As your Amazon seller business expands, you might find yourself scrambling to keep up with your newfound profitability. What was easy to track through your Amazon sales account now involves spreadsheets, receipts, and accounts receivable.
Many Amazon sellers initially find Intuit QuickBooks or QuickBooks Online to be an effective bookkeeping solution. As their businesses grow, however, it becomes clear that the software is still time-consuming and doesn’t necessarily check all the boxes for a busy entrepreneur. If this is you, then a full-service solution like Bench may be just what you need.
Why do you need to stay on top of your books as an Amazon seller?
Amazon’s Fulfillment by Amazon (FBA) service makes it easy to start a small business through the platform. They help you handle the logistics and shipping through your Amazon seller account, but you’re still responsible for crunching the numbers and keeping your chart of accounts to monitor your cash flow.
If you can’t keep up, you might find yourself facing a sticky late tax payment situation down the road.
Here are just a few of the reasons you may need a more robust ecommerce bookkeeping system.
You need to know your net profit. Is your business profitable? What’s your cost of goods sold? A quick glance at your updated bookkeeping numbers can tell you.
Your tax payments depend on it. As a successful business owner, you likely need to file quarterly tax payments, which you can’t do accurately without updated numbers.
You want to avoid being audited. The IRS keeps a close eye on small businesses and having sloppy numbers when it’s time to file your taxes is one of the top IRS audit triggers. Additionally, staying on top of your books helps you find additional tax deductions.
You’re ready to borrow money or seek investment. If you want to make a big leap forward in your business, you may need to borrow some money or seek out investors to make it happen. Banks and investors alike will expect to see current and past financial information about your Amazon store, and diligent bookkeeping will ensure you have those numbers ready for them.
You want to stay in business. Not tracking your money typically leads to financial mistakes, and financial mistakes can be a death sentence for a new venture. Bookkeeping helps you stay on top of your income, spending, projections, and inventory costs in a constantly shifting environment, ensuring the long-term health of your business.
What Amazon sellers need from an accounting solution
Every small business owner needs an accounting solution to stay on top of the numbers, but what do Amazon sellers specifically need for bookkeeping? Here’s a brief list of what you should look for.
Ability to generate reports at any time
You need to be able to review your data on demand, whether to apply for a loan, file your income taxes, inform discussions about inventory or payouts, or simply for the joy that comes with seeing a healthy income statement! With integrated bookkeeping or accounting software, your real-time numbers are available with a simple click or tap.
International currency management
Amazon is a worldwide platform, which means you should be able to sell to different countries with different currencies. It’s hard to do this, however, if you’re scrambling to figure out exchange rates to calculate profits and expenses.
Sales tax calculations
Being in business—and doing it successfully—requires a lot of tax payments. You’ll not only pay income taxes, but you’ll also be handling sales tax payments to any state you do business in. Your financial solution should allow you to calculate the sales tax that your customers are paying and track the sales tax you’ve received and need to pay to the state, city, county, or other taxing body.
Ability to keep track of seller fees
Amazon FBA is a convenient and efficient way to do business. Amazon doesn’t offer this service for free, however. There are Amazon seller fees to track and a good accounting system should help you do that, making your Amazon business as streamlined as possible.
Your accounting and bookkeeping solution should be accessible not just to you, but to your business partners, employees, and your tax professionals. You should be able to access your numbers from anywhere: your home office, your actual office, your accountant’s office, or your laptop on the beach.
5 reasons that Amazon sellers need Bench
If you’ve worked with a DIY accounting software program like QuickBooks, you know that these products can help you manage more complex financial situations than a simple spreadsheet (where most business owners start their bookkeeping). However, as your business grows, you may start to come up against their limitations.
First, you need a third-party software system to connect your Amazon account to QuickBooks. Secondly—and more importantly—you’re still doing a tremendous amount of the work yourself. That’s why many Amazon sellers move on to a third solution: They outsource bookkeeping completely.
Bench offers Amazon sellers many reasons to consider making a switch.
1. You get a team of experts.
If you’ve been running your books yourself through Intuit QuickBooks, you might feel like an unwilling expert on your financials—and you may also have a few accounting mistakes under your belt! With Bench, there’s no need to worry about mistakes or oversights as you’re working with a team of tax and bookkeeping professionals. You’re truly outsourcing your bookkeeping, which means you get that time back for other tasks.
2. You can enjoy visual accounting.
Being able to see at a glance how well your business is doing or what your business needs allows you to make better decisions and adapt more quickly to changes in the market. With Bench, you can dig into fully-featured financial reports any time you want to.
3. You get to automate and offload the full bookkeeping process.
Automation is one of the best ways to make your business efficient. Your automation starts with the software. Bench connects your bank account, your credit card company, and your processor. It can also tap into your Amazon seller central.
Once your transactions are imported, the bookkeepers at Bench take over to handle the rest of the process, categorizing your transactions, setting up your ledger, updating your receipts, and tracking everything you’ll need for financial reporting at tax time.
4. You can enjoy a customized experience.
There are many uniform standards when it comes to bookkeeping and accounting, but how do those standards apply to your specific business? When you start working with Bench, we’ll work with you to understand your business transactions, find the right way to categorize them, and make your accounting system match the rest of your business processes.
5.You can enjoy tax planning services year-round.
Bench isn’t just basic bookkeeping. It’s a full financial solution that includes tax preparation and even filing, if needed. You can also count on Bench to help determine how much you should be paying in quarterly income taxes and sales tax, plus how to structure your business and expenses for optimum ecommerce tax deductions. And if you ever find yourself facing an IRS audit? We can help there as well.
How Bench can help
As your business gets larger, so will your tax prep and bookkeeping needs. If you’re already stretched thin trying to manage your finances and the other daily tasks of successful Amazon sellers, now’s the time to bring in some help. We’ll handle the financial busy work of bookkeeping and tax filing, keeping you up to date with monthly and on demand financial reports, so that you can focus on running your business.
While QuickBooks can help streamline your small business bookkeeping, it’s not a perfect solution. If you truly want to save time and energy for the tasks that need your full attention, you don’t want to learn and manage a new software system. You may benefit more from outsourcing your bookkeeping entirely.