A Guide to Amazon Seller Bookkeeping

There are tons of nuances around payroll taxes, and it is one of the few things – along with student loans – that can be discharged even if you file bankruptcy. Even if it is only 5% of your total sales, having a Shopify store and/or selling on additional channels diversifies your revenue streams. Your chart of accounts is basically an index of all the categories you are going to use to organize your tax refund calculator transactions. If you ever need a bird’s eye view into your business, your balance sheet is a great starting point.

Why cloud-based software?

You will also have the business intelligence to review what products are selling profitably, which benefit from paid acquisition, and clearly know how much money is on hand to pay yourself at the end of each month. Having proper accounting and bookkeeping systems and processes in place can give you confidence in your numbers and help you make more strategic business decisions. When you know your numbers, this allows you to see what’s working, capitalize on any early trends, and drive business growth.

Amazon Accounting key takeaways

While bookkeepers and accountants sometimes do the same work, they have different skillsets and levels of expertise. A CPA, or certified professional accountant, will charge considerably more than a bookkeeper to do your books. Be sure to find the level of help you need for the current state of your business. Cloud accounting software, like Xero, is great at automatically syncing all of your bank transactions to your feed. However, occasionally one of your bank feeds might have an outage or some transactions go unaccounted for. You can run a reconciliation report to see if there are any inconsistencies between bank and credit card statements and what is showing up in Xero.

But neither month is really a good reflection of what is happening. While you may be tempted to go with your personal bank and open additional business accounts, there are other options out there worth exploring. Each bank and account type has different benefits and stipulations.

1. Even if it is only 5% of your total sales, having a Shopify store and/or selling on additional channels diversifies your revenue streams.
2. This is the amount of revenue after COGs and expenses, directly related to your primary product.
3. Accurate tracking of expenses and income is fundamental to effective bookkeeping.
4. Errors usually occur when businesses purchase new inventory.

However, it is a more complicated system and requires more expert analysis, which is where the skills of a qualified accountant will most likely be required. FBA is not only designed to support logistics, it is also there to make customer service, international sales, inventory and customer returns more easy to manage. There are fees attached to FBA, including inventory storage fees, fulfilment fees and other occasional fees incurred case-by-case.

Make Amazon accounting fast, easy and accurate with Link My Books

At tax time, you’ll need to prove your expenses are valid, so figuring out the proper storage for all of your financial records will be crucial. Your chart of accounts is a list of categories your business can use to differentiate your financial transactions. It offers an overview of every area of your business that spends or makes money. Our intuitive software automates the busywork with powerful tools and features designed to help you simplify your financial management and make informed business decisions. Download our ecommerce accounting tool kit and learn how to build a financial system to scale your business beyond 7 figures. The other aspect is asking lots of questions to learn more about them, how they work, and what processes they follow.

Sometimes bookkeeping becomes too tedious and unwieldy of a task, requiring you to spend too much time on admin and not enough focusing on your business. In partnership with A2X, we created a tool to help called the eCommerce Bookkeeping Checklist. It lists all the bookkeeping tasks you need to do on a weekly, monthly, quarterly, and annual basis to stay on top of things. Manually recording COGS and inventory can be complicated and finance and accounting outsourcing time consuming.

This guide offers practical solutions to address these challenges, focusing on efficient bookkeeping practices and leveraging modern tools. We’ll discuss how automation and solutions like Link My Books can simplify your financial management, reducing manual effort and minimising errors. However, once you reach that point, or if you wish to register for VAT voluntarily, a specialist accountant can ensure you’re going about this the right way and ticking all of the necessary boxes. The accrual method is typically preferred by larger businesses or those scaling quickly as it offers a more accurate and definitive view of finances.

Inventory is your business, when COGS is high that means you have been holding onto inventory too long, or event production are not selling it at optimal pricing. This metric will be a good indicator of any changes that need to be made to your product lines. At the very least you will need to perform COGS calculations at the end of the year.

Categorised in: Bookkeeping

This post was written by vladeta