Amazon is booming right now. More people are shopping online than ever before. While an Amazon business can be a lucrative venture, the various fees involved can make it confusing when it comes to keeping your accounts. Consider the subscription fees, referral fees, fulfilment fees, and storage fees. Add your sales tax and VAT on top and things can get complicated quickly.
Accounting software for Amazon sellers makes it simpler to remain organised. Rather than trying to tackle it all yourself, or forking out for an expensive accountant, accounting software gives small businesses the tools to keep accurate records of their Amazon transactions.
Key Takeaways from this Post
What are the Benefits of Accounting Automation Tools?
Amazon accounting automation tools automatically record and manage financial transactions in your Amazon Seller account. They essentially automate tasks such as calculating tax, generating invoices, and tracking inventory. Without automation software, these tasks would take time and an awful lot of effort. In 2023, there is no reason why any Amazon sellers should need to subject themselves to this.
When your accounts are automated, it becomes considerably easier to generate reports and sales forecasts. Analytics can provide unique insights into your Amazon account business that you may have otherwise missed. Furthermore, automated accounting software allows for accurate inventory management and rapid data retrieval.
Now we've covered what accounting automation tools are and why you need them, it's time to get to the point. We're going to go through two of the best accounting software for Amazon sellers, and also take a look at some pros and cons of opting for a free software.
Best Accounting Software for Amazon Sellers
QuickBooks Online for Amazon Sellers
We can't have an Amazon accounting software article without including QuickBooks Online. QuickBooks Online is used by 5.9 million businesses around the globe. The software gives sales updates in real time, as well as status alerts.
eCommerce businesses can benefit from the cloud-based bookkeeping software. Unlike its desktop counterpart, where you have to download and install the software onto your device, QuickBooks Online operates entirely in the cloud. This means you can access your data from anywhere and from any device.
QuickBooks Online is suitable for accountants, sole traders, and limited companies. One of its key features is it simplifies the tiresome process of preparing your self-assessment. It is HMRC compliant and even has a handy VAT error checker. This means that, as an Amazon seller, you can be confident your VAT returns are accurate.
With QuickBooks, you gain access to a range of top accounting features including monitoring your cash flow and generating invoices. You can also receive sales forecasting reports and track mileage.
The software's inventory management tool is another notable feature. It auto-updates your stock levels as they change. Furthermore, QuickBooks reports on the value of your current stock and alerts you when stock levels are low.
Ease-of-Use and Customer Support
QuickBooks is aimed at people with some basic accounting knowledge. This means it comes with a bit of a learning curve. However, there are a lot of educational resources on its website to guide you through the various features and processes.
There is phone and chat support, depending on your chosen plan. Beyond that, there is a QuickBooks community that you can ask for guidance. The QuickBooks blog covers a wide range of topics too and they publish new content regularly. Read up on everything from inventory management to sales tax summaries.
Although you can integrate your Amazon Seller account with the software, it is not specifically designed for eCommerce bookkeeping. The process can therefore be a little complicated. Some accounting knowledge is needed to configure everything correctly.
QuickBooks is very generous with its offers. Currently, new users can pay just 10% of the original plan price for a full six months. This means that the Essentials plan which normally costs £24/month, costs just £2.40/month plus VAT at the time of writing. You will also be treated to a £50 Amazon voucher.
The Essentials plan is ideal for small businesses. With this plan, you can:
- Manage your income and expenses
- Send invoices
- Track employee time
- Manage your bills
- Get phone and chat support
- Access the VAT error checker
This plan allows up to 3 users. And, you can get a one-month free trial before you commit.
Xero for Amazon Sellers
Our second recommendation for the best Amazon accounting software is Xero for Amazon sellers. It connects with your Amazon seller central account for seamless bookkeeping and management. Not only that, but there are 1000 app integrations available for Xero too including PayPal, Shopify, and Link My Books.
With Xero for Amazon seller, users can reconcile their Amazon transactions with their bank accounts daily. These statements are automated.
Xero has plenty of core accounting functions for Amazon sellers and eCommerce sellers to take advantage of. Users can monitor and manage all of their online business activity from their dashboard. The interface is solid and easy to understand and navigate.
Xero is suitable for small businesses and large businesses alike. You can pay bills, create and send invoices, and get a snapshot of short-term cash flow. Like QuickBooks, Xero's software is compatible with HMRC. This means you can manage and submit your VAT returns straight from the platform.
Xero's Amazon integration makes it easy to manage your Amazon seller central inventory. Receive timely reports on your business's financial health. And, make smart business decisions based on sales projection reports.
Ease-of-Use and Customer Support
Xero has a lot of features for an online business to use. At first, it might seem a little overwhelming. However, once you've explored everything and familiarised yourself with it, its Amazon accounting software tools are relatively simple to use. Thanks to its straightforward interface, many Amazon seller reports can be generated automatically and viewed with one click.
One of the things that stands out about Xero is its educational resources. There are currently 95 courses, videos, and webinars available to work through. Pick a topic, for example "Add bank accounts and transactions", and simply click through to the material (after you've signed up). You can even get certifications on setting up and using Xero, as well as accurately setting up payrolls. These courses are self-paced and great for small business owners looking to expand their accounting knowledge.
Once you're a Xero member, you can access round-the-clock online support. If you have questions before signing up though, you are instructed to click on "Contact support at the bottom of any article". Unfortunately, this takes you through to a login page.
Like QuickBooks, at the time of writing, Xero has a special offer running. You can receive 50% off your first 6 months. Its most popular plan is its Standard, which is suitable for growing businesses, including Amazon sellers. It currently costs £14/month but normally costs £28/month.
With this plan, you can:
- Send invoices
- Submit VAT returns directly to HMRC
- Reconcile your bank account
- Reconcile transactions in bulk
- Enter and manage your bills
While Xero undeniably has an impressively long list of features, many of them are optional add-ons. So, you need to pay more for the privilege of using them. Tracking projects, payroll software, and advanced analytics all come with an extra cost.
Zoho - Free Accounting Software for Amazon Sellers
You might be wondering if you could use free accounting software for Amazon sellers instead of the dreaded spreadsheets (more on those later!). If you're on a very tight budget and are not spreadsheet-confident, it's reasonable to assume that free accounting tools might be the next best thing.
Ultimately though, this depends on the size of your business. Zoho Books is one of the best free accounting software options. Free users can access features like automated payment reminders, mileage tracking, and recurring invoices.
However, with this plan, you can only have one user. Your invoices are capped at 1000 per month and it lacks many of the features that make Zoho Books a leading player in the accounting software game. For example, tax calculation and tracking, and different payment integrations.
Unfortunately, free accounting software commonly comes with major downsides. In essence, they do the basics and can often do them well. However, they are normally limited in their features.
Wave for Amazon Sellers
Number four on our list of best accounting software for Amazon sellers is Wave. Wave is another software with free plans available. Access invoicing and accounting features for free. With these plans, you can:
- Track income and expenses
- Craft customised invoices
- Send automated payment reminders
- Add partners and accountants to your account
Alternatively, you can opt for a pay-per-use plan or pay monthly plan to access more advanced features.
Although Wave is pretty comprehensive for a free accounting software option, as well as a paid option, you can’t sync it to your Amazon FBA account. This means that consolidating your data can be a fiddly process.
Sage for Amazon Sellers
Finally, we have Sage. Sage integrates with your eCommerce store through a third-party vendor. Ecommerce businesses that use Sage benefit from inventory tracking features such as inventory reports and low stock warnings. The software is recognised by HMRC and allows you to keep on top of your accounts with accurate and real-time data.
Sage costs from £14/month for the basic package. To access more comprehensive features like advanced reports, cash flow forecasts, and the ability to send quotes and estimates, you’ll need the middle-tier Standard plan for £28/month.
How to choose the best Amazon Accounting Software for you
When deciding which product is best for you and your situation, there are various criteria to look at.
Although cost isn't everything, as a small business, you need to factor in your budget when choosing which Amazon accounting software to use. As we discussed already, free software might be the way forward for you.
How intuitive is the user interface of your chosen accounting software? If you've never used one before, factor in the learning curve you might need to take to get to grips with it. While a feature-rich option might be within your budget, you might find that you don't actually need everything the software has to offer. In this case, a simple software might be better for your Amazon accounting.
This is arguably the most important thing for Amazon sellers to consider when choosing accounting software. Compile a list of features and sort them into 'essential', 'good to have', and 'not necessary'.
Features an Amazon business might consider are:
- Track inventory
- Amazon integration
- Compose cash flow reports
- Linking more than one bank account
- Bank account reconciliation
- Sales data charts and sales reports
- Sales tax or VAT calculation
- Sales forecasts
If you're just starting out on your Amazon FBA venture, you might not need all of these features. However, they are likely to come in handy as you scale your small business.
Whether you experience a technical issue or you are having trouble understanding how to use a particular feature, you want to be able to contact customer support for a quick and helpful response. Consider the channels of communication an accounting software provider uses. Additionally, take on board the amount of time they take to respond to queries.
Will you find live chat helpful or will email be sufficient? Perhaps you would prefer telephone availability to speak in depth about your online bookkeeping and small business needs.
Free trials are fantastic for ensuring accounting software has everything an Amazon seller needs before committing to a purchase. They are also useful for assessing the complexity of the software.
How do Our Recommended Software Compare?
Using Spreadsheets for Your Amazon Business
Spreadsheets are a common tool for keeping records. As long as you have a good understanding of how they work, you can keep track of your Amazon sales, income, sales tax, and pretty much everything associated with your Amazon business. There are various functions that make the process easier. And the advantage of this is that it is completely free.
But, that's really where the advantages end.
What Are the Disadvantages of Using Excel for Accounting?
Let's move on to the disadvantages of Amazon sellers using spreadsheets like Excel rather than accounting software:
Yes, you can probably imagine the time it takes to create spreadsheets for your Amazon business activities. You will need to update your spreadsheets regularly with all your transactions and cash flow changes.
This can be a tedious task. It can also quickly get overwhelming, particularly if you don't have an accounting background and you're new to Excel.
Vulnerable to Human Error
As great as it is to be able to do your Amazon accounting yourself, spreadsheets are vulnerable to human error. Even if you've got an accounting background, you are still susceptible to mistakes. These can be costly for your business operations and indeed the country.
Statista estimates small businesses caused a £13.4 billion tax gap in the fiscal year 2018/19. That's far more than the £4.5 billion that criminals were responsible for.
Accurate records of your business transactions are essential for calculating your sales tax and profit margins.
If there is more than one Amazon seller involved in your eCommerce business, collaboration is important. Spreadsheets are single-use only. This means that only one member of your team can work on your Amazon business accounts at a time.
Furthermore, if you want to share your spreadsheets with someone else, you will need to go through the trouble of emailing them. When different versions of a spreadsheet are shared back and forth, it becomes harder to keep track of the correct version.
Conversely, cloud-based accounting software for Amazon sellers makes collaboration easy. There can be multiple people looking at up-to-date data simultaneously.
What is 'Fulfilled by Amazon', and Why is it Important for my Accounting Needs?
Fulfilled by Amazon (or FBA) is a fulfilment service provided by Amazon. Instead of shipping the products that you sell on the platform yourself, you ship them to Amazon. The eCommerce giant stores your products for a fee. And, ships them out to your customers when they buy them.
Accounting software helps Amazon sellers manage their online bookkeeping, whether they use Amazon's FBA service or not. But, with FBA, there are more costs involved. You must also take extra care to track inventory as your stock is not physically with you.
The bottom line is that where there are more steps involved in the process, and more cash flow in and out of the business, you need more comprehensive ways of managing your accounts.
This is where accounting software comes into play.
While it may not be strictly necessary, it will make your life as an Amazon FBA business owner, or Amazon seller, considerably easier.
Bringing it Together With Link My Books for Amazon Sellers (Make Accounting Simple)
We may be a little biased here but, in our humble opinion, Link My Books is one of the best accounting tools for eCommerce businesses; including Amazon FBA. Suitable for both sellers and accountants, Link My Books saves you time and money on all your bookkeeping tasks.
Link My Books was specifically designed with eCommerce in mind. It was created to integrate with your accounting software to accommodate all the accounting needs that Amazon sellers may have.
At Link My Books, we discovered that 75% of our Amazon sellers found they were previously overpaying tax before signing up with us. Link My Books calculates the tax on every single sale you make and automatically adds it to your accounting software. Plus, it accurately breaks down your sales and fees in line with the appropriate jurisdiction. This means you never have to worry about overpaying VAT again.
Let's jump into it with Link My Books' top features.
Link My Books supports Amazon, Etsy, eBay, and Shopify. The automation processes for calculating tax, sales, VAT, and fees will save you around six hours per month. The software streamlines all of this information and provides accurate reports that are simple to understand and digest.
The accounting software supports all Amazon marketplaces. And, the Pro and Premium plans allow users to integrate up to 10 eCommerce sales channels. This is perfect for small businesses selling across multiple channels and marketplaces.
Link My Books has a strong focus on speed. Users can connect with their existing Xero or QuickBooks accounts in seconds. This enables real-time reporting on invoices made through the channels.
Our powerful accounting software is ultra-secure. Not only do we use Google Cloud and Cloudflare to maximise our security, but Amazon also performs regular audits on our software and company. They make sure we maintain our strict security procedures to meet their very high standards.
Ease of Use and Customer support
If you're new to the world of bookkeeping, fear not. Link My Books prides itself on its ease of use. It has a responsive UI, and generates crisp and clear reports. You can set up your account in just 15 minutes. The process is fast and efficient.
In case you get stuck along the way, or you have a question, our team is on hand to help. We have a dedicated team made up of successful former Amazon sellers and qualified accountants. So, they know the biz inside out.
We also have a team of experts to set up your account for you. They will do any channel linking and set up your automated reporting. To benefit from this, take us up on our free onboarding phone call. This comes with every plan.
Finally, we have a load of resources available online. These include blog posts, webinars, guides, and videos. We even have a list of tried and tested expert accounting firms for you to contact a specialist eCommerce accountant if you need to. And, you can send us a message through our live chat feature.
We've kept our pricing as straightforward as possible for Amazon sellers. There are three plans available; Lite, Pro, and Premium. There is a slider for you to manually adjust your number of sales per month. The price of your plan will change to reflect this.
Our Lite plans start from just £13/month or $17/month if you’re in the US, they include:
- Connect 1 sales channel
- 3 months of historical data
Our Pro plans start from just £23/month or $29/month if you’re in the US, they include:
- Connect up to 5 sales channels
- 12 months of historical data
Larger plans are available too with more orders and more channels.
All Link My Books yearly members can bag a free two months of our software. And, Amazon sellers can add as many users as they like to all plans.
Which Amazon Accounting Software Will You Choose?
Navigating the world of eCommerce bookkeeping can seem daunting. But, accounting software subscriptions can make the process easier. When it comes to tracking sales tax, inventory management, tax preparation, and sales forecasting, good quality accounting software will save you both time and money.
When deciding which is the best accounting software for their sales channels, Amazon sellers should consider how easy it is to integrate their Amazon account with the software. They should also think about the types of reports they need, as well as the customer support and ease of use.
Link My Books was created especially for Amazon sellers and eCommerce. It is also aimed at people with no prior accounting experience. That's why it is used by thousands of eCommerce experts. Link My Books conveniently breaks down all your sales, refunds, fees, and taxes, and automatically posts a summary straight into your accounting software.
You can get started with Link My Books' software for Amazon sellers for free today. Sign up and book an onboarding call to talk through your options.