What Is Amazon Accounting: Amazon Seller Accounting Software

 What Is Amazon Accounting: Amazon Seller Accounting Software

What is Amazon Accounting

These are tips, tricks, and techniques utilized by several prosperous Amazon sellers to assist change their accounting processes. We cannot offer specific accounting recommendations. Please work along with your certified public accountant or tax lawyer for acceptable tax, accounting, or legal recommendations.

We are progressing to assume that you are skilled in accounting and the information provided can assist you to create your Amazon accounting economically. For those who are unknown to business or to accounting, you will begin by reading through our course of study in accounting video. 

That may assist you to tell the fundamentals, but, that will not be enough. You would like to scan some books on accounting,

Select a category, and select somebody with some real ability to achieve the level of economic ability to the required requirement and complicated business selections that may verify, whether or not you fail or succeed.

Amazon Accounting Reports

We will review the different reports that you will need to generate for bookkeeping and managerial purposes. We will cover the payment, inventory, and sales reports.

We have provided a document outlining the steps to generate each of these reports for you entitled  Amazon accounting reports.

Note that some reports can take up to one hour to generate. If you do not see your report right away, check again later.

Payment Reports

These reports  summarize the sales you made, fees you collect, and the money Amazon ultimately paid you:

• Statement view report
• All statements report
• Date range reports
• The transaction view report
• Inventory Reports

You will probably get more data for FBA inventory using these FBA reports than your own accounting software.

Consider that your inventory data in your books usually will not reflect what is inbound to Amazon, what is missing, what is reserved or being transferred from one warehouse to another, and even what is damaged.

It is possible to account for these differences, but it is a dull process to update continually. For bookkeeping purposes, most sellers only update this type of information annually, for tax purposes.

While it is difficult and usually unnecessary to keep this information constantly updated in your books, it is available in seller central and should be accessed regularly so you remain aware of your inventory position.

It is natural to go to the inventory tab for your inventory-related reports, and there are a lot of reports available within the inventory tab, beneath inventory reports.

While these reports can serve specific purposes for inventory management, we have found for accounting purposes, this section provides little benefit. 

Many reports provide only partial data for accounting needs. We recommend using inventory health and managing FBA Inventory reports.

To navigate to these reports, click on the Reports tab, then fulfillment. Within the inventory section of the left-hand tab, click on show more.

The inventory health report provides a viewable and downloadable report of all of your inventory, while the managed FBA inventory report is only available for download and includes a report of all of your FBA inventory.

Amazon Sales Reports

Whereas the other reports we have look more like your bank statement, this reporting section aligns closely with google analytics in look, feel, and real-time sorting capabilities.

To navigate to your sales reports, go to the Reports tab and click on business reports. This will default to your sales dashboard showing today’s sales.

You can apply many filters here to produce reports by day, week, month, and year. You can also filter by product categories and fulfillment method.

The default viewing window from the dashboard will be a graphical display. Comparing sales between current and previous timeframes or spotting seasonal trends is quick and easy with the graphs.

To view this data as a list, you can select the table in the top right corner of the compare sales section. 

At any time, whether in graph or table view, you can click on download in the top right corner of the dashboard, and you will download a CSV table of the data currently displayed according to the filters that you have set or have been automatically set.

That is just the beginning though. The feed of the business reports section is below the dashboard link in the section entitled business reports.

All of the reports in this section are available for display and for download.

• Sales Report Filter
• By Date

Each row will show a different day with your data aggregated. In this format, your figures for all of your items are combined together, including stats like buy box percentage, average selling price, and average offer count. 

This report can be very useful when looking at overall account performance for a given period. Within the date section, there are subsections of:

• Sales and traffic
• Detail page sales and traffic
• Seller performance

By ASIN

These reports provide analytical data such as sessions, page views, buy box units ordered, ordered product sales, etc.

Data for these reports are generally available for up to two years. Within the by ASIN section there are subsections of:

• Detail page sales and traffic
• Detail page sales and traffic by parent item
• Detail page sales and traffic by child item

These reports can be viewed on-screen and filtered by data in the top right corner or downloaded in CSV format from the top left-hand corner.

These are valuable reports as they provide granular data for assessing figures for sessions, page views, buy box percentage, units ordered, and other figures.

Brand Performance

This section provides performance by data for customer reviews received, average customer review ratings, sales rank, buy box percentage, and missing image indicator.

It can be viewed on-screen or downloaded for mass sorting and pivoting purposes. Don’t underestimate the value of this report. You should build it into your systems so it is viewed along with your sales reports.

Inventory In Stock

Takes you to the Amazon selling coach section and provides metrics to help you stay in stock on each ASIN.

How To Track FBA Inventory In Your Books

For sellers who utilize the fulfillment by Amazon service for a portion of their products, accounting for inventory stored at Amazon’s fulfillment centers can be tricky, especially if they have their own warehouse locations.

We will cover some popular methods which sellers use to track or account for FBA inventory within their accounting system.

Sales Order Inventory Accounting

The method for tracking the allocation of FBA inventory within your accounting system to Amazon is to create a sales order to Amazon to deduct that inventory from your available inventory quantities in your books. 

Purchase orders are subsequently created from data extracted in your Amazon payment reports. In other words, after the product is sold and money is paid to you from Amazon, you will use their payment statement to generate your own invoice from your sales order. 

You will then receive payment against that invoice when funds are actually deposited into your bank account.

Advantages

This method more closely aligns with reality because all of the inventory on that sales order is in Amazon’s possession but has not been sold through the channel yet. 

This allows you to deduct what you have shipped to Amazon from your available inventory quantities in your books without recording sales. 

It also gives you the ability to create invoices from the sales order using Amazon’s payment reports which updates sales figures to your books and automatically changes the inventory balance on the sales order reflecting the remaining inventory at Amazon which has not been sold.

Disadvantages

You have to update the sales order or create new ones for additional items sent to Amazon. It can be difficult to create purchase orders to match items sold from multiple sales orders. 

Although QuickBooks and many other accounting software applications use sales orders in this manner, not all accounting systems do some only have sales receipts, which is very different from a sales order.

This process can confuse inexperienced bookkeepers and can be time-consuming if you send a lot of shipments to Amazon.

Growth Based Accounting For Amazon Sellers

As a disclaimer, we are not recommending the cash or growth-based accounting method for your business. Talk to your CPA about that choice.

We can tell you though that many experienced sellers utilize a blended approach by not continually tracking inventory in their books.

They do perform reconciliations using the Amazon FBA inventory reports and enter the inventory asset value at the end of each designated period.

This does not mean it is incorrect to enter every transaction and inventory value from purchases into your books.

That is how many businesses do it, but others have found a more efficient way for booking their Amazon sales that still satisfy tax requirements.

They, alternatively, choose to use tools outside their books to monitor, analyze, and manage their inventory and unit sales.

Blended Tactics

We have worked with many sellers who have grown exponentially in a year and have had trouble finding an efficient and reliable method of inputting Amazon sales data into their accounting software.

Popular Blended Methods

Let us review how these sellers account in a blended fashion.

How to enter inventory :

• Record the purchase of your inventory as an expense for a non-inventory item.
• Record the purchase of your inventory as cost of goods item tied to your Amazon sales income

How to enter income:

• Record one lump-sum payment from Amazon as Amazon sales income or
• Make out a sales receipt for Amazon product sales showing the total number of items sold without differentiating those items. 
• Create a bank for Amazon funds and transfer the amount paid to you by Amazon to your account every time there is an Amazon settlement. 
• Enter Amazon settlements as they occur, summarized by major account category: principal, shipping, shipping tax, tax.

How to enter Amazon fees:

• The Amazon expense total is all just one expense or
• You can summarize fees by major account category:
• Amazon commission, shipping chargeback, refunds, FBA fees, shipping to FBA.

List all fees as an expense for Amazon fees that go under commissions. Use refunds to issue a refund, create a custom Amazon customer and make all Amazon sales under this customer. 

Don’t record any Amazon expenses just enter the net received payment as the income from Amazon

Detail Methods Of Transaction 

If you are required to input every transaction detail into your accounting system there are three options:

Export the transaction detail report and enter individual orders and individual inventory into your spreadsheet or your accounting software. Create expense items for the different fees that Amazon charges, and enter these as well. 

Export files and convert them to a format that can be imported into your accounting software Use a software program to automatically sync your Amazon transactions with your books

What Is Amazon Accounting: Amazon Seller Accounting Software