The success of an Amazon business depends on a lot of factors, and good bookkeeping, we would assume, is one of them.
Whether you’re a new seller or a veteran on Amazon, you have to make sure you’re maintaining books regularly without fail. When the bookkeeping is up-to-date, you won’t have to worry about tax audits, you’ll stay on top of your income and expenses, and you’ll have a clear picture of your cash flow and the overall health of your business.
2.4 million—that’s how many active sellers are selling on Amazon. But interestingly, only 10% of them have been able to generate annual revenue of over $100k.
And it goes without saying, being diligent with your accounts will help you reach the top 10% and soar higher, given that you have quality products that help consumers lead a better life.
Bookkeeping for Amazon sellers may sound like a heavy and difficult task, but once you build a system around it, things get easier.
Follow these 5 tips to become a pro at bookkeeping for Amazon business.
1.Know Your Basics
When you're managing a large number of orders on a daily basis, bookkeeping can become complicated. To keep things sorted, you need to have basic knowledge of bookkeeping and accounting. Things such as accounts receivable (the due payment from customers), accounts payable (the payment you have to make to your suppliers), and inventory information are some of the most rudimentary things you have to know like the back of your hand.
Besides these, you'll also need to keep a track of your total sales, total loans, the amounts spent on obtaining goods, overhead expenditure, and so on.
2. Set Up a Schedule
Bookkeeping can become a tedious task, more so when a lot of transactions get accumulated and you have to register them all at once. Waiting for the end of the year to work on your bookkeeping is not a solution. What you should do is, divide the task into small segments so it doesn't feel overwhelming.
Do your bookkeeping on a weekly or monthly basis, so that every single transaction is recorded flawlessly, and you have a clear idea of what your finances look like. And if you're too busy to take care of your bookkeeping, consider hiring a professional to take care of the task for you.
3. Keep Your Business Transactions Separate
If you're a solopreneur running your business on Amazon, you have to keep your personal and business expenses separate for ease of calculation and tax filing. Generally, businesses with a team have a separate business account, but sole proprietors might mix up their personal and business expenses.
The mix-up can cause a real blunder in case the IRS asks for a tax audit. So it's better to be on the safe side, and keep a clear record of all the expenses you incur towards running your business.
4. Don’t Forget Taxes
As an Amazon seller, taxes are a significant part of running your business. If you have a physical presence in one or multiple states (known as 'nexus'), you will have to collect sales taxes from your customers.
First, you'll have to enquire which state/s you hold a tax nexus in, and then, you'll have to obtain a tax permit. Once this process is done, you can start collecting taxes on every sale made.
You can find more details here.
5. Take Professional Help
If you're already too occupied with work, or you're not sure what's the ideal way to proceed with bookkeeping for Amazon sellers, you can hire a professional to simplify the task.
They will make sure each and every transaction, both incoming and outgoing, is recorded systematically. And since the pros are handling the task for you, you won't have to worry about errors or miscalculations.
Bookkeeping for Amazon Made Easy with Accountants Now
At Accountants Now, our expert bookkeeping service is designed to make accounting seamless for your Amazon business. When you hire our experts for bookkeeping, you'll get:
✓ Unlimited personalized support from experts
✓ Software integration for enhanced accuracy
✓ Secure record-keeping with on-demand access to you
✓ Free business tax filing
Let us take care of the boring tasks, so you can focus on finding the next money-making product! To get started, contact us today!