Many ecommerce businesses get their start by selling on Amazon, which offers a user-friendly platform and nearly instant gratification. But once they’re in, it’s easy to favor sales over back-office management and accounting.
So when it comes to accounting for Amazon sellers, success is all about building a solid foundation that ensures accuracy and tax compliance with state and local regulations. Luckily, getting started isn’t difficult, especially when you have tools that connect Amazon and QuickBooks or another bookkeeping software.
Explore this quick guide to accounting for Amazon sellers, and discover more about what it means to build a foundation, stay accurate, and maintain tax compliance.
Build a foundation for Amazon seller accounting
Establish good habits by developing an accounting system that can scale with your business. Excel and manual data entry may work if you’re just starting out. But it won’t be long before you have to trade spreadsheets for accounting software.
You have options if you’re looking for an Amazon seller accounting software that can track sales, fees, and more from your Amazon store. For example, QuickBooks can help you manage income, expenses, invoices, payments, and cash flow from your Amazon store.
Ensure accuracy by automating Amazon accounting
As your business grows, you may need to add more sales channels or dive deeper into your sales data. In that case, consider connecting Amazon — and all your sales channels — to your accounting platform via accounting automation software.
Among other benefits, connecting your ecommerce and accounting solutions can help ensure the accuracy of your sales data and inventory. For example, Amazon makes deposits every two weeks and only supplies your net total at the end of that period. So it’s hard to get a more granular look at which items are selling, what’s generating the greatest profit, and how much in fees you pay to Amazon.
You can track this and other sales data manually through your store’s back-end and analyze it via spreadsheet. Or you can integrate Amazon and QuickBooks, which can ensure to-the-cent breakdown of sales data.
You can further ensure accuracy with inventory management. The right automation solution uses an automatic multichannel inventory sync that updates on a customizable schedule. As a result, you can instantly track and sync orders, inventory quantities, and prices across stores. And you can easily list new products from QuickBooks to stores and marketplaces.
Stay tax compliant as an Amazon seller
South Dakota v. Wayfair changed ecommerce forever by allowing states to impose sales tax on companies selling to their residents. Businesses that don’t comply, even unknowingly, are subject to hefty fines and other penalties.
So ecommerce sales tax compliance is a key pillar of success for Amazon seller accounting. Connecting your accounting software to a tool like Avalara Avatax can help your business stay up to date on state and local tax regulations, so you never have to worry about penalties.
Worry-free accounting for Amazon sellers
Accounting may not be your favorite part of running an ecommerce business, but you don’t have to dread it. Building good habits from the very beginning can ensure accuracy and compliance even as your business grows.
Webgility for Amazon sellers is an award-winning accounting automation solution that makes accounting and inventory management workflows a breeze. Eliminate manual data entry, improve customer experiences, and make data-driven decisions about your business.