QuickBooks for Amazon might just be the solution you need to get your financial management game on.
Are you an Amazon seller who is struggling with keeping your books up to date? Do you find yourself with your hands full keeping the business running?
If you answered yes, then you should consider using QBO for Amazon sellers. In this post we are going to cover:
- What is QuickBooks?
- What Are the Benefits of Using QuickBooks for My Amazon Business?
- How Do I Set Up QuickBooks Online for Amazon?
- How Can I Utilize QBO Reports?
- Can I Hire Someone to Do This for Me?
- Why Do I Need to Stay on Top of My Books as An Amazon Seller?
Without further ado, let’s get started!
What is QuickBooks?
QuickBooks is probably the most well-known cloud-based accounting and financial management solution for small businesses and startups. However, even if small businesses are their forte, their software is flexible enough to cater to medium-sized businesses. You can select the QuickBooks pricing plan that is best suited for your needs. The likely reason for their popularity is that their software is affordable, easy to set up, and can be used on a desktop or via QuickBooks Online.
What Are the Benefits of Using QuickBooks for My Amazon Business?
Now that we know a little about the software, why should you use QuickBooks for Amazon sellers?
Performance Tracking
Want to know how well your store is performing? Well, QuickBooks for Amazon sellers allows you to generate several valuable reports to monitor your cash flow and inform your next business move. You can run reports instantly and see if your sales are on the right track or if you’re off. From the data in these reports, you can create budgets that will help you achieve your profitability goals.
Not only does QBO help you with budgeting and spending, but it also helps you with marketing by providing actionable insights and analysis to improve your sales. Access valuable data on customer sales behavior that shows you popular products by region or season, and manage your inventory accordingly.
Automate Transactions
Automate your bookkeeping and save valuable time, effort, and ensure complete accuracy. Record all sales and adjust totals automatically.
Automatic Sales Tax Calculations
Simplify and automate sales tax calculations (GST, HST, PST, and QST) with QuickBooks. Enter custom tax rates and access reports on what you owe in real-time. Get notified of upcoming tax deadlines.
Multiple Currency Management
Selling on Amazon gives you access to an international customer base, meaning you are also dealing with multiple different currencies.
This can be tricky when it comes to keeping your books in order. However, QuickBooks for Amazon makes this a lot easier by taking exchange rates into account automatically. This way, you can accept international payments, record these transactions, and track your expenses and profit easily.
Collaboration Features
If someone other than you need to view your books or reports, you can give them customized access with QuickBooks. Keep your login information safe while giving the necessary people the data they need.
Additionally, QuickBooks also offers payroll and time-tracking solutions so you can track and pay workers efficiently. Let them log their hours and pay with direct deposit. Don’t worry about any applicable taxes, because they also handle that for you.
Inventory Management
QBO for Amazon sellers is an all-out tool for managing your inventory. Track all your items on an individual level whether they are lost, defective, or damaged. Track which products are selling well. Whether you are dropshipping or handling your products yourself, you can sync your products across all warehouses and sales channels. QBO can also provide automatic low-stock alerts and smart reordering.
How Do I Set Up QuickBooks Online for Amazon?
Connecting Your Amazon account with QuickBooks
If you want to connect your Amazon Business account to QuickBooks, these are the steps to follow:
- Sign in as an admin on QuickBooks
- Download the Amazon Business Purchases app from the app Page.
- Sign in as a primary admin on your Amazon Business account
- Choose what date to start importing data from Amazon to QuickBooks. This cannot be altered once set.
- QuickBooks can then sort all purchases and connect them to your bank and credit card records.
- Transactions will be imported once a day for review.
- Review the work and approve.
Setting Up Your Chart of Accounts
Your Chart of Accounts mainly includes your Balance Sheet account (assets, liabilities, and equity) and your Income and Expense account (money coming in and going out).
While these two will be sufficient for most businesses, you can add, edit, or delete a count as needed.
To add an account, you need to navigate to Bookkeeping > Chart of Accounts > Select New > Select Account Type from menu > Select Detail Type from menu > Fill in info fields > Save and Close
To edit an account, you need to navigate to Bookkeeping > Chart of Accounts > Select account to edit > Select the arrow next to Account history or Run report > Select Edit > After editing, Save and Close
Using Tags and Categories
Track and label your transactions using tags. These tags can be grouped and you can even run reports based on specific transactions using them.
To create a tag group, go to Settings > Tags > Select the New dropdown > Tag group > Name it > Select color > Save
To create a tag, go to “Tags”, name it, and select “+Add”
Sort your transactions by adding categories to them in the Transactions tab in your QuickBooks side menu. Select the box representing the connected bank or credit card you’ve connected to view your downloaded transactions. There you can Confirm or Review a transaction. QuickBooks can automatically assign categories but for those labeled “Review,” you can assign a category by filling in the respective fields.
Reconciling Your Accounts
Reconciling is when you review your QuickBooks account and check if it matches your bank and credit card statements. During this process, you will be comparing all your transactions against all those recorded in QuickBooks.
Check out their comprehensive QuickBooks reconciliation guide.
Getting Into a Regular Habit
One of the most important things that you can do to make QuickBooks work for your Amazon business is to use it regularly. Before you skip to the next point, think about it. When you make bookkeeping and accounting a regular habit, you can more easily stay on top of everything.
But it’s not always that easy to do. You really need to set aside the time to make sure that you are recording entries and transactions almost as they come in. Otherwise, some are bound to slip through the cracks. Then, you could get into trouble with the IRS. At the very least, you could end up with incomplete records. This can, in turn, rob you of important deductions or make your business look less valuable than it really is.
Set Up Sales Tax
The steps to set up your QuickBooks automatic sales tax are:
- Select Taxes in your side menu
- Click “Use Automatic Sales Tax”
- Enter your business address to determine tax rates
- Select Agencies (if any) you collect sales tax for.
- Click “Next”
- You can create invoices immediately or set your sales tax schedule in the “Prep for Taxes” option in your side menu by clicking Sales Tax and selecting filing frequency
- Save
- Go to “Sales Tax Settings” if you want to add an agency, edit your current agencies, or edit filing frequencies
Track Your Inventory
The tracking inventory function is only available on the QuickBooks Online Plus and Advanced plans.
You can see your current inventory, get smart restocking alerts, and view insights on your products sold as well as expense insights. You can even enter non-inventory products and services.
To turn on your tracking, you need to go to Settings > Account and settings > Sales > Products and services > Edit > Show Product/Service column on sales forms > Turn on Track quantity and price/rate and Track inventory quantity on hand > Save
Recording Payments in QuickBooks
After you process a customer payment, the next step is to mark it as paid by recording it in QuickBooks. You can record full or partial payments and QuickBooks tracks any balance. You can also group multiple payments into a single deposit.
How Can I Utilize QBO Reports?
You can run several useful reports with QBO for Amazon sellers. You can check the status of your sales to inform your inventory restocking, get a general overview of your profitability, check your spending, and customize reports to fit your business needs. Run reports for specific accounts, set general report preferences (accrual or cash), and even export, email, or print them to share with whoever needs access to them.
To run basic reports, go to Business Overview> Reports > Search reports by name or browse > Select report > Run report
Can I Hire Someone to Do This for Me?
While we don’t necessarily discourage you from setting this up yourself, the process can take quite a bit of time and effort. You would have to spend time learning the software and familiarizing yourself with all the settings.
Instead, you can hire a virtual assistant to get your accounts set up or you can also hire a bookkeeper or an accountant who has experience using QuickBooks Online.
Why Do I Need to Stay on Top of My Books as An Amazon Seller?
When you are selling a lot of products at a high volume, you will see a lot of transactions happening on a daily basis. All of this can get out of hand really quickly if you aren’t vigilant. You need to stay on top of your books if you don’t want to end up in a big mess. Believe us, it’s a lot easier to keep track of it all than to try to backtrack with your bookkeeping and reconcile things that you can’t remember.
When you have clean books, you are much less likely to make accounting errors that can get you into trouble. We always recommend keeping accurate financial records because this is a great help during tax season. Good financial management is always a good idea. This also means that you will have an accurate picture of your cash flow whenever you want. This way, you will always have a good idea of how your business is doing at all times.
What Is EcomBalance?
EcomBalance is a monthly bookkeeping service specialized for eCommerce companies selling on Amazon, Shopify, Ebay, Etsy, WooCommerce, & other eCommerce channels.
We take monthly bookkeeping off your plate and deliver you your financial statements by the 15th or 20th of each month.
You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.
Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.
And here’s some free resources:
- Monthly Finance Meeting Agenda
- 9 Steps to Master Your Ecommerce Bookkeeping Checklist
- The Ultimate Guide on Finding an Ecommerce Virtual Bookkeeping Service
- What Is a Profit and Loss Statement?
- How to Read & Interpret a Cash Flow Statement
- How to Read a Balance Sheet & Truly Understand It
Conclusion
Integrating QuickBooks for Amazon can help you get on top of your finances before they get unmanageable. If you’re convinced, follow our guide and maybe even check out our QuickBooks tips for Amazon sellers.