Bookkeeping isn’t most people’s idea of fun. But if you’re planning to sell on Amazon and make it big, this is something which you’d seriously have to consider. Numbers are everything when you’re selling on Amazon. Figuring out how much profit you make per SKU, taxes, how much inventory you can afford to order, etc. are just some of the numbers you need to know where your Amazon business stands.
Every inflow and outflow right from the proceeds of the sales to expenses incurred in the process must be recorded to the slightest detail, especially if you’re an FBA seller. This requires good bookkeeping and accounting. If you’re serious about the business and have a long-term vision, it makes sense to have a proper system implemented right from the start.
Whether you’re outsourcing Amazon FBA bookkeeping or attempting to do it yourself, here are a few things you should remember.
Separate Accounts for Business and Personal
The foremost rule for an effective and efficient bookkeeping system is separate records for both business and personal transactions. Things like paying for inventory from your personal bank account or using a business credit card to pay your energy bills are a strict no. Link your business bank accounts and credit cards to your accounting software.
Mixing business and personal transactions will not produce clear records, and you will end up in a mess later.
Outsource and Automate Wherever Possible
If you’re new to bookkeeping or unless you have a background in accounting, you are better off outsourcing to e-commerce accounting professionals who know the game. Remember, it is not something which you can learn overnight. This requires specialized knowledge and expertise, and therefore, it’s best to leave it to experts.
Even if you’re familiar with bookkeeping, know that e-commerce bookkeeping is an entirely different game because your Amazon business is entirely cloud-based. Therefore, on the off-chance that you’re planning to take things in your own hands, it makes sense to invest in proper accounting software like QuickBooks, Xero, etc. for best results.
Moreover, it reduces manual entry and speeds things up. This way, you can focus more on sales and business growth.
Have Some Liquid Cash at All Times
Cash is the king in business. As a seller, you will need to maintain stocks and pay your suppliers. There may be days when you have to wait for your payment to come through from Amazon, and you need to order stocks.
Waiting for Amazon to clear your dues and then ordering from the supplier can result in business loss. Therefore, it’s crucial to have cash in hand so you can order stock, especially on busy days. This will keep the business going.
Don’t Procrastinate Accounts Reconciliation
Leaving accounting for later means you will miss out on necessary entries, fail to see things promptly, and find yourself disorganized regarding tax planning and preparation. The best solution is to automate everything by investing in good accounting software.
Tasks like invoicing, accounts payable, inventory, etc. can be automated. The accounting software is mostly cloud-based and has integrations with other apps that you use for inventory and time tracking. Once that is done, you’ll need to reconcile your books weekly to ensure everything is in order.
Make Sure You Record Cash Expenses
Sometimes, you may make cash payments for some petty expenses like taking your supplier out for coffee or paying your employee. These are tax-deductible expenses that should be recorded, but you may often forget to record them.
If you want your records to be 100% accurate, you need to record all cash expenses. A better option will be to avoid paying cash for any of the business expenses. Instead, use a business credit card or bank account to make payments.
Selling on Amazon can be fun. A whirlwind of activity—creating listings, uploading the inventory, winning the buy box, etc. might all seem like a frenzy. However, you’re probably in it to make money, too and the key to that is Amazon FBA bookkeeping.
If you dream of being a successful FBAseller, you have to ensure that you have a properly set up bookkeeping and accounting system right from day one. Invest in good accounting software and hire e-commerce accounting experts for the task. They will review your current set-up and suggest improvements wherever necessary.
You’ll have to spend a few bucks, but it will be worth it. That way, you’ll be assured that your business is backed by a solid foundation right from the start. Choose a service that offers a fixed, flat rate, no binding contracts, and complete peace of mind.
