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A Guide to Amazon Seller Bookkeeping

How can you find a reliable accountant to help you with your Amazon financial records? Here's our short guide to help you find the assistance you need.

A Guide to Amazon Seller Bookkeeping
Julia Grant

April 21, 2022

Listen - finances are hard. Personal finances, business finances - it’s all difficult! The good news is that your Amazon finances don’t have to give you a headache. The sooner you start professionally managing your e-commerce books, the less of a hassle they will become. In this article, we’ll unpack why bookkeeping matters for Amazon sellers and what to look for in an Amazon accountant.

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The Importance of Accounting and Bookkeeping for Amazon Seller Businesses

Bookkeeping and accounting are essential aspects of every business, but it is uniquely frustrating for those working in the e-commerce sector. Things are never as simple as they seem when you’re dealing with e-commerce, and it’s crucial to have someone working on your books who knows what they are doing. 

Papers on a desk, on top of and inside of a purple manilla folder. A phone is on top of the papers, and glasses are on top of the doler. Paperclips are scattered around the table. Paper is labeled "Small business accounting checklist."

Having a system in place for proper bookkeeping helps you:

  • Keep a record of the financial health of your business
  • Make wise financial decisions
  • State up to date with taxes and other fees
  • Avoid being overcharged or underpaid
  • Know what you can afford to take out as income
  • And more!

Bookkeeping and accounting help you generate an accurate Profit & Loss Statement (P&L) that shows you the difference between what you made in sales, what you spent, and what you actually generated as net income. It allows you to notice discrepancies before it is too late to manage them, and helps you stay current with sales tax and other taxes throughout the year.

On top of all this, maintaining accurate financial records (e.g. cash-basis accounting report, sales tax tracking, inventory management, sales tax permit, double-entry accounting report, etc.) is important if you ever want to apply for a business loan or sell your Amazon business. Lenders and buyers will want to evaluate your books, which must be properly organized beforehand. Start early to avoid pain down the road!

A woman at a table with many financial documents.

Why I Need An Amazon Accountant

All of these benefits sound amazing - but there is a lot of work that goes into accessing these benefits. Accounting is difficult for any business and should be handled by professionals who know what they are doing. 

Far too many Amazon sellers and business owner try to skate by while using cloud-based accounting software or service and trying their best to keep things organized. This usually results in accounting errors and incomplete records. The DIY approach leaves you scrambling to create and find all the necessary documents every time that you need them. This makes dealing with accounting even more of a headache and creates loads of tension around tax season. 

A woman grabbing her hair in frustration at a table, in front of a $5 bill and receipts.

This is not the kind of task you can undertake on your own. You can try to do your own bookkeeping by extracting reports from your Amazon seller central account or find the best accounting software out there. But if you’re serious about keeping your business above board, maximizing your deductions come tax season and tracking sales tax, maintaining an accurate understanding of your financial health with a proper accounting system, and impressing future buyers/lenders - trust a CPA or an agency with experience in the field.  

How To Find An Amazon Accountant

There are many varieties of accountants. Let’s go over some things to consider when choosing an accountant for your Amazon FBA store!

A phone with the calculator app open on top of tax documents. A sticky note is on top of the documents as well, reading "Need help?"

  • Always Find a CPA. All CPAs are accountants, but not all accountants are CPAs. you want to find someone who is certified, which is what the label of a CPA communicates. If you’re working with a firm or an agency, make sure that a CPA will be directly managing your books. Frequently these firms will have accountants in training working there, so be sure to ask if a CPA will have eyes on everything. CPAs are more experienced and can provide you with the best assistance. 
  • Specialist vs. Generalist. There are many kinds of accountants, but we’ll boil them down to two categories for now. Specialists, and generalists. Generalists are accountants who serve a wide variety of clients - while specialists focus on one type of client. You’ll want to find a specialist who has experience dealing with e-commerce businesses. Find an accountant who deals with Amazon in particular. E-commerce is unique and requires special considerations in terms of bookkeeping and accounting, so look for someone who has expertise in this field.
  • Bookkeeper vs. Accountant. Although the terms are frequently used interchangeably, there is a difference between a bookkeeper and an accountant. A bookkeeper is more involved in the day-to-day operations of the business. These individuals reconcile your accounts and keep your routine finances well organized. Accountants, on the other hand, are looking more at the big picture. As you’re first getting started, you can usually get by with a few bookkeeping sessions (if your budget is low) or regular bookkeeping assistance. Eventually, however, you will need an accountant.
  • Your Business Size. Your accounting needs will not remain constant throughout the lifespan of your business. One of the factors that come into play here is the size of your business. Small business owners in their early stages should be concerned with setting up well-organized systems and getting themselves situated for long-term success. Cash flow is much easier to monitor in this stage, and your budget is also smaller. You can likely manage to get by with the DIY strategy or occasional consultations at this stage. As you begin to generate more profit monthly, it’s time to consider other options. Medium to large businesses will start dealing with loans, larger profits, and more tax burden. Get an accountant on board immediately once you start raking in more than $20,000/month, and you may want to add an agency to that as well once you surpass $50,000 monthly. As you grow, be sure to find an agency or individual who can support you on more than one platform!
A man preparing financial documents with a computer, calculator, and pen and paper.

Conclusion

Amazon seller bookkeeping is vital to success as a seller online. Make sure that you are compliant and thriving as a business with accurate, professional, and experienced CPAs who understand the unique struggles of Amazon sellers. EcomHub can help you with this, as we are now providing Amazon accounting services for sellers just like you. Ready to offload the headache that is financial reporting? We’re here for you!

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A Guide to Amazon Seller Bookkeeping

Julia Grant

Julia Grant is a copywriter specializing in e-commerce and small business, helping businesses expand their reach with copy that clearly communicates their message and converts. She is a certified translator and interpreter and prides herself on providing culturally relevant content in both English and Spanish.

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