4 Bookkeeping Tips for Amazon Sellers

November 15, 2022by admin

Bookkeeping helps Amazon sellers organize their small business’s financial transactions. There are several benefits of bookkeeping that can save you and your business money and time:

  • It helps avoid taxes, potential fines, and fees.
  • It helps keep and organize records and documents.
  • Your personal and business finances become separate.
  • The occurrence of errors will be minimized.


Choose the Right Accounting Support

One of the main considerations includes accounting support when building an Amazon business. Many newcomers to Amazon choose to use accounting software to track their transactions. However, as your business develops, taxes can become more complicated.

This is where having a professional accountant on your team comes in handy. Not only does an accountant ensure you stay compliant with state and federal tax regulations, but they also help you save money by maximizing taxes deductions and credits that apply to your business.


Costs of Goods Sold is worth Tracking; Keep an Eye over it!

You need to keep an eye on COGS (Cost of Goods Sold). It helps you to find out the gross profit of your business. You can track the cost of goods sold in three ways:

Average Cost Method 

This method tracks the average cost of your product over time. This option is useful because you can track the cost regardless of the purchase date.

First In, First Out (FIFO) 

This inventory method tracks the first-to-arrive items that you want to sell first and at the lowest price.

Last In First Out (LIFO) 

This inventory method tracks the last arrived items that you want to sell first and at the highest price.


Optimizing your Amazon Accounting Automation

Amazon’s accounting software integration with Seller Central is a great way to instantly share data between the two platforms. However, using this data effectively requires significant manual hours and calculations, not to mention accounting skills, which many e-commerce sellers don’t have. The right accounting software can help you spot trends early so you can make the best business decisions.


You can use accounting software:

  • To track sales tax obligations
  • To Stay on top of your expenses
  • To forecast future expenses and sales
  • To evaluate cash flow
  • To monitor costs of goods sold


Accounting automation programs also include training videos or written instructions so you learn how to use them as you grow your e-commerce business.


Remit and Collect Sales Tax

For bookkeeping, it is important to book sales through Amazon net of sales tax. This is because sales tax is not part of the Amazon seller’s income (and is not subject to income tax).

The Amazon seller is an “agent” who collects the customer’s sales tax and remits it to the appropriate state.

Another common account for an Amazon seller is “sales tax liability” in bookkeeping.

Record the sales tax collected by the Amazon seller that is yet to be remitted to State as a liability.

Determining, calculating, collecting, and generally managing sales tax for an Amazon seller can be complicated. As a result, many Amazon sellers set up their accounts to calculate and collect sales tax automatically.


Fusion Ave Private Limited (FAPL)

FAPL is a team of professional accountants and bookkeeping experts having years of expertise in delivering the right services to a wider audience.