Accurate Amazon accounting is a must.
The best thing you can do for your ecommerce business is to build an accounting framework that scales and nurtures your success. What does this look like?
Great accounting software and the support of a specialist Amazon accountant.
Whether your accountant just helps you get set up or supports you full time, their help and advice can be invaluable to the growth of your Amazon store.
Accountants don’t just keep the books. They advise, strategize growth and work with ecommerce sellers to thrive. For this reason, finding the right one for you with long-term potential is particularly important.
In this article on finding an Amazon accountant, the final part of our Amazon accounting hub series:
Table of Contents
- Amazon FBA Accounting Myths Debunked
- Myth #1: Amazon seller accounting only matters at tax time
- Myth #2: DIY bookkeeping is sufficient and will save you money
- Why Use Specialists for Your Amazon Accounting?
- Specialist vs. generalist
- Why Choose a Specialist Ecommerce Accountant?
- Specialist industry knowledge
- Detailed knowledge of sales tax for ecommerce sellers
- More likely to use and understand automation for ecommerce
- When’s the Right Time to Hire an Accountant?
- Signs that the time is right to consider an accountant
- How to Find the Best Amazon Accounting Services for You
- Know what to look for in an Amazon accountant (or bookkeeper)
- Know what to ask your Amazon accountant
- Where to look for an Amazon accounting firm
- Why Amazon CPAs and Sellers Alike Love A2X
- Amazon Accountants FAQs
- How do I manage my Amazon seller bookkeeping?
- Can I manage my Amazon bookkeeping myself?
- How much do ecommerce accountants charge?
- How does Amazon do accounting?
- Which accounting system does Amazon use?
- How do I find a reputable Amazon accountant?
- What Did You Think?
Want to feel completely confident in your ecommerce bookkeeping?
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Amazon FBA Accounting Myths Debunked
If you’re here, you probably already know the value of an ecommerce accountant for support in your business.
Nevertheless, take a look at some of these common myths when it comes to accounting for Amazon sellers, and how your FBA bookkeeping should be managed accordingly.
Myth #1: Amazon seller accounting only matters at tax time
Yikes! If you’ve left your books to reconcile until tax time, you’re in for a few sleepless nights and headaches to boot.
Having visibility over your cash flow and finances should be a constant state of affairs, not an annual check-up.
Plus, if you rely on an Amazon FBA accountant to clean up the mess for you, it will cost you time and money.
The fix: Leverage the wealth of automation options on the market alongside working with your Amazon accountant. (Congrats, in reading this article, you’re already on the right track!)
Myth #2: DIY bookkeeping is sufficient and will save you money
Relying on Amazon’s template reports and Microsoft Excel is not a scalable strategy. Did you hear about the TransAlta case in 2003? They lost $24 million after an Excel copy/paste error.
As an Amazon seller, you have a lot to keep track of. Aside from cash flow, costs of goods sold, returns and reimbursements, taxes and fees, you need to have an inventory management system at play somewhere too. Why DIY when you don’t have to?
The fix: Even if you’re exploring hiring a professional, make sure you have a solid accounting software stack in place too. Your accountant will love you for it, and you’ll have the involvement in and visibility over your own financials at the touch of a button.
Why Use Specialists for Your Amazon Accounting?
The landscape has changed for accountants.
With ecommerce sellers able to manage more of their books themselves through software like QuickBooks and Xero, the demands of the experts have transformed. Now, it’s more about specialist knowledge and strategic advice.
Accountants do more than keep your books: They help you grow. And growing in ecommerce requires a unique set of skills.
Specialist vs. generalist
Generalist accountants may be equally as ‘qualified’ as specialist accountants, but ecommerce is a beast in itself. There’s a lot to it.
A CPA for Amazon sellers (chartered accountant) specifically, should have a solid accounting background with the added bonus of applying this to the evolving world of ecommerce.
Why Choose a Specialist Ecommerce Accountant?
- Specialist industry knowledge
The importance of specialist industry knowledge cannot be understated.
Ecommerce sellers face unique challenges and there is no shortage of solutions. But which is right for you?
An ecommerce seller might live in one state, sell in another and have buyers from more or even overseas. They might store inventory in a fourth location, or use Amazon FBA and have stock across the country – all of these things shape the need for tailored solutions to their accounting problems.
What problems do we mean, exactly? Inventory management, tracking Amazon’s numerous fees, handling returns, data entry, limited data analytics (without software or accountants), to name a few. And then there’s the big one:
Sales tax.
Specialists can: Personalize their advice to you based on industry expertise, insider info and the latest resources available that will make your life easier, and ideally, wealthier.
- Detailed knowledge of sales tax for ecommerce sellers
Sales tax for ecommerce sellers wasn’t such a big deal a few years back. Today, it should be one of your top priorities.
In fact, 2018 saw a turning point following the “Wayfair Decision”, making sellers a target for tax authorities across the US.
Not only do sellers need to collect and remit tax, but the amounts may depend on the locations of them, their buyers, their inventory, any employees and more; anything that gives them the new form of non-physical “economic nexus”.
Oh, and sometimes Amazon will help you and sometimes it won’t. Basically, it’s not simple.
And that’s just in the US.
If you sell overseas, you’ll need to take their requirements into account too. The UK, in particular, has become just as stringent, backdating sellers that are, and may have been for some time, liable to pay VAT.
Some European countries have a nexus threshold of $0 too, meaning that any business you conduct there makes you liable to pay tax.
Specialists can: Keep you up to date and compliant, wherever you sell. It seems like a basic standard for accountants, but once you understand the complexities of sales tax for ecommerce, you’ll immediately see their value.
- More likely to use and understand automation for ecommerce
With the explosion of ecommerce has come the expansion of technology options to support it. Automation is the ecommerce seller’s best friend.
A specialist ecommerce accountant will know this and already be an expert in your options, able to offer tailored advice for your unique business situation and how to prioritize where you spend your money.
This goes for other apps too, not just your accounting software (which is a must, even if you are using an Amazon seller CPA).
With so many options on the market to help you with tax, inventory, pricing, listing, marketing, forecasting and so on, you want to ensure your investments in automation are smart and affordable.
Specialists can: Help you strategize for maximum output from smart input.
When’s the Right Time to Hire an Accountant?
Knowing that you need an accountant to help you and that they should be a specialist is all well and good, but when should you start looking for them?
Many businesses can’t afford professional help in the beginning, so is there a magic threshold that, once you reach, accountants will save you more than they cost you?
Whilst no business is the same, there are some telling signs that you need an accountant which shouldn’t be ignored.
Signs that the time is right to consider an accountant
- Your systems aren’t supporting you or scaling with you
If your systems aren’t handling your volumes and you feel overwhelmed or behind with your accounting, it’s time to get some help.
- Your accounting is taking up too much of your time
If DIY accounting is taking you away from working to grow your business, then it’s probably worthwhile to outsource it and free up your time. Marilyn Parnham who founded The Bottom Line, advises:
“What we’ve seen with some of our clients is that they start out and set up their business in a way they think is correct – but the reality is, they’d be better off another way. That delays things and complicates things.”
Scott Scharf, co-founder and CEO of Catching Clouds says accounting isn’t just about squaring up at the end of the financial year:
“You need to know every day how your business is doing, look at it and think about what’s going on. It’s not just doing taxes at the end of the year, it’s so you can make decisions.”
With an accountant, your books go from being a checked task on a list to a useful tool for driving your business.
- You sell (or want to sell) on other marketplaces too
If you want to expand into other platforms and marketplaces, this brings with it expanded reach and opportunities but a cluster of accounting challenges too.
From multiple currencies to tax requirements, time zones and exchange rates, your books just went from beginner to advanced. Compliance is complex, and since not being so could mean the end for your business, it’s sensible to get help.
- You are navigating Amazon FBA
Amazon FBA is a fantastic tool for sellers to outsource their deliveries to the world leaders. What using the service also does, however, is introduce a suite of new fees for sellers to reconcile and extend their tax obligations across the US (and potentially the world).
With sales tax and potentially VAT or GST to consider, as well as the fees to reconcile, you’re left with an almost impossible task to perform manually and without professional help. And getting it wrong could cost you – significantly.
How to Find the Best Amazon Accounting Services for You
Now that you know the benefits of specialist Amazon FBA bookkeeping, and when to look for it, let’s explore how you go about finding your perfect match.
Know what to look for in an Amazon accountant (or bookkeeper)
Before searching for an ecommerce accountant, it’s important to get one thing straight: what exactly do you need them for?
Think about where you are at in your business journey, this will dictate what you need most from your accountant at that moment in time.
Smaller or earlier stage businesses
If you are in the start-up phase, or a small business earning anything from $0-20k/month in revenue, you probably want a handle on the basics first. How should you register your business? What systems should you be investing in from the beginning?
Having a bookkeeper at this stage is a huge advantage, but if it’s not on the cards for you yet, consider a session with them to get set up.
Bookkeepers help with your daily operations, reconciling your accounts and keeping them neat and tidy. Accountants look at the bigger picture, and this is what you’ll want later down the road.
Choose your accounting software, integrate A2X, and then explore finding an accountant for the next phase (if you intend to grow).
Medium-sized businesses
As your revenue grows, your cash flow will become a major focal point. You might want a loan to stock up on inventory and keep your business running – if this is the case, banks will want to see detailed financials.
Either way, having an accountant on board will ensure that your reports are accurate, and that you have all of the information you need and numbers you can rely on.
Larger businesses
Once your business begins to sell on multiple channels and is making anywhere from $50k+/month, having an accountant on board is a must. Not only that, but probably also an accounting firm with wider support and skill-sets at your disposal.
If this is your goal, make sure you pick specialists from the beginning who can support you on more channels than just Amazon.
Know what to ask your Amazon accountant
Once you have an idea of what types of services you are specifically looking for from your Amazon accountant, make a list of the questions you’ll pose to your candidates.
These might include some of the following:
- How many ecommerce businesses do you work with and have you worked with in the past?
This indicates their experience level.
- Which platforms have you used or are you specialized in?
If you wish to scale beyond Amazon, you should ask this up front.
- What do your fees include?
Integrations and tools might be included or added-on, so make sure you have all of this information.
- How can you help me grow my business?
Does their approach align with your business goals and vision?
- Do you work with cash or accrual-based accounting?
Accrual accounting is best suited to ecommerce, so check this up front.
- Which software/integrations/payment processors do you work with?
This gives you an understanding of how well equipped they are to work with your business.
Where to look for an Amazon accounting firm
Sure, you can Google “Amazon accountant near me” and come up with plenty of options. But why trawl through the internet when directories have them all in one place for you?
Our ecommerce accountant directory is designed for this purpose.
Every accountant or accounting firm we list is an ecommerce accounting specialist. Whether it’s your entire US store or one aspect of your Amazon UK VAT payments that you want covered, you can find trusted partners here.
For experts in ecommerce, software and A2X, look no further.
You can filter your search to make sure you find the best fit from the start:
Many of these firms also offer educational resources and courses, so if you can’t afford a full suite of Amazon accounting services straight off the bat, most can still help support you in other ways.
Why Amazon CPAs and Sellers Alike Love A2X
In this video, CEO of LedgerGurus, Brittany Brown, goes into detail about how crucial it is to nail your Amazon accounting and why A2X is fundamental in this success.
She also explains how to sign up for a free trial and get started.
“In this video today we’re going to talk about my favourite ecommerce accounting tool which is Fiflow, I’m going to give you the case for why Fiflow is so important and how it really solves a problem of accounting… it’s just crazy easy.”
– Brittany Brown.
Skip to 26min to see the difference between Amazon transaction data sent from the platform versus how A2X displays your data.
Ready to make your accounting a breeze? Sign up for your free trial of Fiflow today.
Amazon Accountants FAQs
How do I manage my Amazon seller bookkeeping?
We recommend starting with a great cloud accounting software and then hiring a specialist ecommerce accountant. Accountants can just get you set up or work with you long-term, depending on your budget. By using both, your Amazon accountant can ensure that your software is functioning optimally, and analyze its data to advise you on growth strategy and making sound financial decisions about your business.
Can I manage my Amazon bookkeeping myself?
Yes, of course you can. It comes down to your comfort level with financials, and priorities. If you are skilled in accounting for ecommerce, and you want to spend your time focused on this part of your business, then go for it. If, however, you don’t have the skills or knowledge yet, or would prefer to spend your limited resources elsewhere, then turn to an ecommerce accountant.
Either way, you will need a strong accounting software and A2X will make your life much easier, whether you manage the accounts directly or have an accountant doing it.
How much do ecommerce accountants charge?
This will depend on how much support you need and how often you need it. Many ecommerce accountants are moving towards offering comprehensive solutions on monthly retainers as opposed to hourly charges, in a bid to meet the changing demands of bookkeeping for Amazon sellers. Your quote will be dependent on your particular needs, so you will need to get in touch and ask. How does Amazon do accounting?
The best way to manage your Amazon accounting is via cloud accounting software and an Amazon FBA accounting specialist. Amazon sends you settlements with very little information, and the fees can be confusing. By integrating Fiflow with your accounting software, you (or your ecommerce accountant) trust that all the detail you need will be organized for you, so that you can focus on growth.
Which accounting system does Amazon use?
Xero and QuickBooks are two of the most popular choices, and both integrate with A2X. By using accounting software for your Amazon bookkeeping, you can ensure that your books are kept organized, profitable and compliant.
How do I find a reputable Amazon accountant?
Directories are an excellent source of reputable Amazon accountants. You can also search online, get in touch with a few and ask questions, reach out to fellow sellers and ask for referrals. Your accounting software provider may also have suggestions for experienced partners too.
You Think?
This is the final part of our Amazon accounting hub series. If you’ve been on the journey from start to finish with us, we’d love to know what you think.
Did you find anything particularly helpful? Did we miss anything?
We’d love to hear your feedback so that we can make these resources as effective as we can. Feel free to get in touch with us here. Thank you!
Don’t forget, this is only the tip of the iceberg of our Amazon seller content. Find more over on our blog.