Integration with Online Platforms

Managing your Amazon finances can be complex, especially when you sell on other platforms, too. It usually means having to integrate your bookkeeping software and several online platforms to simplify the record-keeping process. 

Manual transaction entries can be time-consuming and prone to errors. Selling on more than one platform independently can lead to duplicate entries. It can also make accurate inventory tracking difficult.

The solution is to use bookkeeping and inventory management tools and integrate them with your online platforms. Third-party integration apps bridge platforms and software.

Popular options include:

• Bookkeep to connect Amazon to QuickBooks Online, Xero, or Zoho Books
• ConnectBooks to connect Amazon to QuickBooks Online 
• Link My Books to connect Amazon to Xero 

You can also choose an accounting tool that has built-in connectors for popular marketplaces like Amazon. QuickBooks Online, for example, has a connector app that’s great for smaller Amazon businesses.

Manual data entry is impractical for businesses with a lot of data to manage. More than error-prone, it all gets very tedious and time-consuming.

When you sell a lot, you need to pay close attention to inventory levels at all times to avoid stockouts and overselling. Digital payments, moreover, offer convenience, but also heighten the risk of fraudulent transactions. 

We recommend that high-volume sellers invest in cloud-based inventory management and accounting software. Make sure the tools you choose are secure and integrate seamlessly with Amazon Seller Central. Automating data imports for sales, fees, and refunds can cut the workload and error rate down significantly. 

Ecommerce accounting software can manage automated workflows to: 

• categorize transactions 
• handle recurring expenses
• Perform scheduled bank statement reconciliation 

You can also set up security protocols within Amazon Seller Central and your payment processing services to fight fraud.

International Currencies and Tax Regulations 

Choose accounting software that can handle multi-currency transactions, including automatically recording exchange rates. It should also be able to automate sales tax calculation and collection based on customer location.

Especially when you’re starting out, ask for advice from a tax professional who specializes in international ecommerce. This can help you avoid issues around tax obligations and missed opportunities involving tax strategies.

Note that nexus rules can get very complicated depending on your location and sales volume in different countries. Tax treaties between the country where your business is registered and the countries you sell to can also impact tax obligations.

Daily Bookkeeping Responsibilities

1. Record Sales Transactions

• Order details – order ID, product name, product quantity, price, discounts and promotions applied.
• Payment received – amount after Amazon fees.

2. Record Expense Transactions

• Costs of products sold – plus shipping costs from suppliers.
• Amazon fees, in separate entries for each type.
• Shipping costs outside of FBA fees.
• Advertising costs – daily spending on Amazon PPC campaigns.
• Other business-related expenses.

3. Track Inventory Adjustments

• Product sales – quantity sold.
• Inventory adjustments – returns and refunds and damaged products.

Daily inventory level monitoring helps you replenish before stockouts occur and prevent costly fees for overstocked products. You can also spot slow-moving and stagnant inventory so you can strategize better.

Monthly Reconciliation and Reporting

Procedures Specific to Bookkeeping for Amazon Sellers:

1. Download your monthly Amazon Seller Central sales summary and settlement reports. 
2. Reconcile Amazon data with your bank statement within the first week of every month. Investigate any discrepancies and contact Amazon if you can’t reconcile them.
   • Match your total sales recorded in your accounting software with your sales summary report. 
   • Match all Amazon fees deducted from your sales with your entries.
3. Match the total net deposit amount from Amazon with your bank statement. Investigate any discrepancies in deposit amounts or unmatched transactions. Contact Amazon if you need help with unexplained refunds or chargebacks.
4. Generate a reconciliation statement in your accounting software when all discrepancies are resolved.

Generating Useful Amazon Seller Reports

Use Amazon’s built-in reports for sales, fees, inventory, and customer metrics. You can also create custom reports in most of the top accounting software tools to analyze specific areas of your business. We recommend looking into:

• Sales performance – overall sales volume, total number of units sold across all products, average product price, and sales growth trends.
• Profitability – gross profit, Amazon fees, and profit margin
• Inventory – average levels, turnover, and stockout rate. 
• Marketing and advertising – total spend, ROAS, and marketing channel performance. 
• Customer metrics – order conversion rate, customer acquisition cost, and customer reviews and feedback.

Keep looking for areas where you can improve using these data insights. Optimize pricing, marketing campaigns, and inventory management. Keep an eye on your net profit margins and adjust your strategies to increase your margins.

• Don’t confuse sales numbers with Amazon deposits after fees, or forget to properly categorize them.
• Note that Amazon’s date range summary reports don’t account for disbursement schedules and fees.
• Don’t forget to track all costs associated with acquiring products.
• Never mix personal and business finances. 
• Don’t neglect international currency fluctuations, tax implications, and record-keeping for different regions.