Many Amazon Sellers who are just starting out might be able to get by with Amazon’s built-in reports. While they are very limited, these reports can accommodate sellers who just make a handful of sales per month or use Amazon as a side hustle. But if you’re an Amazon Seller who makes dozens or even hundreds of sales per month and operate your Amazon store as a part or full-time business, you’ll definitely want to invest in accounting software. Not only can it help you better track your business finances, but it can also help you improve your business to maximize profits.
But if you’re just considering Amazon bookkeeping software for the first time, you’ve probably got a lot of questions. For example, what is the best way to manage Amazon FBA accounting? Which is the better option for you, QuickBooks or Xero? Finally, what integration tool for Amazon Sellers can provide even better insights for your online business?
In today’s guide, we will answer all of these questions and more, but first, let’s look at how accounting software for Amazon Sellers differs from other types of accounting software:
Accounting software for any online business, regardless of the selling channel, is a tool designed to help track financial transactions. For Amazon Sellers, accounting software must be able to do a lot of different things, including accurately keeping track of sales, calculating current profits, and projecting future profits — just to name a few. Perhaps most importantly, accounting software should be specifically designed to seamlessly work with Amazon Seller Central, pulling data directly from the platform and organizing it in a way that makes sense and provides you with a valuable overview of your business finances.
When shopping for the right bookkeeping and accounting software, you should specifically look for the following features:
● Sales Tracking - Above all else, you want to make sure that your sales data is accurate. This includes the products’ name, category (when applicable), quantity, and price. Sales tracking should also include all Amazon fees associated with each sale.
● Expense Tracking - The combination of sales and expense tracking ensures that you can have a more accurate picture of your cash flow. Tracking business expenses may include FBA shipping costs, Amazon seller fees, landed costs, as well as the total cost of goods sold (COGS).
● Profit Calculation & Forecasting - While sales data will show you the total amount of funds you’re bringing in, it won’t show you the profitability of your business. Quality accounting software that properly integrates with Amazon can offer real time profit calculations, as well as future sales and profit forecasting.
● Tax Data Support - Prepping for tax season can be complicated as an Amazon Seller, but accounting software can help you organize the tax data to help you figure out exactly how much you owe in a fraction of the time.
There are dozens of accounting software providers out there, but QuickBooks and Xero stand out as two of the best and most popular options on the market. They each offer robust features and can be customized to fit the unique needs of your online business. Additionally, both providers have tiered plans so that you can match the software features to your budget.
Naturally, there are some differences between QuickBooks and Xero, and you will need to evaluate what each provides so that you can make an informed decision that makes sense for your business. Fortunately, both companies offer free trials to let you sample their offerings before you pay for a subscription. To help you make a decision, we have also provided an overview of QuickBooks and Xero in the sections below:
QuickBooks Desktop and QuickBooks Online are two great options for Amazon Sellers, as they both offer the essential features needed to manage accounts and scale your online business. Whether you just need basic bookkeeping features or more comprehensive tools that can manage your accounts on Amazon and other selling platforms, QuickBooks is an excellent option. With QuickBooks for Amazon Sellers, you can track your sales and expenses, calculate your tax obligations, maximize tax deductions, manage invoices, accept payments, and even track inventory. To make it even easier to connect Amazon to QuickBooks, you can integrate the software with a third-party tool like ConnectBooks and completely automate the data transfer process.
Though Xero is not quite as well-known as QuickBooks, it is a very popular alternative for Amazon Sellers. It offers many of the same essential features like invoice management, inventory tracking, and even reconciliation with your bank account statements. Xero is especially popular for people in need of a more streamlined user experience. With Xero, you get a very easy and enjoyable UI and a quality customer support system. But just like QuickBooks, Xero is best when automated with a third-party tool like ConnectBooks that can automate and enhance its built-in accounting services.
You may think that once you sign up for quality accounting software like QuickBooks or Xero, you’re all set. However, this is usually not the case, especially if you have a lot of data to transfer between Amazon and the accounting software of your choice. This is where data integration tools come into play.
In essence, these tools help bridge the gap between Amazon and your accounting software by completely automating the process of data integration. Rather than manually entering data from Amazon into your software and having to double-check everything for potential errors, software like ConnectBooks automatically syncs the data from Amazon Seller Central, making it much easier and faster to manage your business finances.
Here are just a few of the benefits you can expect with quality data integration software for Amazon Sellers:
● Automated Syncing - With ConnectBooks, you can import all of your transactional data from Amazon to QuickBooks or Xero in a matter of seconds. Not only does this save you the time required to manually enter each piece of data, but it also greatly reduces the risk of errors. Syncing with ConnectBooks ensures that your data will match with 100% accuracy.
● Accurate Reporting - QuickBooks and Xero offer some reporting features, but they often require you to enter data manually each time you need new reports. Alternatively, ConnectBooks completely automates the process so that you can get up-to-date profit and loss reports, cash flow statements, and more. Having real time reporting capabilities gives you a much clearer picture of your financial health.
● Simplified Tax Prep - Software like QuickBooks and Xero makes it easier to understand your tax obligations, and ConnectBooks takes your tax preparation abilities even further. By automatically tracking sales and expenses, you can calculate your taxable income and prepare your tax returns much faster.
● Automated Reconciliations - It isn’t enough to sync your Amazon Seller Data with your accounting software one time. You must ensure that your data is always updated. With ConnectBooks, you can automate data reconciliations to fit your schedule with options for monthly, weekly, or even daily reconciliations.
Do you want to learn more about managing all of your eCommerce channels in one place? If so, reach out to the experts at ConnectBooks today!