Have you ever wondered why Amazon is the largest eCommerce platform in the world? While there are a range of factors influencing their success, one of the key things they do is make it easy for third party sellers to do business on their platform.
In fact, it’s never been easier to open an account and begin selling products via Amazon FBA - you don’t even need to handle the logistics yourself. This allows almost anyone to compete on the platform, giving both established businesses and new players the opportunity to enter the game.
When does bookkeeping become a priority?
At the beginning of your business, keeping a tidy set of accounts might not seem like the most important thing on your to-do list. However, as you grow, you’ll need to begin taking your financials more seriously.
After all, how can you actually know if you’re succeeding and how much money is available for growth without an accurate understanding of your numbers?
We highly recommend doing your bookkeeping right from day one. Whether that means working with a bookkeeper from the outset or managing the records yourself to begin with is up to you, but don’t forget to keep information about every transaction on hand (otherwise you’ll run into issues down the line).
Why should I hire a bookkeeper?
There are a wide range of reasons why business owners work with bookkeepers and accountants, but here are a few of the top ones:
- Reduces the likelihood of mistakes in your financials.
- Saves time - bookkeepers do this work every day, so they tend to be much faster at crunching the numbers.
- Frees you up to look after more entertaining and higher value work.
- A good accountant will help you to pay less tax.
eCommerce accountants vs. traditional bookkeepers
Bookkeeping has been around ever since the double entry accounting system was invented in 1494, but as you can probably imagine, lots of things have changed since then.
Fast forward to today, and we are now experiencing another major transformation in the world of accounting - the shift to online cloud based systems that are integrated with the rest of our business.
While some accountants have taken the time to learn what is needed for Amazon sellers and eCommerce businesses, others have not adapted to keep up with the times.
As an Amazon seller, here are a few things that you should keep in mind when looking for a bookkeeper:
- There’s always a more efficient way of doing things, and manual data entry should be avoided at all costs (especially if you’re paying the bookkeeper an hourly rate).
- eCommerce accountants tend to focus on finding the right apps and automations so that your business requires less work to keep an accurate set of accounts as you grow - rather than just doing whatever is easiest at the time.
- If you’re selling via Amazon FBA, you need to be aware of your exposure to sales tax liability in each state where you send products. A good bookkeeper will use an app like TaxJar to automate this process.
- Accountants are moving away from charging by the hour and towards a subscription service that is paid monthly. This shifts the relationship away from one where you only speak with your bookkeeper at tax time to a relationship that emphasizes ongoing service whenever you need it.
Automate your Amazon accounting with A2X
A2X is an app that connects your Amazon seller central account with your cloud based accounting software. A2X automates the process of entering sales and transaction information into your accounting system.
Here's how it works:
- You sell products on Amazon, and the customer pays for their orders within the platform.
- Every two weeks, Amazon deposits a ‘settlement’ payment into your bank account. This payment includes the revenue from all of your sales, minus any transaction fees, returns or other deductions.
- A2X pulls the correct information about your transactions from Amazon and sorts it into tidy groups that perfectly align with each settlement payout.
- A2X then posts this information as an invoice or journal into your cloud accounting system.
- From here, you (or your bookkeeper) can reconcile the payments received with transactions made with ease.
While A2X does save you plenty of time and resources, it also grows with you. It takes roughly the same amount of time to crunch 100 transactions as it does to look after 10,000.
By working with a bookkeeper that uses A2X to manage your finances, you can know that your accounts are perfectly reconciled, error free, and your time is available to look after other areas of your business.
Are you ready to supercharge your growth?
No matter who you are, we all have the same 24 hours in each day. If you’re ready to grow faster, you’ll need to free up your time to focus on higher value work.
We are here to look after your bookkeeping, payroll & HR, taxes, and we can even be your personal CFO advisor. This all comes at a simple monthly price so that you know what it’s going to cost ahead of time.
To find out more, book a call to chat with us.