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Business owners with robust accounting systems in place reap the following benefits:
Full awareness of how their business is performing
Awareness if business goals, sales, revenue, and profit targets are being met, if current strategies and processes are working, and if all financial obligations are being fulfilled. Full awareness is necessary for the growth of a business.
Full budget control
One of the keys to building a profitable business. Having full awareness of how money is coming in and out allows you to decide on what your business needs the most and allocate cash resources.
The power to forecast revenue
This tells you if your business model is working or not, and if you have enough financial resources to scale, or if there is a need to cut back on spending.
Accurate books for tax purposes
Implementing an effective inventory management strategy to reap these benefits though, is not an easy task, and may require you to invest in an Ecommerce/ Amazon Inventory Management Software solution.
Access to more capital
Accurate books make it easier to secure business loans from financial institutions you can use to fund an expansion of your Amazon business.
Without this important cornerstone in place, the foundation of your Amazon business will crumble easily. With poor accounting practices, you’ll be totally clueless about how your business is actually performing.
If you don’t know how your business is actually performing, you’ll be subjecting yourself to:
The dire consequences of poor decision-making
Your business, your dream, the one you worked really hard for, possibly destroyed.
Having the inability to scale
Having inaccurate financial data will kill your chances of gaining extra funding for your business—you won’t be able to secure business loans and it will drive away potential partners or investors.
Failure to comply with tax laws
Heavy fines.
The list of consequences goes on and on, but you get the picture right?
We’ve clearly established how important Amazon Accounting is, so let’s now find out what exactly it is, what it entails, and what the best software solutions are out in the market today.
What Is Amazon Accounting?
Amazon Accounting, simply put, is:
- The process of balancing the finances of your Amazon business.
- Closely monitoring, tracking, and documenting all of your business transactions in order to make sure that the assets and liabilities of your business are all accounted for.
- Ensuring the financial health of your business.
- Making sure that your business fully complies with all tax laws.
Amazon Accounting involves the following tasks:
Tracking your cash flow and income
This is basically monitoring and documenting the cash that goes in and out of your business. You’ll also need to reconcile your books periodically to make sure that the money leaving or going into your bank account matches what you spent or earned.
Tracking and managing your inventory and expenses
Aside from managing and monitoring your inventory levels, this also involves organizing operational costs and COGS, tracking business expenses, Amazon selling fees, and monitoring returns and refunds, etc.
So, should you be doing these tasks manually? Well, if you ask us, the answer is “No.”
Sure you get to save a bit of money, but are savings worth it if you consider how tedious, time-consuming, complicated, and error-prone doing it manually is?
If you are searching for a solution, start looking into Amazon Accounting Software.
What Does Amazon FBA Accounting Software Do?
Amazon Accounting Software helps you manage your sales operations. It automates the process of grabbing Amazon settlement transactions and posting them to a general ledger. These software solutions also come with additional features and capabilities which are discussed in the next section:
Common Features and Capabilities of Amazon Accounting Software
Core Accounting
- Revenue and expense tracking
- Functional modules include general ledger, accounts receivable, and accounts payable
- Bank reconciliation (matching of balances in accounting records and bank accounts)
Invoicing
- Creation of invoices for sold products/goods
- Setup of recurring billing via credit card payments if applicable
- Online payment collection
- Auto payment reminders and notifications
Sales Tax
- Updated database of all applicable sales tax rates
- Automation of preparation and filing of sales tax returns
COGS
- Profit analysis of goods sold (match product acquisition costs with sales price to show revenues, margins, and profitability)
- Tax liability reduction to lower cost of business tax
Fees Management
- Seller fees calculation based on selling plan (individual or professional)
- Fees management (per-item fees, referral fees, variable closing fees, and shipping fees)
- Budgeting assistance for additional fees caused by an increase in sales and changes made in a “What If” analysis.
Amazon FBA Inventory Management
- Management and monitoring of inventory levels (incoming products, products sent/delivered, products currently in fulfillment centers).
The Top Benefits of Using Amazon Accounting Software
Using Amazon Accounting Software has a lot of benefits:
You Save Time, Effort, and Money
Using accounting software makes a lot of processes such as data entry, sale to invoicing, and financial reporting faster, easier, and more efficient. It also prevents costly accounting errors usually caused by manual methods as your data is always accurate.
You Know Exactly Where Your Business Stands Financially at Any Point in Time
Sellers who do their accounting manually are often only made aware of their finances at periodic points of their operation (monthly, quarterly tax time, etc..). This puts them at a huge disadvantage, as they may be operating at a significant loss for extended periods of time. Knowing at any point in time where your business stands financially is a huge advantage because it allows you to make timely, data-driven decisions so you can identify and take advantage of growth opportunities quickly or quash a looming crisis in the bud. Having this advantage also enables you to make cash flow forecasts that can help you budget and schedule investments that will allow your business to scale. This is necessary if you want to build a profitable business.
You Won’t Have to Worry About Full Tax Compliance
When your Amazon Bookkeeping is up-to-date, you will know exactly what your tax obligations are and you’ll have enough time to prepare the cash you’ll need to settle your taxes when they are due. You won’t have to worry about receiving terrifying letters from the IRS and paying fines for late payments.
You Can Easily Separate Your Business and Personal Finances (Also Related to Full Tax Compliance)
For smaller sellers, this is a big concern, especially come tax time. Small sellers at times make business purchases or settle obligations using their personal credit cards. This makes it harder to disclose accurate information about their income and expenses once they are audited by the IRS. With Amazon Accounting Software, it’s much easier to maintain two separate accounts. This reduces your legal liability and allows you to manage your business expenses and taxes more efficiently.
The 5 Best Amazon Accounting Software for Amazon FBA Sellers in 2021
If you’re an Amazon seller looking for accounting software, this quick guide will help you a lot.
We at the Seller Spaceship team have spent some time doing solid research on the best Amazon Accounting software options. The information on this quick guide and the in-depth reviews we did on each software option is accurate and up-to-date.
Our top recommendations are:
The 5 Best Amazon Accounting Software for Amazon FBA Sellers in 2021: A Quick Look
Top Picks for the The Best Accounting Software for Amazon FBA Sellers in 2021
Founded by Greg Mercer in 2015, Fetcher is a cloud-based Amazon FBA Accounting Software solution that promises to provide its users with quick and easy access to financial insights that accurately reflect the standing of their business. Fetcher, which was created by a team of highly experienced Amazon sellers, software engineers, and data experts, enables users to easily manage their accounting and financial data. A part of a suite of premium Amazon seller apps which include Jungle Scout, Jump Send, and Splitify, Fetcher has a very high approval rating from its users, 93% of whom claim that they consider it to be an essential part of running their business.
Founded by Parag Mamnani in 2007, Webgility is a cloud-based Amazon Seller Accounting Software platform that aims to provide powerful financial management solutions for every type of ecommerce business. Webgility aims to increase the profitability and cash flow visibility of Amazon sellers through efficient automation of processes such as the tracking of Amazon fees. Recognized as an Ecommerce Software Leader by the highly popular software review platform G2 in its January 2021 Winter Report, Webgility is highly trusted by thousands of ecommerce businesses to process millions of orders and transactions monthly.
Founded by Paul Grey and Ashely Schroeder in 2014, A2X is an Amazon Seller Accounting Software service that provides automated ecommerce accounting solutions to ecommerce businesses around the world. A2X can support small to large businesses, and its powerful automation features and accurate reporting allow its users to save time and dedicate themselves to growing other aspects of their business. The winner of Xero Americas’ 2018 Industry Specific App of the Year, A2X is trusted by thousands of Amazon sellers and accountants around the world.
Founded by Nick Chandi in 2015, SlickPie is one of, if not the most well-known free Amazon Accounting Software available today. Catering mostly to small businesses. SlickPie addresses all the accounting needs of microbusinesses with its highly-functional suite of tools. SlickPie has users from over 100 countries and continues to get excellent reviews for the expense management experience the software provides.
Founded by Vladi Gordon in 2017, Sellerboard is a fast-rising Amazon FBA Accounting Software solution that provides profit analytics for Amazon sellers. Sellerboard automated accounting features allow users to easily analyze the profit and cost-effectiveness of their business, as well as monitor key performance metrics. Sellerboard’s popularity continues to increase, and currently, the software has over 4,000 users.
How Do I Choose the Best Amazon FBA Accounting Software for My Business?
Choosing an Amazon Software solution for your business might seem like a tricky proposition, but if you know what you should be looking for, it’s actually not that hard. Here are some things that you should consider before making a commitment:
Your Business Needs
To find an Amazon Accounting Software solution that’s perfect for your business, the first thing you want to consider is your needs and the needs of your business. Here are some questions you want to ask yourself before purchasing one:
- Am I ok with using multiple platforms or do I want an all-in-one solution that fully integrates into my Amazon account?
- What do I need it for? Do I need it for something specific like tax compliance?
- Do I need an entry-level software platform or a more advanced accounting solution?
- What type of financial data do I need to make better business decisions?
These are just some examples that may lead you to the right questions you should be answering to understand what your business needs. Once you find out the answers, you’ll be able to narrow down your search.
Ease of Use
Of course, you’ll want an Amazon FBA Accounting Software solution that will make your workflow simpler, more productive, and free from frustration. That’s why it’s important to choose accounting software that has a low learning curve and easy to use. You don’t really want too many bells and whistles on your accounting software—find something that’s simple, gives you the financial data sets that you need, and has a user-friendly interface.
Is the software platform a scalable solution?
As your business grows, its needs change. Is the software equipped to handle the evolving needs of your business? Does it have plan tiers with more advanced solutions and features or will you need to look for another platform once you hit a particular level of growth?
Integrations
The accounting software you will choose should be able to sync perfectly with financial or sales apps you may be already using, your business bank account and credit card.
Security and Encryption
Cloud-based accounting software has seen a surge in popularity in recent years because it has proven to be a better solution to hardware-based programs. It’s a perfect fit for eCommerce business owners who want to maintain a leaner, more nimble operation. However, keep in mind that data theft is a legitimate concern for business owners who migrate to cloud-based accounting. Make sure to check if your software solution goes the extra mile to keep the financial data of its users safe.
Customer Support
Amazon FBA accounting is complex, and every seller has his own unique set of concerns and needs. This is why it’s important to select a software solution that has a very responsive customer support team because you may need to request an enhancement feature or ask how to customize processes to get a particular set of data.
Cost
Finding the perfect accounting solution for you may be very well a moot point if you don’t have the cash to pay for it. Keep in mind that industry-specific accounting software comes with significant price tags, so make sure that you are ready to make the financial commitment before even searching.
We hope this quick guide helped you in your search for an Ecommerce/Amazon inventory management software solution, and if there’s something you’d like to add to the discussion, post a comment below!
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