Updated: Dec 12, 2019
Accounting is one of the most essential elements in any given business, including your e-commerce gig on Amazon. It matters more than you would think and is the key to successful Amazon sellers, especially when you consider how accurate financial data is crucial to decision-making. This includes having a clear overview of transactions as more than 50% of Amazon sales consist of third party customers, which may pose some risks and trading issues when it comes to tax preparations.
Many sellers who start on Amazon don’t consider the need for an accountant until the time comes to pay taxes. Of course, occasional sellers who want to sell their old phones or tablets won’t need an accountant to keep their cash flow in check. However, a growing business will soon need guidance from a professional as settling statements becomes harder to manage the more extensive your business grows.
What do Amazon Accountants Do?
An accountant or certified accountant (CPA) is responsible for looking after the financial health of a business, along with preparing for tax returns and ensuring your business complies with tax laws. This includes looking at trends, discrepancies, gathering end-of-year financial statements, as well as going over deductions and credits. To that end, here are some tell-tale signs that say you may need a specialist Amazon accounting support:
1. If Doing the Accounts for Yourself Overeat time
You know it’s time to get professional help when crunching numbers become too time-consuming as this is a clear sign that your sales are becoming too large to handle on your own. Spending hours or days on the books can be frustrating and may leave more room for inaccurate calculations, which can have detrimental effects on your business’ financial health.
On that note, an accountant has the training, skill, and experience necessary to maintain profitability, prepare taxes, and grow your inventory all in the nick of time. The best part? You get to focus on what you do best - your business!
2. If You Sell on Multiple Amazon Marketplaces
If your target market is focused within your region, then managing sales may be a more straightforward ordeal. However, expanding your reach and tapping into multiple accounts will quickly become too complicated as it involves handling currency exchanges, taxes, and fees. To that end, an accountant will know how to aptly keep track of all records and ensure everything is sorted out accordingly.
3. If You are Looking Into Fulfillment by Amazon (FBA)
FDA is a program that is highly beneficial for smaller businesses as it allows you to store your products in Amazon’s fulfillment centers prior to delivery. The tricky part about this, however, is that FBA requires you to register and submit tax returns on top of federal tax filings. This rule applies to any merchants selling with an FBA - including the U.S., Canada, Japan, and Europe, though the three following countries mentioned use value-added tax in its list of requirements. All these can be demanding and complicated for an average seller, which is why hiring an accountant is crucial in this case.
If you’re looking for an ecommerce accountant in Australia, get in touch with us today for a free consultation!