Amazon Bookkeeping Essentials for E-commerce in 2024

If you’re an Amazon seller, keeping track of your finances is a big part of running a successful business. Good bookkeeping helps you stay organized, make smart decisions, and file taxes accurately. In this guide, we’ll break down the essentials of Amazon bookkeeping and share easy-to-follow tips to help you keep your finances in order.

Why is Amazon bookkeeping important?

Bookkeeping might seem boring, but it’s very important. Here’s why:

1. Tax Compliance: When you track your income and expenses correctly, it makes tax filing easier and helps avoid penalties from the IRS.
2. Financial Health: Tracking your profits and expenses helps you understand how well your business is doing and what areas might need improvement.
3. Better Decisions: When you have clear financial information, you can make smarter choices about inventory, pricing, and advertising.
4. Attracting Investors: If you want investors or plan to borrow money, good bookkeeping shows you’re trustworthy and organized.

Key Parts of Amazon Bookkeeping

Let’s look at some of the main things you need to track in Amazon bookkeeping:

Income Tracking

1. Sales Revenue: This is the total amount you earn from selling on Amazon, including product sales, any refunds, and fees.
2. Promotional Discounts: If you offer discounts or promotions, make sure to record those too, as they affect your revenue.
3. Amazon Fees: Amazon charges fees for using their platform, like referral fees, FBA (Fulfillment by Amazon) fees, and storage fees. Keep track of these costs so you know exactly what you’re paying.

Also check out our new blog — Does QuickBooks Connect with Amazon?

Expense Tracking

1. Cost of Goods Sold (COGS): COGS includes all the costs to produce or purchase the products you sell, like buying the products, shipping, and any import taxes.
2. Operating Expenses: These are other costs of running your business, like rent, utilities, employee pay, marketing costs, and software.
3. Professional Fees: If you pay for an accountant, lawyer, or any other professional help, include those costs as well.

Inventory Management

1. Inventory Valuation: This means putting a dollar value on your inventory, which you can do by using methods like FIFO (First-In, First-Out) or LIFO (Last-In, First-Out).
2. Inventory Adjustments: Sometimes, items get lost or damaged. Be sure to account for these so your inventory records stay accurate.

Tax Considerations

1. Sales Tax: Collect and pay sales tax in states where you’re required to. Amazon can help with this, but you still need to make sure it’s correct.
2. Income Tax: This is the tax on your business’s profits. You may need to make quarterly estimated tax payments throughout the year.
3. International Taxes: If you sell in other countries, learn about their tax rules to stay compliant.

Conclusion

Managing your Amazon business’s finances can be challenging, but staying organized with proper bookkeeping makes a huge difference. By tracking your income, expenses, inventory, and taxes, you can make smarter decisions, stay compliant, and keep your business on the path to growth. If you feel like you could use expert help, BookkeeperLive specializes in Amazon accounting and bookkeeping. Our team can handle the complex financial details for you, so you can focus on scaling your business with confidence. Reach out to BookkeeperLive for reliable support in keeping your Amazon business’s finances in perfect order!