll numbers on a deadline. When they have free time to do other things, they can pour their efforts into other work. As a result, productivity in other areas of your business will improve.
One crucial aspect of payroll is generating accurate numbers. Having a couple of digits missing on an employee's payslip may cause a ripple effect of unfavorable events.
Generating spot-on salary figures may be a breeze if employees are few. But as the business grows and recruitment ramps up the number of employees, calculating payroll becomes much more difficult.
Getting the help of a reliable payroll management team will take a huge weight off your shoulders in terms of accurate payroll. Some teams do thorough work on payroll processing down to the last cent. In addition, they can also provide accurate reports that reveal important numbers. This can help you with cost control and other financial decision-making.
One excellent way to cut costs while your ecommerce business is on the growth path is outsourced payroll processing. This way, you set your business to have as little in-house staff as possible. As a result, you cut costs on several business aspects. Salary expense is the primary one.
Outsourcing early also saves you the painful decision of laying off redundant payroll personnel and sets you on the right track to hire only the in-house expertise you need.
Another concern that arises during a payroll staff layoff is the loss of expertise. Again, there's a risk of losing talent and accumulated experience that may end up in the employ of your competitor.
On the other hand, outsourcing your payroll personnel will ensure that your business trade secrets will stay confidential from anyone outside the business. As a result, you keep the expertise and retain your business's competitive advantage.
Excellent payroll administration keeps employees happy. If your employees get the amount they work hard for on time and accurately, they're more likely to stay. This is the main purpose of having a good payroll management system.
Most payroll inaccuracies happen when the number of employees is too many for a few staff to handle. That's why it's important to outsource a dedicated payroll staff to ensure you get the right number of experts that calculate and pay salaries timely and correctly.
A consistently accurate and timely salary dispersion will ultimately result in a good business image. If your payroll runs like clockwork, employees are more likely to do their best. You'll also have them talk well of your business.
Add to that business tax compliance, efficient cost-revenue flow, and productive staff, and you get a well-oiled machine that attracts new customers. You can achieve all this with a good payroll partner.
A team of payroll experts awaits you in Unloop. We are dedicated to working and collaborating with you to ensure you get all the benefits mentioned above. The following are among the things we can do for your business.
Unloop makes all the necessary statements needed to file your tax returns for your ecommerce business. For example, Amazon sellers can employ these experts to do Amazon accounting. We can assist you in determining your ecommerce sales tax to make sure you pay it on time.
We can also help your employees file their tax returns by means of calculating the correct payroll amount.
We are updated with the latest accounting technology, such as Quickbooks Online (QBO) and Xero. As a result, we are adept at using it to calculate payroll. Your business can harness this knowledge and expertise so you won't have to waste time learning them.
When you decide to get Unloop's payroll services, you can sit back and relax or take care of other important business concerns. Just hand over what you need and give us a go signal, and we'll start turning the payroll cogs like clockwork.
Talk to us about how our payroll-managed services work. No commitment is necessary. We are a team of experts with experience servicing several ecommerce companies for their salary management needs, and we know how to work with businesses like yours. Reach us at 877-421-7270 if you want to discuss our payroll management services. Talk to you soon!
In business, incurring debt is certain. It's only a matter of when. In some cases, it happens when your business gets an influx of sales, and you want to take advantage of it. To fill the resource gap, you ask your supplier for credit.
Incurring business payables is a good way to leverage other people's resources to fulfill demand and grow your ecommerce business. Yet debts can also break it. So it's important to get your business's accounts payable management right. Read this Unloop article to learn more about accounts payable specialists and why it’s a smart business choice to hire us.
Most small ecommerce business owners are inclined to start their accounts payable system manually. This is because it seems to cost less than the alternatives. But there are drawbacks to consider, and they grow more complicated under the manual processing setup.
Manual entries and processing of accounts payable can be error-prone, whether on paper or MS Excel. You can only do so many manual calculations before you make a transmutation mishap that can snowball into inaccurate data or even losses.
For a good accounts payable experience, it's better for an accounts payable specialist to handle it. This is because they have knowledge and skills in accounting and bill payment software.
Manual processing and storage of vendor invoices can be tricky.
Pieces of paper stored in folders and file cabinets or piled up in office desk drawers can be hard to search through when you record in the general ledger.
As a result, you may end up asking your vendor to resend an invoice. You may also get an irate collection call that can destroy trust and goodwill.
Asking to resend an invoice is a recipe for duplicate payments. This can happen if you and your accounts payable manager or accounts payable clerk is not on the same page.
As your ecommerce business grows, the volume of accounts payable invoices and purchase orders you keep also follows. As a result, there will come a time when manual processing of these files will take more time. In addition, these financial documents will become increasingly challenging to monitor if done manually.
Taking your accounts payable system online is a practical solution, whether you're a startup ecommerce business or with experience. It's efficient, and it gives you access to global accounting talents for less than your anticipated cost.
Unloop offers accounts payable assistance for ecommerce businesses on Amazon and other virtual marketplaces. Outsourcing to our team of experts will let you enjoy these services.
Our expert accounts payable specialists will ensure you know how much your business owes vendors at any given period. They'll also ensure everything is paid on time because they understand cash flow.
We can help you get started with an automated accounts payable process or assist you in your transition. Our remote accounts payable specialists are well-versed with accounting software such as Quickbooks Online and Bill.com so that they can arrange everything for you or your accounts payable manager's approval.
If your ecommerce business vendors live in another country, our team can use money transfer applications and forex rates for you to take advantage of the lowest payment.
Outsourcing the accounts payable process to a team of accounting and bookkeeping experts like Unloop will improve your debt payment, processing, and monitoring. As a result, you'll see the following improvements to your accounting and business operations.
Good processes allow easy payments of bills. If your bills are paid, your vendor's trust is gained, resulting in an increased credit reputation.
Once you have been deemed a good payer by your vendors, you can get higher credit amounts, flexible credit conditions, and longer payment periods.
Part of doing good business is paying on time. Being a timely payer signals that your business is in good condition in the eyes of your suppliers. More importantly, your prompt payments keep your vendor's business flowing smoothly.
If you let your vendor get their money when they need it, you make good on vendor relations. You give them more cash they can use for acquisitions requiring cash payment. This is how you keep your vendor's financial statements in your best interest and maintain good faith.
Good supplier relations puts you in a good position to ask for favorable credit terms that support your business's needs.
Knowing your business's due dates allows you to allocate your cash assets to other revenue-generating activities better.
Managing cash flow is about balancing short and long-term liabilities. If you know what obligations you must pay soon and how much, you're better positioned to decide where to use your business cash within the business operation.
A more efficient use of cash can mean more opportunities to invest and expand business operations.
In addition, it also makes you more conscious about the level of short-term debts you take on for your ecommerce business.
An account payable process involves vendor invoices matched with each purchase order. This is to ensure the payment is recorded and monitored by both the accounts payable specialist and the accounting manager.
A good accounts payable process ensures all the business invoices are paid correctly and without duplicates. That means the accounts payable documents are matched, and the accounting books reflect it.
People from within your business or outside of it can take advantage by means of embezzlement and fraud. That's why it's helpful to have an excellent accounts payable process run by experts. This can foster trust amongst stakeholders and prevent any fraudulent activities.
If everything is checked, recorded, and approved by either you or your accounting manager, then people are less likely to commit accounting anomalies.
Unloop is a team of accounting experts that offers accounts payable assistance to ecommerce businesses. But more than handling debt payments, we’re also adept at bookkeeping and accounting. This wide range of accounting service expertise makes Unloop capable of keeping your business accounting needs fulfilled.
Talk to us at 877-421-7270 if you're curious about how we can improve your accounts payable experience. You can also explore our ecommerce accounts payable service. We can’t wait to hear from you!
Amazon is the biggest platform to sell products across the globe, but with every financial venture, taxes are just around the corner to lessen the hard-earned income of Amazon sellers.
As an Amazon seller, you're obligated to make a sales tax collection for every purchase. But the good news is that dropshipping is among the few eligible ventures for Amazon Tax Exemption Program (ATEP). In this blog post, we'll show you how to get tax-exempt on Amazon in minutes. Keep reading to learn more!
If you're planning to resell products online, you'll need a sales tax permit, which will allow you to collect sales tax from items sold. But, in this case, it allows you to apply for Amazon Business's Tax Exemption Program.
In most states, registering for a sales tax permit is relatively simple and can be completed online. Let's help you get started.
Having all of your ducks in a row from the beginning is important as a business owner. This will ensure that you can always correctly identify yourself and your business when dealing with government agencies or financial institutions.
Double-check if you have the following proper documentation for your online business.
This government institution is responsible for collecting taxes and administering tax laws. Every state has a Department of Revenue, and each oversees taxation within its borders.
To register your online business, visit your state's Department of Revenue website and click on the Sales and Use Tax Section. You can easily read through and complete all the necessary info to get your sales tax permit.
You're one step closer to getting your tax exemption status approved now that you have your sales tax permit. Next is heading over to your Amazon account and applying the following steps.
Under US law, online sellers make sales tax collection in states with a physical presence or nexus. Amazon has used this loophole to its advantage, systematically avoiding collecting sales tax in most states.
There are states dropshippers can get Amazon tax exemption from, so be sure to click on them when applying for it.
You will notice that some places are not included in Amazon business tax-exempt. It's because these states do not levy sales taxes.
Meanwhile, avoid clicking on the states that require you to upload state-specific permit numbers and additional information. Instead, only select them if you have the required tax exempt documentation for the following states.
After picking the states you are applying for Amazon tax exemption in, input your small business's information from its name to the type of property you sell. This includes your sales tax permit and other tax exempt documentation.
Double-check everything, and you'll be directed to a page where you will sign your Amazon tax exemption certificate. Finally, click Activate Certificates. Your Amazon tax exempt status will take effect in 15 minutes, whereas Amazon Business will upload the Amazon Tax Exemption Certificates within 24 hours.
If you're looking to start a dropshipping business or are already in the throes of running one, it's important to stay compliant with sales and income tax laws. As an Amazon seller, one way to do this is by applying for sales tax exempt status. To qualify, your business must resell items to learn how to use tax-exempt on Amazon.
Unloop can help you through the process and make sure everything is filed correctly so you can continue earning profits without worrying about penalties from the government. Are you ready to get tax-free income? Book a call today!
Owners of small businesses online must know that proper cash flow management and tracking are essential to business growth and success. And if you're using Peachtree accounting software, then you know that it can help keep your books in order. Peachtree accounting software has been around for some time. Some accountants swear by it, while others have grown tired of its many limitations.
But is this the premium accounting software you've been looking for? Is Peachtree the only software in town? What are good alternatives to this program? Keep reading to find out!
Peachtree accounting is just one option, but it's popular thanks to its robust functionality and scalability; it’s applicable for both small businesses and big corporations. Whether you're a small business owner or a freelance accountant, Peachtree can help you streamline your accounting processes.
The software includes all the basic accounting tools, like creating invoices, tracking payments, and automating financial reports. But it also goes a step further with solutions for inventory management and time tracking.
Peachtree has all functionality you need to set up for an accrual accounting system, such as accounts payable and accounts receivable. And because of its cloud-connected features, you can be sure that your accounting data will always be up-to-date.
Sage Software originally developed Peachtree accounting software. However, the product is now simply called Sage 50Cloud Accounting. While the name has changed, Sage 50 Accounting still offers the same robust functionality that many users loved about Peachtree.
Sure, Sage offers the core functionalities of an accounting software. However, there are a number of reasons why you might not want to use this financial tool for your online business.
Sage 50 may have advanced budgeting and an eloquent system for vendor management and handling inventory, but it is not at all user-friendly.
With too many tabs and small fonts, Sage creates an oversaturated interface that is too busy, with too many colors and buttons. This can make it daunting for users to input transactions on their journal entries and general ledgers, and it’s visually overwhelming.
Experienced users can customize this software to make it less imposing. But if you’ve just recently acquired Sage 50 or you don't have any idea on how to use accounting software at all, you'll have a hard time navigating through its interface, let alone setting it up for your online business.
Many users find that its basic features are overly complex. One of the most common complaints is that the software is designed for accountants, not small business owners. As a result, many small business owners spend more time figuring out how to use the software than actually using it.
Cash flow, progress billing, and invoicing are all core functionality that business owners find useful. But when they attempt to utilize these solutions on Sage, they find that they’re unnecessarily broad.
Moreover, Sage’s more advanced accounting features, such as job costing and advanced inventory management, are designed for larger businesses. As a result, small business owners with only a few employees on their payroll may find they are paying for features they will never use.
We've covered how users may have to spend a lot of time troubleshooting errors. Unfortunately, getting assistance from Sage 50's tech support when needed is quite draining. The wait times can be long, and you may not always get the most helpful advice from the advisors. You’ll be pouring hours and hours trying to get the support you need, but there will be many times when you can’t.
Many small businesses choose Sage 50 for their accounting software because it's one of the best financial tools. However, one of the drawbacks of Sage 50 is that it's pricey.
You can try Sage 50 out for free for one month. But after that, you'll be charged for the subscription plan you choose. The cost of each plan will depend on the number of people who'll use this software and the features you are after.
If you choose its starter plan (Pro Accounting), you can expect to pay around $33 per month. If you need more advanced features, such as audit trails, serialized inventory tracking, or workflow management, you can expect to pay closer to $91 a month.
For many online small businesses fairly new to the industry, that's a lot of revenue to cash out.
Sage users also complain that if you're using Pro Accounting and you want to back up your files, the software requires you to make an upgrade so that you can access your files from the previous year.
In short, Sage 50Cloud Accounting isn't cost-effective for small business owners.
You can access your books easily since Sage is a cloud-based accounting software. You can access your company data and easily pay bills anytime, anywhere. But you’ll need a website browser to do so because Sage 50Cloud lacks a mobile app.
This can be a hassle for nomadic business owners who need to access their accounting information while away from their desks. While there are some workarounds, such as using the mobile web version of the software or using a third-party app that integrates with Sage 50, not having a dedicated mobile app can be inconvenient.
Despite its drawbacks, Sage 50 is still a great software, and its long-standing existence has proven that.
But Sage isn't for new business owners. Instead, we recommend this program for:
Sage is not the only option out there for online businesses. In fact, many other software providers may be a better fit for your small business.
With its clean interface and intuitive design, QuickBooks Online is stress-free to use, even for new users. And, if you need help, there are online tutorials and a live chat support to find the answers you need. QuickBooks Online is also extremely versatile, able to meet the needs of not just small business owners like you but larger companies as well.
Sage has industry-specific functionality but so does QuickBooks. In recent years, QuickBooks Online has added new features to appeal to the needs of specific sectors, including:
QuickBooks is the number one accounting tool in the tech industry, and for a good reason. It only requires minimal effort to use and provides a variety of features that you can customize to your small business. Plus, you can manage your business through a mobile app, offering more convenience to many users.
Perhaps best of all, QuickBooks connects to hundreds of third-party applications, consolidating your business's accounting needs into one centralized system. With its wide adoption and app integration, more than 1.5 million businesses use this easy-breezy program.
Do you know how many users Xero accounting software can accommodate? Unlimited.
One notable feature is the ability to add countless users to your account for every subscription level. This is particularly helpful for businesses that need to have multiple people accessing the account, such as a team of bookkeepers and accountants. Meanwhile, Sage only allows up to forty users for its advanced tier plan.
Other accounting software such as Sage often limit the number of users that can be added to a lower-tier subscription, which can be frustrating for businesses that need more than one user. With Xero, you can be confident that you'll be able to add as many users as you need, regardless of which subscription plan you choose.
Peachtree accounting software, now Sage 50Cloud, is a great option for large businesses with a team of accountants who aren't afraid of using this software. But, perhaps, many business owners are daunted by this overly sophisticated software. It may not be the best option for your small online business.
So, is there an alternative to Peachtree accounting software? The good news is that you can find a better financial program that will fit small businesses like yours. We've detailed our two favorites of the best Peachtree alternatives for you to check out.
Unloop offers cloud-based bookkeeping and accounting solutions for small businesses. With our expertise with QuickBooks and Xero and years of experience in the ecommerce business, you’ll be able to manage your business hands-free.
So if you want a change from Sage, we'll be happy to move you over and organize your business’s finances. Book a call today to learn more about our services and how we can help your business grow.
Have you been keeping track of your invoices in a spreadsheet? Is it starting to get too difficult to manage?
You're thinking about implementing some new accounting system, but you're not sure where to start. Accounts payable software can be a great solution for small businesses, and it doesn't have to be expensive or complicated.
In this article, we'll give you an overview of what accounts payable software is and how it can benefit your business. We've also picked the five best accounts payable software for 2022. Keep reading to learn more about each platform and find the perfect one for your online business.
Accounts payable (AP) automation is a godsend for businesses that deal with a large volume of invoices and financial transactions regularly—in short, online businesses. With AP automation, all your invoices and transactions are stored in one central location, making it easy to keep track of everything.
Accounts payable automation also allows you to track payments, set up recurring payments, and see all your financial activity in one place. As a result, it's easier to monitor your payments, ensuring you have good cash flow. Plus, accounts payable automation can save you a lot of money by eliminating late fees and interest charges.
Aside from being the owner, you are also a finance executive of your online business. This means that you are responsible for the approval workflow of several invoice payments every month. With so much to juggle and manage, it's hard to quantify how many cheques you've already signed. In fact, your supplier may not even receive your cheque payment.
This cheque fraud case is just one of many problems you might encounter when you do the AP manually. Here are the other headaches you might encounter when you are not managing your accounts payable properly:
Even if there's no difficulty, you're wasting a huge amount of your time inputting your invoices manually, which could result in human error. If you're not using accounts payable automation, you're missing out on a major opportunity to streamline your financial operations.
Accounts Payable software isn't limited to big business owners or finance officers. It can also work for small business owners or account managers looking to improve their accounts payable process.
This solution is if:
Accounts payable automation has come a long way in recent years. No longer are businesses limited to using paper-based invoices and manually inputting data into their accounting software.
Today, AP software can automate the entire accounts payable process, from invoice processing to payment and reconciliation. This saves a lot of manpower and time for your online business. Plus, it also reduces errors and improves visibility within cash flow.
Here's the AP automation process you can find in comprehensive accounts payable software:
Are you convinced that having AP software can benefit your online business not just for a short period but probably for many years to come? If so, let us introduce you to some of the best software for AP automation.
Bill.com is one of the well-established players in the AP software industry. It helps small to large businesses automate their accounts payable and accounts receivable. It enables businesses to manage their finances more efficiently by streamlining how they send and receive payments.
Bill.com also offers a suite of features your online business can use to manage accounting, expenses, and invoicing. By using Bill.com, you can be at peace knowing payments are secured.
$39 to $69+/month
Tipalti is a global AP automation platform that helps businesses streamline their entire accounts payable process in over 190 countries. From start to finish, Tipalti helps businesses save time and money while ensuring compliance with tax regulations.
With this awarding-winning AP automation software, businesses can easily manage multiple payment methods, vendors, and currencies all in one place. Because Tipalti integrates with leading accounting software platforms, businesses can avoid the hassle of manual data entry. Simply put, Tipalti makes global payments easy, efficient, and compliant.
Starts at $149/month
When choosing the best AI accounts payable solution software, Stampli is the clear leader. With its industry-leading accuracy and advanced features, Stampli uses Billy the Bot to manage your accounts payable for coding your AP and notifying you of duplicated invoices. Its intuitive interface makes it easy to use, and its robust tools make it the most powerful and flexible solution on the market.
Request for a quotation
If you're a small business owner, you know that QuickBooks isn't the only accounting software out there. In fact, there are over 220 different accounting programs on the market. That's where AvidXchange comes in.
AvidXchange has invoice automation, purchase order, and bill payment software that integrates with these accounting systems. That means you can use the software you're already comfortable with without sacrificing any of the features or functionality you need. Just like most of our top picks, you can view your account anywhere, anytime.
Request for a quotation
Are you an online business owner on a very tight budget? Consider this free accounts payable automation solution—Airbase. It offers all the essential features to manage your payments, expense reimbursements, and business cards. Airbase is also highly customizable, so you can tailor it to fit the specific needs of your business. Best of all, it's free!
Overall, Airbase is excellent value and a great choice for businesses looking for free AP software.
Free; upgrades need to request a quote
As your business grows, accounts payable software can be an invaluable tool.
With accounts payable software, you can automate many of the tasks associated with invoicing and payments, such as issuing, tracking, and following up on payments. In addition, accounts payable software can help you keep track of spending, so you can make sure that you're not overpaying for goods and services.
So, do you need AP software for your online business? The answer is probably yes. Using an AP automation solution can save you from paper invoices and the hassle of vendor follow-ups. Not to mention, it will help keep your office desk free of paper and help your business avoid human errors on payments.
If you're ready to take the plunge, we would be more than happy to work with you and get your invoice process up and running in no time. Say goodbye to paper invoices. Book a call with Unloop today!
Deciding which accounting method to use for your online business is an important decision. You can start by knowing that the two most popular methods are the accrual method and the cash method.
Do you know how different cash accounting is from accrual accounting? If not, that's okay—most business owners don't.
But it's important to understand the differences, especially if you're running an online business. In this blog post, we'll explain the differences between cash and accrual accounting and help you decide which is best for your business. So read on to learn more!
Cash accounting is when you record income earned, or expenses paid. Meanwhile, accrual accounting is when you record transactions as soon as you earn or owe them.
To give you a better idea, let's bring out a sample transaction from MPOM Pet Supplies' general journal.
|Date2022||Account Title and Remarks||AmountDebit Credit|
|July 30||Cash Sales Revenue(to record cash collected)||$5,000|
|Date2022||Account Title and Remarks||AmountDebit Credit|
|July 1||Accountable receivable Sales Revenue(to record sales)||$5,000|
|July 30||Cash Accounts receivable(to record cash collected)||$5,000|
Do you see the big difference between accrual and cash-based accounting in data entry? It's in the expense and revenue recognition. Let's dive in deeper.
The simpler accounting method would be cash basis accounting. Why is it the easiest way to manage your income and expenses? Because you input the transaction only when there is cash involved. But cash here also means bank payments, cheque transactions, and the like.
Given the example above, you will notice that the transaction was only recorded on July 30th. That's because that is the only time you receive actual money.
It's important to remember that cash accounting has no such thing as accounts receivable and accounts payable. Because in this accounting method, you don't record the moment you make the transaction. It is only when you receive payment do you record it in your ledger.
Most small business owners choose cash-based accounting for three reasons.
Money goes in, and money goes out. When it does, you record it. It's easy to manage your online business this way, and you don't need to hire a professional accountant to do the job.
You don't need to adjust if a customer doesn't pay or you haven't paid your supplier yet. It's because there's no initial record of it in the first place.
With the cash basis accounting method, you get an up front report of how much you actually earned or paid during that period. This is perfect when making cash flow statements since you only record ongoing and outgoing transactions involving cash. Thus, you get the net income or net loss easily.
If you are only keeping records of cash transactions, you may have the upper hand when you need to file for your business taxes. It's because you can lower your tax liabilities by slowing down your revenues or speeding up your expenses. Of course, this is all legal.
It's the easiest accounting method to use. But there are disadvantages to using it for your ecommerce business.
MPOM Pet Supplies
Comparative Income Statement
For the Months Ended May, June, July
(in thousands of US dollars)
In this comparative income statement, MPOM received the most income during May, making it look like the online business is doing well. On the other hand, coming June and July, its profits fluctuated. This might suggest that the business was busy in May, but the other two months were stale.
So, what happens if it only gives a rough idea of your business standing in given periods?
The small business owner might make wrong business decisions. Perhaps, they'll cut back on inventory in June and July since no one was buying their products during those months. They could also make more purchase orders for May since it's the busiest, thus adding more billables that month.
Whether your online business is slow or not, it's quite impossible to remember every cash transaction coming in and going out of your business. So, if you review your last year's income statement, you won’t even remember why your revenue was low or your expenses were high back then.
Generally accepted accounting principles are accounting standards businesses and the US SEC commonly adopt. In the case of cash basis, it's a non-compliant method. But it doesn't mean using it is illegal. GAAP are not legal rules but rather the level accounting boards like Financial Accounting Standards Board (FASB) wish businesses would follow.
However, if you earn over $25 million in sales over 36 months, you are obligated to use the accrual method of accounting according to the IRS.
Even if it doesn’t conform to the standards of GAAP, many people still use the cash basis method. Because of its simplicity, you can use this method in specific situations like the ones below.
Are you just taking your first step to business success? Perhaps, you have a passion for running a business but don't know how to do accounting. If so, the cash method is for you.
Are you strapped for cash, worrying about how you will pay your taxes this year? With cash basis accounting, you’ll have lesser taxes to pay since your income during this period is low.
Now, with accrual basis accounting, you don't have to wait to record your income or expenses. You record these transactions as soon as they are earned or billed.
Once your customer buys your product on installment, you record the transaction when the order is completed. Meanwhile, expenses, such as raw materials for inventory, are recorded as soon as you receive them. Therefore, line items such as accounts payable and accounts receivable are particulars in your books.
It's not known for ease of use, but there are many advantages to using the accrual method of accounting for your online business.
Accrual-based accounting doesn't clearly show how much cash you actually have. So how is it more accurate in financial reporting than the cash method? This is because it gives the exact period when you earned or incurred an expense.
Accrual basis accounting allows you to gauge and plan for peak months of your business operations as you can see your business's profitability and performance clearer.
Did you receive a lot of orders for the month? Or did you make several dealings with the supplier at that time? The accrual method shows you the exact movements of your business operations so you can make better financial decisions in the future.
If you're not hitting the $25 million mark yet, you can still use the accrual method for recording your income and expenses. It's what the board of accounting regards as a standard, after all. Moreover, banks, lenders, and investors prefer this GAAP-compliant accounting method over cash basis accounting.
Your business may just be starting out, but you can triple your revenue in a few years, thus earning over $25 million. So, if you use accrual accounting from the beginning, you do not need to change accounting methods as you already comply with IRS regulations.
The disadvantages to using accrual accounting are only a few. But it's not without its difficulties.
For some, bookkeeping is already daunting as it is. But when you use the accrual accounting method for your online business? Daily records, end-of-the-month, and end-of-the-year reports might be stressful for you. You need to learn this accounting method well to use it properly.
Using the accrual method, you can see that your income statement (profit and loss) is looking good. However, upon checking your cash flow statement, your cash is almost $0. That's because when you look closely at your P&L statement, your accounts receivable is quite high. After all, your customers haven't fully paid yet.
Following the accrual accounting method keeps track of your profitability but not your actual cash. Thus, it's important to make cash flow statements that go hand-in-hand with your P&L.
Despite its tedious workflow, it's still the standard. Plus, once you earn a huge profit within three years, you must switch to the accrual method anyway.
Aside from these facts, small business owners choose to work with this method because they live in some states in America, like New York, requiring accrual basis tax returns. If you live in one of these states, you need to be tax compliant and pay your dues.
Which is better for your online business—accrual vs. cash? The answer is both. Accrual accounting gives clearer snapshots of your business's performance. While cash accounting can help you keep tabs on your cash flow.
Is it a lot of work? Sure, but you get the best of both worlds to make short-term and long-term decisions that would greatly benefit your online business. If you can't handle both methods, you can ask a professional accountant aware of ecommerce businesses and bookkeeping.
Don't waste your time scratching your head in deciding which accounting method to use. Instead, book a call with Unloop today to handle your income and expenses correctly.
If you are an Amazon seller, you may have heard about the Amazon Tax Exempt Program (ATEP). ATEP may sound more enticing than other tax topics because it is about exemptions. But what is it really, and how can you and your customers utilize the program? In this blog post, we’ll answer frequently asked questions about ATEP, like how it works, how you and your customers can take advantage of it, and the benefits of enrolling. So keep reading to find the answers!
ATEP is a program Amazon sellers like you can enroll in using your Seller Account. In enrolled stores, buyers can upload tax exemption documents to get a certification from Amazon and enjoy tax exempt purchases. You can proactively optimize your ATEP settings to exempt specific individuals and groups from paying taxes.
To enroll, click “Tax settings” on the menu above your Amazon Seller Central account. You can update the settings by clicking the “View/Edit Tax Collection Obligations and Shipping and Handling and Gift Wrap.”
Be prepared to fill in necessary information needed, specifically the territory/state you wish to enroll in, your organization entity, organization address, and tax exemption numbers or form.
Then, check out ATEP terms and conditions, and click “Accept” if you agree. It only takes a few minutes for your enrollment to be approved.
Some certain individuals and groups are deemed by law to be tax exempted. For instance, nonprofit groups, charity organizations, state and local government members, resellers, education providers, and direct payment holders shouldn’t be paying taxes. For members of these groups to enjoy the ATEP, they must upload tax exemption documents and get a tax exemption certificate. You can also make it easier for your customers to be tax-exempted by enabling specific groups for tax exemption on your Seller Central tax settings.
The main benefit of ATEP is making it easy for buyers to enjoy their right to tax exemption. Meanwhile, sellers attract sales from tax-exempted populations. In addition, Amazon uses a self-guided Wizard feature. Wizard allows sellers to enroll in ATEP quickly and for buyers to upload necessary tax-exempt information in just a few clicks. Approval of the enrollments and requests can be as quick as 15 minutes.
ATEP also has a feature that restricts tax-exempt buyers from sellers that are not ATEP enrolled to avoid any hassles in their purchasing process.
That’s it for our introduction to the Amazon Tax Exempt Program! We hope we answered all of your questions.
If you have any further inquiries, feel free to reach out to us here at Unloop. If you are a seller looking for help with your Amazon business or Amazon FBA bookkeeping, tracking your ATEP data, or monitoring your sales taxes, you can partner with us too.
We have a team of bookkeeping experts who can take the hassle out of tax season for you with the help of different accounting software. If you want to know more about our services, feel free to call us. We’d love to talk to you.
Outsourcing tasks for different areas of your business can be beneficial, especially when you're not well-versed in doing such things. Countless professionals and trained individuals are ready to offer their services to small businesses. But before hiring one, assess your business first. Which professional would be most helpful for your business?
When it comes to finances, you can get a bookkeeper or an accountant to help you. Does it make a difference when you hire the other professional over the other? Can they perform the tasks your business requires?
If you're thinking about hiring someone, you've come to the right place. We'll list the different responsibilities of bookkeepers and accountants so that you can hire the proper help for your growing business.
Hiring a trained professional to help you manage your business means allocating resources to pay them. But, of course, you want your hard-earned money to be worthy of the service you are getting. So let's look at the different responsibilities of accountants and bookkeepers to help you differentiate their tasks.
Certified bookkeepers do need a formal accounting degree to perform their job. However, bookkeepers are trained and do not need state-mandated exams and certifications to do their job. On average, a bookkeeper’s rate starts at $30 per hour.
Here are the responsibilities bookkeepers carry out.
Whether cash flow comes in plenty or slows down, keeping track of everything that comes in and out of your business is a way of telling if your business is doing good. Part of a bookkeeper's job is recording transactions in sales and expenses that happen in your business.
Modern technology means automated bookkeeping software, making it easier for bookkeepers to record your data. Moreover, bookkeeping software instantly produces summaries of your transactions whether you want data monthly, quarterly or annually.
It's common for small businesses to have suppliers instead of producing their own goods. Of course, you need to pay the suppliers for the goods they manufacture for you. You can work with several suppliers if your company sells a variety of goods. It's the bookkeeper's duty to make payments to your suppliers. They can also make payments on behalf of your business for other necessary expenses.
In addition, as they make payments for your business, they are in charge of the collection. They send invoices to your clients to ensure all payments are done on time. They also record if payments and receivables come in late to ensure that your sheets remain balanced.
Businesses produce several financial statements. The data on these statements can tell if your business is stable or on the verge of failing. Bookkeepers prepare these financial statements for accounts to analyze.
Balance sheets, cash flow statements, income statements, and statements of equity are a few crucial financial documents that bookkeepers offer.
A bookkeeper's service may vary, and it can include processing payroll. For small businesses, bookkeepers can perform some duties of the HR department. For example, they can assist in processing paychecks and ensure employees get their pay accurately and on time.
A certified public accountant goes through a rigorous accounting degree and must pass state-mandated licensure examinations before they can offer their services. A certified accountant's average rate is between $50-$100. It can go higher depending on their work experience.
Here are a few of the major duties held by qualified accountants in small businesses.
It's the accountant's role to make sure all data in the business's financial records are valid and accurate. Accountants are in charge of tracking any inconsistencies in the statements and pinpointing any problems. They will also be in charge of consulting with a bookkeeper when they see these inconsistencies.
Once everything is verified, accountants will be the one to answer if auditors check on your business. They also present these statements to stakeholders and potential investors to help with your business’s growth.
If bookkeepers record the cash flow in a business, the accountant makes sure you pay up correctly—especially taxes. Taxation is an important part of business, and you must comply with tax laws to run your business legally and smoothly.
Accountants are in charge of filing all tax returns for your business. Tax filing is done quarterly or annually, depending on the rule of your country's tax collection agency. Accountants ensure that you file and declare taxes on time so you won't have to pay fines and other unnecessary expenses.
An accountant can examine your business’s financial records to make an informed guess or forecast your business’s future. Aside from your records, there are other methods accountants can do to predict the direction of your business. For example, the market research method uses how many people are potential buyers when a product is launched. This information can help you significantly enhance your sales.
Other forecasting methods may include factors like GDP, economic factors, trending, and data models, which can be used for long term forecasts. Furthermore, accountants can help you plan your business's next step. Risk assessment allows you to see if your actions will benefit your business growth.
Many small business owners tend to go big and be reckless with their decisions, causing failure. Accountants will be able to strategize with you along the way so your business resources won’t go to waste. Their financial advice will help you allocate your resources to the right department.
Small businesses strive to make their processes more efficient to lessen their expenses. Budgeting within the business process is also in the job description of an accountant. They can pinpoint the areas of your business with unnecessary expenses which they think you can lessen.
Accountants can help you save money and allocate them to the other areas of your business you can improve on.
The difference between bookkeeping and accounting may be hard to spot as they both focus on the financial aspect of the business. But, to simplify, you can look at bookkeepers as individuals that keep all financial transactions in an organized record. In comparison, accountants are the ones to analyze and interpret the data.
So which one is better for a small business? As you start, bookkeeping will be easier for you to handle. In fact, you can attend training to be a certified bookkeeper. You can meet with accountants once in a while to help you manage your financial data. As your business grows and more cash flows into your company, then it may be a good time to hire both.
For trusted bookkeepers and professional accountants, book a call with Unloop and talk to our professionals. We offer many different accounting services that fit a small business’s budget.
Managing your finances is essential when running an Amazon business, especially if you're a small business owner. If you're not careful, you could quickly find yourself in financial trouble.
In this article, we'll share 10 Amazon accounting tips to help you keep your finances in check. By following these tips, you'll be able to run a more efficient and profitable Amazon business. So let's get started!
Whether you're an Amazon FBA seller or a third-party vendor, keeping a close eye on your finances is critical. This means regularly checking your account activity to ensure everything is in order.
You should look for any unusual charges or activities, as these could be signs of fraud or unauthorized activity. Additionally, you'll want to track your sales and expenses. By monitoring your account activity and keeping tabs on your finances, you can help ensure that your Amazon business runs smoothly.
Stay on top of your finances and budget by setting up regular budget reviews. This way, you can track your spending, income, and profit over time. Budget reviews can also help you catch any financial red flags early on.
To set up a budget review, decide how often you want to review your finances. This could be monthly, quarterly, or yearly. Then, gather all of the financial documents you need, including your income statement, expenses report, and profit and loss statement. Once you have all the essential documents, sit down and carefully review them with your CPA.
Pay attention to any changes in your income or expenses. If you see any concerning trends, take steps to correct them. For example, if you notice that your expenses are increasing, but your income is not, you may need to adjust your prices or cut back on some costs.
There are several complexities to consider when you're selling on Amazon, including taxes. That's where Amazon's sales tax services can come in handy.
Amazon offers a broad tax exemption program that can help you save time and money if you decide to participate. The Amazon Tax Exemption Program (ATEP) provides individuals and businesses the ability to make purchases without taxes for every sale by Amazon, its affiliates, and third-party sellers.
ATEP is offered to third-party vendors, but they are not law-bound to participate. That's why applying for the tax exemption program will save you time with your sales tax compliance if you're an Amazon Seller.
Tracking your inventory levels and using good inventory management practices are important for every Amazon seller. Luckily, there are great tools out there to help you stay organized.
Amazon FBA accounting is made easy with Inventory Placement Service. This FBA-exclusive service allows you to track your inventory levels and automatically replenish them when they get low. That way, you never have to worry about running out of stock.
Amazon Seller accounting, on the other hand, allows for more flexibility and has a lot of options you can choose for inventory management software. But the best tool is the one that works best for your business. So take some time to research your options and find the tool that will help you keep your business running smoothly.
A successful Amazon business is all about reaching the right audience. Therefore, you need to carefully track your expenses and revenues to ensure that you are staying within your marketing budget and making a profit.
One of the most substantial aspects of healthy finances is setting a budget for marketing and advertising expenses. This will help you keep track of how much you are spending on these paid ad campaigns and whether or not they are generating enough revenue to justify the expense.
There are different ways to set a marketing budget, but one approach is to base it on a percentage of your overall sales. For example, you might decide to spend 5% of your total sales on marketing and advertising. Once you have set your budget, it is important to track your actual spending so that you can make adjustments as necessary.
You can use accounting software or hire a bookkeeper to keep track of your spending and revenue. Whichever approach you prefer, make sure that you update your records regularly so that you can accurately assess your business's financial health.
Shipping and fulfillment costs can quickly add up, eating into your profits and putting a strain on your cash flow. You can take these simple steps to stay on top of your costs and keep your business finances in check.
By following these steps, you can keep your financials healthy and ensure that your bottom line doesn't take a hit.
Amazon has long been a leading force in online shopping, but did you know that the e-commerce giant also offers a suite of tools to help manage your finances? From payment processing to budgeting and tracking expenses, Amazon has plenty of features that can save you time and money.
You can also check your reports on the Amazon Seller Central dashboard.
Amazon offers a variety of options for customers who want to return items, and the rules vary depending on the type of item being returned.
For example, digital products can be refunded within 24 hours of purchase, while physical items must be returned within 30 days.
Amazon's refund policy is pretty straightforward: if a customer reports that they didn't receive their order or if the condition of the received item is different from what was described in the listing, then the seller is responsible for issuing a refund.
If a customer changes their mind about a purchase, they'll have to contact the seller directly to request a refund; Amazon Marketplace sellers are not required to offer refunds in these situations.
So what does this mean for your business?
If you're seeing a lot of refunds being issued, it could indicate that there's something wrong with your product or your listing, and you'll need to take action accordingly.
Understanding Amazon's refund policy can keep your business running smoothly and avoid any nasty surprises when you check your books.
By accurately calculating and tracking your costs of goods sold (COGS), you can ensure that your business is turning a profit and not running at a loss. There are key details to consider when calculating your COGS, such as product cost, shipping cost, and Amazon fees.
Considering all of these factors will allow you to get a clear picture of your business's profitability and make adjustments accordingly. In addition, it's important to regularly review your pricing strategy to ensure that you stay competitive and maximize your profits.
While you may be able to handle your finances on your own if you are a small business, there are times when it makes sense to get help from a professional.
An Amazon accountant can help you understand and manage your business finances.
An experienced bookkeeper can keep track of your income and expenses and provide you with financial statements that will help you make sound business decisions.
If you're unsure where to start, a financial planner can assess your situation and develop a plan to help you reach your goals. While there are many things you can do on your own to keep your finances in good shape, don't be afraid to seek out professional help when needed. It could be the best decision you ever make for your business.
The accounting process can be a bit tricky to navigate, especially in e-commerce, but with a little know-how and some helpful tips, you can keep your finances accurate and healthy.
Are you an inventory business located in the US or Canada? If you're having difficulty managing your finances, Unloop your troubles with us.
When you partner with our accounting firm, you'll have access to a dedicated bookkeeping team who can help you get your books in order. We also offer accounts payable, forecasting, tax, and payroll services.
Stop guessing at what might be going on with your Amazon account, and let us take a look for you. Book a call now to get a quote!