Online selling of products is a perfect way to start and manage a business. It’s an easy way to make money. Accounting for Amazon FBA Sellers is the best option if someone wants to sell anywhere globally. The Amazon market is massive and is growing rapidly due to the online shopping of products.
Amazon has made it easy for FBA sellers to sell their products with the motto “you sell it, we ship it.” One can easily launch a thriving business by using Amazon’s fulfillment services. The question here arises what happens when an FBA seller’s product is sold through Amazon, and a sale is made? How does someone know that they have earned a profit or not? The efforts and time someone have put in are worth it or not.
To maintain the sales records, one should maintain bookkeeping and accounting for Amazon FBA sellers. Amazon accounting comprises many things like forming a solid foundation of records maintaining the accuracy and compliance with the tax of FBA sellers across state and local nexuses, and for this, bookkeeping is necessary.
Basic Bookkeeping and Accounting Principles
Bookkeeping is sometimes difficult, especially if someone has a larger sales volume. But if an FBA seller does it regularly and makes it a part of his daily routine, it will be easy to manage and maintain. Some key accounting information that a seller needs to maintain track of are:
Accounts Receivable
Accounts receivable means the money that is due on the FBA seller by the customer against the sold product. Unless the seller receives the price of the product upfront. The seller needs to monitor accounts receivable and make sure that the amount comes on in time. Keeping and tracking this means the cash flow is healthy, and it will also help the seller to make future decisions about inventory and products.
Accounts Payable
Accounts payable shows what the FBA seller owes to his suppliers. By maintaining, these sellers will have easy access to the suppliers whose payment is due.
Inventory
This is the most important part of bookkeeping for an FBA seller of Amazon. It shows the seller how many products the seller has in stock. What is the trend of sales of products? Which product the seller needs to order from the supplier and when.
The track of seasonal sales is helpful to the suppliers to order products before the upcoming season. So that the supplier will have sufficient products to meet the demand.
FBA sellers can create charts to monitor inventory. Like the seller can see when he needs to reorder. How much inventory if left in the warehouse and in Amazon.
As an FBA seller on Amazon, you should have knowledge about Amazon FBA Inventory Management to avoid any inventory disruptions in your business.
Purchases
Purchases include the supplies the seller will need to maintain its office or workplace. To determine the profit, the supplier should subtract the amount spent to buy purchases from the sales.
Loans Payable
Loans payable will include all the amount the seller has borrowed from someone. This may consist of the price of equipment or the cost of the seller’s products. Loans payable will show sellers how much money they have borrowed and from whom. It also indicates when the amount is due.
Sales
Sales show the price of products that the seller has sold. It shows the number of sales the seller has made and shows a clear picture of the business. Where the business stands right now and where it is heading to.
Payroll
If the seller has employees working under him, he needs to maintain the record of all payrolls to meet the tax requirements.
Owner’s Equity
This indicates how much money the seller has put into the business. If it is a collaboration of two or three sellers, then the record of all their financial input is needed to maintain.
Accounting Software
Many accounting software is available to maintain the books and account for Amazon FBA sellers. Accounting automating software is very helpful and guarantees accuracy in keeping the books. The seller is recommended to have quality accounting software to maximize its profit. Some accounting software that a seller can use are:
Activate + QuickBooks Desktop
Acctivate is used for proper inventory and warehouse tracking of products. This is the best overall accounting software for Amazon FBA sellers. Acctivate is used in combination with QuickBooks Desktop to maximize the sellers’ profits.
AccountEdge Pro
It is the best desktop software for small FBA sellers. Small sellers who want to increase their sales use the tools of AccountEdge Pro to fulfill their needs.
GoDaddy Online Bookkeeping
It is the best cloud-based accounting software for small FBA sellers. It is helpful for sellers with no accounting knowledge to keep track of their financial status. This software is available in easy monthly installments, easy to pay for small sellers.
QuickBooks Online
This software is for large Amazon FBA sellers who want to use cloud-based software. It has tools to manage a large quantity of merchandise and maximize profits. Sellers use this software to move a large quantity of merchandise through the Amazon storefront. If the seller is using other platforms along with Amazon, it also has the feature to manage multiple online storefronts.
Fetcher
This software is best for small and mid-sized FBA sellers. This software integrates the seller’s Amazon account and analyzes the data directly. This Fetches software grows when the sales of FBA sellers will increase due to its three tiers expanding the feature.
Xero
Xero is used by sellers who want to focus on their increased sales and are not interested in other accounting matters related to products. It has many features which are free of cost. Like it does not have a set up free. It has a free trial period and a free web-based support system. It is the flexibility of integrating with hundreds of third-party applications.
FreshBooks
FreshBooks is also cloud-based software at an affordable price. Its best feature is powerful invoicing. It provides the quality to generate reports so that it will be easy for the FBA seller to make decisions about the sales of the products.
Accounting Suite
Accounting Suite has a variety of features that are helpful and easy to use to maximize profits. Its Cloud Commerce module is a powerful feature for Amazon FBA sellers. Both small and large sellers can use this.
Denali Business
It is the best software for large or enterprise-level sellers. It is used to make reports. It also has the banking reconciliation feature with the reports of the FBA seller.
Kashoo
Kashoo is the world’s simplest accounting software. It is used to print cheques, pay credit card payments, and develop and send invoices. It is very easy to use. It is an affordable cloud-based platform.
Conclusion
Amazon FBA sellers need to maintain books and records of all the inventory, suppliers, sales, payroll, loans, and equity to run its business. The record of all these can be maintained by using different accounting software. FBA sellers will be able to make decisions about the products and their sales by using the accounting record.
