Most of the Amazon sellers lack an understanding of how to start bookkeeping, which is essential while running a business. Bookkeeping for Amazon sellers involves recording and storing the day-to-day financial transactions of the seller.
There are some fundamental principles that Amazon sellers need to follow. Proper bookkeeping will help you evaluate your business performance, profit earned, and also the long-term viability of your business. When your books are accurate and up-to-date, you can even apply for a business loan without any problem. Also, for tax purposes, it becomes easy to spot discrepancies if they occur.
Whether you are new to the domain of online selling or an experienced seller, the below guide will help you select the best experts to handle bookkeeping for Amazon sellers.
1. Reconcile Accounting Information
For Amazon sellers, bookkeeping can be daunting. But by incorporating this system into your daily routine, you can make the process much more manageable. Some of the vital information that should be accounted for by the amazon seller is:
- Keep track of income and expenses regularly instead of leaving accounting until the end of the year.
- Separate personal and business finances.
- Account for all the products to monitor your inventory.
- If there is more than one sales channel for your product, you need to separate its income and expenses, such as Amazon US from Amazon UK, etc. This will also help you know which channel is giving you more returns.
- Record all information related to loans payable
- Amazon sellers also have to manage taxes, and if they are not appropriately classified, you may incur a penalty or miss out on savings.
2. You’ll Need Bookkeeping Software
Reliable bookkeeping software is a must for Amazon sellers. Instead of managing bookkeeping on your own, using an automated solution will give you better results.
QuickBooks Online and Xero are viable options to choose from. The software works for businesses of all types and sizes. They are fast, accurate, and reliable software that also allows easy access to your data from anywhere. This software also provides reconciliations to bank accounts and creates critical financial reports.
Quickbooks Online
Quickbooks online is a software that tracks your assets and liabilities and can run simple financial reports. For an inventory-based business-like Amazon, using this software will give you a picture of the financial health of your business. Amazon Bookkeeping is usually done on an accrual basis.
However, QuickBooks can be set up to handle cash or an accrual basis accounting method according to different needs. It can also generate a Profit and Loss Statement needed for your taxes. The software also offers basic inventory management to help you keep track of your stock.
Xero
Xero has a simple user interface and is the best bookkeeping software for novices. The software reconciles Amazon transactions easily and lets you stay in control of your finances in real-time. This accounting software is based on an accrual basis the way Amazon sellers need it. Xero is a better choice for people in the UK as it publishes reports in style suitable for UK users.
Each Amazon seller has their own needs, and they can select any of the automated solutions. These solutions offer accuracy and speed and are a great way to keep track of all your money effortlessly.
3. Understand about Bookkeeping Tools For Account Integration
Instead of creating manual entries, using automated bookkeeping tools will save you a ton of time. Amazon sellers can use the bookkeeping tools designed for them called A2X, Taxomate, or Greenback.
A2X
A2X is a software that makes account integration easier. This tool takes the information from the Amazon settlement file, creates invoices, and sends it to the chosen bookkeeping software. This tool makes Amazon settlement payments visible in the bank account and is easier to reconcile.
Taxomate
This automated Amazon Bookkeeping solution fetches information such as income and cost of goods sold from Amazon to your accounting app. This accurate and straightforward software is basically used to calculate the correct amount of tax after the tax rates are entered.
Greenback
This accounting software automatically uploads Amazon transactions to the accounting software and attaches a copy of the source documents as a reference.
With the use of automated tools and the right software, bookkeeping for Amazon sellers is now simplified, but you need the expertise to understand the basics and implement the best ways to make the most of them. Finding the best bookkeeping services will help you make better decisions on finances and business and at the same time, stay in compliance by keeping proper records.
