There are many benefits to selling your goods on Amazon, but there is a downside. Using Amazon as a sales channel can quickly become an accounting nightmare, with subscription fees, referral fees, returns, stock management fees, tax and VAT, shipping fees, and reimbursements - especially if you sell to multiple countries.
Thankfully, there are Amazon accounting software tools that can help you make sense of it all. In this article, we'll show you which ones are best for managing your Amazon sales and keeping an eye on your cash flow.
Let's start with the option that most small business owners use to track expenses and inventory: spreadsheets. Open up the likes of Excel or Google Sheets and you have a free tool you can use right away for the likes of inventory management, reimbursements, additional fees and taxes, provided you have all the data you need… and some time on your hands… and you’re quite well versed as handling formulas. You'll need to track:
The benefit of this approach? It's completely free.
The disadvantage? It's time-consuming, complex and all it takes is a typo to completely throw off your accuracy. Spreadsheets work well if you're a small business with a few simple products and a limited audience. However, as you start to scale your Amazon store, different fees and additional costs start to creep in, making it harder to manage. It's even harder when you become VAT registered. That's when it's time to consider using a dedicated accounting software solution.
Accounting software can save ecommerce businesses and Amazon sellers hours through automation. When you use a comprehensive solution that automatically syncs your Amazon seller account with your books and provides financial information at a glance, you gain more control and greater accuracy over your accounts.
Some of the benefits include:
Greater accuracy
Quality accounting software will not only help you manage your core accounting functions but reduce the likelihood of human error creeping in. You can easily gain a bird's eye view of your sales, adjust your price points and ensure that your bank account looks healthy with the right tools.
Tax preparation and payment
Managing VAT becomes extremely easy when you use an accounting software solution, as it will calculate the amount of tax you need to pay. It's a lifesaver when you are dealing with multiple jurisdictions and customers.
Saves time and stress
Why spend hours sifting through your Amazon statements, sales and invoices when it can be done for you on autopilot?
Now that we’ve covered the basics of using spreadsheets and what you should look for in an alternative, we can start digging into a few of the top accounting solutions for e-commerce sellers.
At Link My Books, we’ve worked with e-commerce sellers using a variety of platforms. In our opinion, these are the ones that you should consider right off the bat:
Xero is a good tool for reconciling your accounts and managing projects. You can send invoices, track bank deposits, manage your balance sheets, and even keep track of purchase orders. It was designed with small businesses in mind, so Amazon sellers that don't have an accounting background will find it easy to use. Xero is cloud-based, with useful app integrations (including Amazon integration using Link My Books) available in the Xero app store, several support options and a handy free trial period.
Recommended For:
Xero is best suited to small businesses and new sellers that need a simple, affordable solution to track their burgeoning Amazon store. Xero reviews are generally positive, and it's suitable for most users.
Xero Pricing
There are three pricing tiers:
QuickBooks Online is a simple cloud-based accounting software and bookkeeping tool that’s pretty good for Amazon sellers. Amazon sellers can use QuickBooks to generate and track invoices, manage your payroll admin, and keep your cash flow and expenses in check. You can even automatically generate sales tax returns and connect all of your bank accounts. The downside of QuickBooks is that most businesses with smaller stores tend to sell on both Amazon and eBay, which isn’t ideal. (Don’t worry - Link my Books can help with this issue!)
If you are a sole trader or a small business without a dedicated accountant, this is a good way to manage your books without extra hands on deck. Fees are low as well, although there are occasional reports of technical glitches.
Recommended For:
QuickBooks is best for small businesses, freelancers and sole traders that need a comprehensive but easy-to-use accounting tool.
QuickBooks Pricing:
QuickBooks has four pricing tiers:
These prices are halved for the first three months of use, which makes it easy to trial.
Link My Books was designed to meet the unique needs of ecommerce companies and accountants in the field by linking your Amazon seller central account (and other ecommerce channels) to Xero or QuickBooks. If you are filled with dread every quarter when filing your VAT return, Link My Books will be a particularly good solution for you to use because it provides default account and VAT rate selections.
The tool will break down the sales and fees according to the appropriate tax jurisdiction, so you'll never overpay on VAT. Invoices are generated automatically for each payout, making this the best accounting software for Amazon Sellers with a busy storefront. Setup is quick and easy, so investing just a few minutes of your time today will save hours tomorrow.
Recommended for:
Link My Books is used by sole traders and enterprises, leading accountants and beginners without accounting knowledge that need to manage their Amazon Business. Link My Books is a great option if you need a time saver to help you navigate the complex world of ecommerce bookkeeping.
Link My Books Pricing:
Pricing scales with the number of orders you receive per month and the number of sales channels you want to connect, here are four examples:
Larger packages are also available for enterprise customers and Amazon sellers that are also selling across multiple sales channels.
Whichever solution you choose, make sure that it saves time, money and effort so that you can focus on what matters the most: growing your business. Link My Books can combine your e-commerce sales channels directly with intuitive accounting solutions, so you have complete control over your finances, without taking time away from your sales. Isn’t that the best of both worlds?
*All prices are correct at the time of writing. For the most accurate pricing, get in touch with the supplier directly.
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