top of page

The Importance of Bookkeeping for Amazon Sellers

With the rise of e-commerce, Amazon has become the world's largest online marketplace. A large number of sellers are using Amazon as their primary platform to sell their products. However, running a business on Amazon requires a lot of effort, including keeping track of sales, expenses, and profits. In this article, we will discuss five essential things that Amazon sellers need to know about bookkeeping.


Bookkeeping Basics


Bookkeeping is the process of keeping financial records of a business. It involves recording all financial transactions, including sales, expenses, and payments. Keeping accurate records is essential for any business, including Amazon sellers. The bookkeeping process includes maintaining a chart of accounts, recording transactions, reconciling bank statements, and generating financial statements. Amazon sellers need to understand the basics of bookkeeping to keep track of their finances.


Separate Business and Personal Finances


As an Amazon seller, it is crucial to separate your personal and business finances. By opening a separate bank account and credit card for your business transactions, you can keep an accurate record of all business expenses and income. This not only makes tax returns and financial statements easier to prepare, but it also helps you to stay organised and manage your finances more effectively. Refrain from mixing personal and business finances - take the necessary steps to separate them and ensure your bookkeeping is accurate and up-to-date.


Track All Sales and Expenses


Amazon sellers need to track all their sales and expenses to keep accurate records of their business transactions. They should keep a record of all sales made on Amazon, including the date of sale, product description, and sale price. They should also keep track of all the expenses related to their Amazon business, including product costs, shipping fees, advertising, and other expenses. Keeping track of all sales and expenses will help Amazon sellers to calculate their profits accurately.


Use Accounting Software


Amazon sellers can use accounting software to make bookkeeping easier. Accounting software like QuickBooks and Xero can help Amazon sellers to keep track of their sales and expenses automatically. These software programs can also generate financial statements and reports, making it easier for Amazon sellers to monitor their business's financial performance. Using accounting software can save time and reduce the chances of errors in bookkeeping.


Hire a Professional


Finally, Amazon sellers can hire a bookkeeper or an accountant to handle their bookkeeping. While it may be tempting to do bookkeeping yourself, hiring a professional can save time and ensure that the bookkeeping is accurate. A professional bookkeeper or accountant can also provide advice on tax planning and help with preparing tax returns. Hiring a professional can be especially useful for Amazon sellers who need to become more familiar with bookkeeping or accounting.


Conclusion


In conclusion, bookkeeping is essential for Amazon sellers to keep track of their business finances. Amazon sellers need to understand the basics of bookkeeping, separate their business and personal finances, track all sales and expenses, use accounting software, and hire a professional if necessary. By following these tips, Amazon sellers can ensure that their bookkeeping is accurate and up-to-date, allowing them to focus on growing their business on Amazon.


Looking for a reliable and experienced bookkeeper for your Amazon business? Look no further than The ECommerce Accountant. Our team of expert bookkeepers specialises in helping Amazon sellers keep track of their finances, so you can focus on growing your business. Contact us today to learn more about our bookkeeping services.

6 views0 comments

Comments


bottom of page