Amazon’s storefront has created an amazing opportunity for many entrepreneurs who have bee looking for a cost efficient way to start their own business. But this opportunity comes with its own set of challenges. One crucial aspect of running an Amazon store, that business owners often struggle with, is bookkeeping. As an Amazon store owner, maintaining accurate financial records is needed for tracking your sales, monitoring your expenses, and ensuring that you are compliant with any tax regulations. This blog post will provide a guide to effectively manage bookkeeping for your Amazon store and highlight the steps you can take to streamline the process for you and your bookkeeper.
Step1: Separate Business and Personal Finances:
The easiest way to streamline and organize your bookkeeping is to separate your business and personal finances. The best way to do this is to open a separate bank account and credit card exclusively for your Amazon store transactions. This separation simplifies record-keeping, minimizes confusion, and provides a clear view of your store’s financial performance.
Step 2: Track Sales and Expenses:
Keeping detailed records of your sales and expenses is the key to accurate financial reporting. One good way of collecting this information is using Amazon’s reports and analytics tools to track any sales, fees, refunds, and other transactions. Additionally, use cloud-based accounting software such as QuickBooks or spreadsheets to record and categorize your expenses, including product costs, shipping fees, advertising expenses, and any other business-related expenses.
Step 3: Monitor Inventory:
It is essential to track your inventory levels, calculate the cost of goods sold, and maintain accurate records of the value of your inventory. Monitoring your inventory in this way ensures accurate financial statements and helps identify any discrepancies or potential inventory-related issues.
Step 4: Sales Tax Compliance:
Understanding and complying with sales tax regulations is crucial for any business owner to run a successful company. As an online seller, you are responsible for collecting and remitting sales tax such as GST PST or HST to various provinces or jurisdictions. Additionally regulations around sales tax can be ever changing. Keeping up with these rules and regulations can help you ensure that you are collecting and remitting the appropriate tax amounts to the relevant authorities. One way of simplifying this process is automating it with sales tax software to alleviate the burden of manual calculations and filing.
Step 5: Reconcile and Review Regularly:
Regularly reconcile and review your financial records to help you identify any discrepancies or errors before they turn into a larger issue. Reconcile your bank accounts, credit cards, and Amazon settlements regularly to ensure all transactions are accounted for correctly. Conduct periodic reviews of your financial statements to assess your store’s financial health and identify areas for improvement.
Step 6: Seek Professional Assistance:
Managing your books can be complex, and seeking professional assistance can provide you with valuable guidance and peace of mind. LedgersOnline has a team of qualified bookkeepers with extensive experience in e-commerce and online retail accounting and bookkeeping. They can offer insights, ensure compliance, and provide expert guidance on optimizing your store’s operations. We’re also a software agnostic provider, meaning we can integrate with your existing bookkeeping software to support you. So whether you’re using Quickbooks, Xero, or another platform, you’ll get the utmost support from us. Contact us today and get started.