As a new or established Amazon seller, do you struggle to keep finances in order? Are you ready to start focusing on growing your business rather than tedious accounting details? Amazon is a competitive marketplace, which makes balancing finances difficult for many business owners. Investing in a Certified Public Accountant (CPA) specializing in Amazon bookkeeping lets you easily track every detail. Maintaining a clear understanding of your business’s financial health is crucial for long-term success. A polished e-commerce accountant will be well-informed about new accounting software and time-saving tools to help increase efficiency within your business.
Digital businesses are competitive and always changing. If the majority of your sales take place on Amazon, the largest e-commerce marketplace in the world, it’s necessary to hire experienced e-commerce financial experts. They will manage everything for you without missing important details, allowing you to build a strong foundation for your Amazon business’ future. Accounting services may include forecasting, bookkeeping, tax preparation, balance sheets, income statement production, financial guidance, and more.
In this guide, we will discuss the importance of hiring an experienced e-commerce accountant to handle your Amazon business finances. With help from financial experts, you’ll learn about the different services offered and how to streamline your cash flow with help from financial experts. We will also briefly review how Amazon has impacted the e-ccommerce marketplace and what it means for the future of digital businesses.
How Amazon is Shaping the E-commerce Marketplace
Amazon is the world’s largest online retailer, allowing businesses to buy and sell products, make money transfers, and transfer data from a device with an internet connection. This is impressive, considering Amazon started as an online bookstore in 1994.
For an e-commerce business, managing finances on platforms like Amazon requires specialized accounting services to navigate financial challenges, ensure compliance, and enhance growth as the business scales.
Since then, Amazon has evolved and grown into additional product areas and third-party sales where retailers and individual sellers utilize Amazon to sell goods and services. This is especially beneficial for companies with less online presence because it allows them to expand their brand, products, and services on an internationally known platform.
Amazon, in a sense, leases an online space to retailers who want to use the platform as a supplemental outlet for their online sales. Large and small companies use Amazon to sell products, while also selling the same inventory on their company website. This has allowed many businesses to grow exponentially and only continues to do so.
Benefits of Hiring an Amazon Bookkeeping Accountant
With so many sellers using Amazon Marketplace, hiring an outsourced accounting firm to gain financial guidance will allow you to make better decisions. As a business owner, you are responsible for all assets and liabilities, so finding a company experienced in the e-commerce marketplace saves time, stress, and money in the long run.
With help from seasoned experts, you won’t have to worry about the small details. They will manage everything for you, such as forecasting, bookkeeping, inventory tracking, tax preparation, and accrual accounting, which records revenue and expenses when they are earned rather than when they are paid, providing a more accurate financial picture over time. Additionally, tracking and categorizing financial transactions is crucial for understanding the financial health of your business.
Below are a few key areas your accountant will keep track of for you.
Cash Flow and Income Tracking
Since there is a higher marginal cost for Amazon businesses that sell physical goods, such as Amazon, it’s crucial to ensure your cash flow is managed and tracked at all times. Properly managing financial records is essential, particularly during tax season when valid expense proof is necessary. An outsourced e-commerce expert will be able to handle this for you without losing track of the numbers.
For Amazon sellers, specialized accounting services and software add-ons are vital to effectively manage finances, automate processes, and accurately track sales across multiple platforms.
An outsourced e-commerce CPA will consistently reconcile books weekly or monthly to ensure the money leaving an account matches the money spent. By using reconciled books, an outsourced accountant will create these forecasts, analyze cash flow and expenses, and give your business tailored feedback. A business should always know what money is coming in and coming out of their account. An accounting team will do just that.
Amazon has and continues to change the way people do business by making it easy to gain brand awareness and utilize the Amazon Marketplace to expand their potential for an increase in sales. No matter the business, sales should be a priority. Outsourcing your accounting needs to handle bookkeeping, running reports, and other financial components will allow you to focus on streamlining your business.
Inventory Management Software and Expenses Tracking
Amazon accountants can track and manage your inventory using inventory management software. They will also organize operating costs, costs of goods sold, and allow you to easily track other business expenses. Additionally, tracking shipping costs is crucial for accurate financial management and inventory tracking.
While businesses work on selling products, financial e-commerce professionals take all the work companies don’t need to worry about and do it for them in cost-effective and efficient ways. They are committed to helping companies accelerate their revenue.
E-commerce accountants will also track your Amazon selling fees, including Fulfillment by Amazon (FBA) fees, storage fees, and shipping fees. The Amazon Marketplace provides business owners with a platform that effectively keeps track of inventory. This includes purchases, cash flow, and returns by using FBA, which expedites wait time by utilizing the Amazon Prime’s free Two-Day shipping on products. Amazon makes FBA cost-effective and simple by allowing sellers to pay as they go. Since the cost of shipping is included in fees, the financial breakdown is transparent. Although, it is often hard for business owners to track all of the fees on their own. This is where an expert e-commerce accountant steps in.
Since the inventory is purchased upfront, returns can also make the accounting aspect a little tricky. Returns have to be tracked and processed, which requires an accountant to factor in returns to accurately forecast cash intake and develop projections while ensuring all books are cleared.
Outsourcing Your Amazon Accounting Needs
When it comes to investing in Amazon accounting services, it’s best to start at the beginning of the selling process before your business fully takes off. Although, it’s never too late to invest in accounting services. If you are already an established Amazon seller who is struggling to balance the numbers and the business simultaneously, we’ve got you covered. At Fully Accountable, our team has the right expertise and experience in the e-commerce accounting industry to keep your organization ahead of the curve, save you money, and increase profits.
