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Amazon marketplace is an e-commerce platform that is owned and operated by Amazon It enables third-party sellers to sell either new or used products on a fixed price online marketplace. Furthermore, depending upon the usage, the billing reports are created. The AWS Cost and Usage report gives an in-depth information about the use of AWS resources and the projected cost for the specific usage.

 Let's Define What Is Amazon Seller Bookkeeping?

Simply put, Amazon seller bookkeeping is the recording and storing of a merchant’s day-to-day financial transactions. Common financial transactions include sales, purchases, shipping costs, money paid to suppliers, loan payments, and advertising spend.

 Which Reason impoetant for Amazon seller?

 There are multiple reasons why accounting and bookkeeping are important for Amazon seller businesses, but we’ll start with one of the most important: tracking your financial activities allows you to evaluate how your business is performing over time.

Profit is the money left over after all other expenses have been taken out. With proper bookkeeping,

You can easily calculate your profits by subtracting all your expenses from your total revenue. Without this data, it’s difficult to assess the health and long-term viability of your business, as you’ll have no way of knowing how much (if any!) profit you are making.

Another reason accounting and bookkeeping are important for Amazon seller businesses is because it allows you to spot discrepancies as they occur. For example, let’s say that your advertising costs are way higher than they should be. Upon further investigation, you discover that the advertising agency you use accidentally double-charged you. This error may have gone unnoticed if you hadn’t reviewed your financials.

 And then there’s the tax side of things, of course. When you file your taxes, you’ll need to report your income and expenses, but if they’re not classified correctly, you may be missing out on huge savings or may even incur a penalty.

 What Makes Amazon Bookkeeping Different From Most Other Businesses?

1) Amazon bookkeeping is best done on an accrual basis, unlike most other small businesses that run on a cash basis.

The problem with cash basis accounting is you may buy inventory weeks or months before you sell it, and then you don’t get paid for it until two weeks or more after it’s sold and shipped. So with cash basis accounting (income and expenses are posted when they happen) you can have months that look very profitable (because you bought no inventory) and months that look very bad because you bought a ton of new merchandise.

2) With an Amazon business it is very important to track COGS correctly and use landed cost whenever possible. As you can see above, COGS is typically one of the single biggest expenses for an Amazon seller. In order to get a true cost of selling the products, you want to include both the cost of the product itself as well as any costs incurred to get it to the Amazon warehouse.

3) If you have more than one sales channel, you want to make sure you are separating income and expenses by channel. Although you may be selling the same products in various markets, you definitely will want to know which of those channels is producing the best return on that time.

4) Consider tracking operating expenses separately from overhead expenses that are legitimate business deductions but not required to run the business for when you are preparing to sell the business. The value of the business when you sell it is based on the Seller’s Discretionary Earnings (SDE) which is profits plus anything you spent on the business that wasn’t needed to actually produce the results you got. These would be things like meals, travel, continuing education, consulting, product samples, and any one-time costs.

 Conclusion

Our final advice you to use QuickBooks for Your Amazon Business. Beacuse globally it will be use by every small and medium sized Business, Xero is alternative for Quickbook.

Easy explained!

Step 1:

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