So that you know what it really takes to be able to do that on your own e-commerce accounting and bookkeeping and especially Amazon.
Bookkeeping is very different from other types of bookkeeping and accounting. there are a few accountants and bookkeepers that actually specialized in accounting for Amazon sellers and actually know it very well and it is an area. That's really changing a lot it's growing and it takes a lot of time and effort to really keep up with what's going on but it is complex and the first thing you need to consider is that your QuickBooks.
Amazon Seller Bookkeeping
1. Set up QuickBooks Online for your amazon business
Here your QuickBooks Online needs to be set up for your Amazon business and they are different accounts that should be in the chart of accounts they're things that you need to be doing differently in your QuickBooks.
2. Track Amazon Income
Quickbooks Bookkeeping Services - You want your QuickBooks to be set up so that it will track your Amazon income your deductions and all of your expenses and to track those amounts separately normally.
What you see with Amazon is that you get a settlement statement every two weeks but it's just one amount and that's not very meaningful and it really doesn't help you to track your profitability and to know how profitable you are until you break out all of those different amounts in your QuickBooks the next thing.
3. Track your income and expenses by sales channel
So if you're a multi-channel seller then you would want to set up classes in QuickBooks Online to show you the income and expenses for each of your channels so then you can track profitability for each channel the other thing that you want to be able to do is to have full visibility into your marketing spend and to really be able to track.
4. Track Marketing Spend By Channel
Then what are those marketing expenses by sales channel and to see how effective your marketing is and to really again have a clearer picture a clear view of your profitability? the next thing that you want to be able to do is to eliminate cluttering up your QuickBooks Online data by importing and bringing in every single transaction.
5. Reduce Data Volume in Quickbooks Online
If your high-volume seller or if you plan to grow your Amazon business and have a high volume of sales. the last thing you want to do is to be bringing in every single amazon transaction into QuickBooks you don't need to do that it clutters up your data file and it will slow it down the next thing to consider is how will you get this data into QuickBooks and we've said it should be summarized ideally we want it to be daily summaries.
6. Manual Entry Or Integration
That is being recorded into your QuickBooks so do you do that manually you can it would be pretty time-consuming you can actually import those daily summaries into your it's your QuickBooks and the app.
We use is called A2X. it really makes it easy to be able to bring in all that data from QuickBooks, and it's a very streamlined process. the next thing that you have to do in your online bookkeeping after you bring in all the data from Amazon.
7. Reconcile amounts in QBO to settlement Received
The reconciliation between all of the amounts that you have received – the fees, Minus deductions. the reconciliation of that amount Minus the amount that you receive on your settlement.
If there isn't a reconciliation then you might be recording amounts into your QuickBooks that are wrong they could be even duplicated. you don't know until you make that reconciliation. And that is the one thing that's very unique. About online accounting services is that you have to be doing these reconciliations. if you're a multi-channel seller then you have to reconcile for each channel.
8. Reconcile each channel to multiple Payment Processors
You have to be reconciling those sales and expenses to each payment processor next is how are you going to track inventory and cost of goods sold if you're a small seller perhaps this isn't as big of an issue you might just want to track inventory once a year for tax purposes.
9. Inventory and cost of goods sold tracking
But as you grow then it is a necessity to track your inventory in your cost of goods sold one for profitability you have to know how you're doing are you truly profitable and - is cashflow.
Your money is tied up in your inventory so you need to know what amount you have tied up in that inventory because that's where the money goes when you sell inventory. If you don't know how much inventory you're carrying it's very hard to maintain positive cash flow.
10. Sales tax liability
You need to be able to track your sales tax liability to ensure also that you're paying in your sales taxes. that you're collecting it's very very important to do that to record those amounts correctly to make sure that you're omitting those taxes to the proper tax authorities and for many of you who are FBA sellers and sales tax can really become an issue and finally in thinking about whether you should be doing your own bookkeeping.
11. Best use of your time
Also, consider is this really the best use of your time you're not a trained accountant or bookkeeper. Amazon bookkeeping is much more complex.
How to do it yourself you may still need the help of a professional to do some of the higher-level virtual bookkeeping services for you and also consider could you spend your time running your business and really growing your business.
12. Grow your Amazon business Instead
Getting more sales instead of spending hours a month doing your own books and realistically also let's think about how long would it take for you to do your own bookkeeping would it be three hours a week four hours a week that's quite a bit of time and probably time.
13. Time away from family
That you don't have that you would have to spend on a weekend away from your family trying to do your own box so think about that perhaps if you're a small seller and make sense you may not have to spend as much time doing it but as you grow especially when you grow that's the time.
When you want to partner up with a professional accounting firm that is experienced in e-commerce accounting who can help you to take care of the financial side of your business and free you up to manage and grow your business.
If you want to grow your Amazon store, we are glad to be of help. Rayvat Accounting is your one-stop-shop for all your amazon seller bookkeeping needs. We leverage the latest accounting software to ensure our clients enjoy the best services. Contact us today and join a happy family of over 500 clients from across the globe.