Helping You with Your Amazon FBA Business

Accounting for Amazon FBA Sellers

Hello & Thank You!

First of all, I want to thank all of you for taking the time to read my blog.  When I started writing about my Amazon FBA Journey, I truly didn’t think that anyone would even find this blog and that I would be just writing to myself.  I was very wrong and I appreciate each and every one of you!

Since it’s January and a great time to get caught up on your bookkeeping,  I’m going to discuss Accounting Systems and how to get your Cost of Good Sold (COGS).

QuickBooks Online Simple Start

I use QuickBooks Online Simple Start to keep track of my finances and to generate my Profit and Loss and Balance Sheet.  It’s a challenging program to learn and I often see new users asking how to get their Amazon FBA data into QuickBooks.  But once QuickBooks is setup and learned, then it’s all very routine and it really doesn’t take very much time to keep up with your monthly bookkeeping.

For some QuickBooks help, read How to Enter Amazon FBA Numbers into Quickbooks Online.

Why Do I Need QuickBooks (or other accounting software) if I have InventoryLab?  Because InventoryLab doesn’t track your Assets and Liabilities while QuickBooks does.  In other words, InventoryLab doesn’t tell you how much money you have in your checking account (asset) and how much you owe on your credit cards (liability).

I monitor my checking account weekly and make sure that I always have enough to pay my upcoming expenses and credit card/loan payments.  ***Profit First has really helped me with not overspending. 

How Do I Learn QuickBooks?  Find a local QuickBooks class, ask questions in Anna Hill’s Accounting We Can Go Facebook group or take one of Anna Hill’s classes such as her Accounting Boot Camp.  ** I’m not affiliated with Anna Hill and have not taken any of her courses, but I have learned a lot from her Facebook group.

1/18/17 Update: Jim Cockrum & Team just came out with the Proven Accounting Training Course.  This course teaches you how to setup QuickBooks Online.

What About Using GoDaddy Bookkeeping?  Many Amazon FBA Sellers use GoDaddy Online Bookkeeping.

The positive for GoDaddy is that it automatically imports your Amazon sales data and the negative is that it doesn’t produce a Balance Sheet.  There is a learning curve to it and fortunately Jessica Larrew of the Selling Family created a step-by-step GoDaddy Tutorial to help you setup and use GoDaddy.

What if I Don’t Want to Do My Own Bookkeeping?  No problem, there isn’t any law that says that you must do your own bookkeeping.  As with just about everything else in your Amazon FBA business, you can outsource it.

QuickBooks Problem – It Doesn’t Calculate your COGS

QuickBooks isn’t perfect and one problem is that it doesn’t calculate your COGS.  This is how much you spent on your sold inventory.   For example, if you bought a book for $5.00 and later sold it, your COGS for that sale is $5.00.  It’ll be nice if Amazon gave you a COGS report, but they don’t since they don’t know how much you spent on your inventory.

You’ll need to know your COGS amount for your monthly Profit and Loss statement and for your annual income tax return.  Profit First people will also need their COGS number at every Amazon payout.

COGS Solutions

Here are a few ways to get your COGS:

My Simple COGS Tracking Spreadsheet found in this blog post: Simple Method for Amazon FBA Sellers to Calculate their COGS in Excel.

Caleb Roth’s Tracking Spreadsheet: This is what I use because it’s quick and easy to get your COGS.  I just go to the Income Statement tab and enter the date range that I need my COGS number for.

The Tracking Spreadsheet calculates your COGS.

InventoryLab: Go to Reports -> Profit and Loss to get your COGS number.

Both the Tracking Spreadsheet and InventoryLab do so much more than just give you your COGS and you can learn more about them by reading The Tracking Spreadsheet vs. InventoryLab.

I currently use InventoryLab for listing and I use the Tracking Spreadsheet to have a backup copy of my listing and sales data.

When I briefly cancelled my InventoryLab subscription last summer, I was not able to log into IL to access my data.  Luckily, I had my listing and sales data in the Tracking Spreadsheet.  As a side note, if you are a IL subscriber, make sure you export your data to Excel first or have some type of backup before you cancel it.

Accounting Nerd

I admit that I may be a bit of a nerd because keeping my QuickBooks accounts up-to-date is one of my favorite Amazon FBA tasks.

Please feel free to ask me any questions about setting up your accounting system and I’ll try to help.  However, I’m not prepared to give a full-blown QB tutorial (I’ve been asked before to do this).  Also, as my disclaimer, I’m not a Certified Bookkeeper or a Certified Public Accountant.

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{ 12 comments… add one }
  • Vanessa January 3, 2017, 9:50 pm

    Hello
    I love your blog, it’s so practical and to the point, no fluff:)
    2016 was our first year as Amazon sellers and I’m nervous about filing taxes. Do I need to go to someone special who understands FBA or can I just go to an CPA? I’m not even sure what to bring when it’s time to do them.. any help is always appreciated. Thank you Diana and Happy New Year.

    Reply
    • Diana January 4, 2017, 12:11 am

      Hi Vanessa,
      I don’t think you need to go to a CPA that knows Amazon FBA because sales and expenses, debits and credits are all the same across businesses. My CPA did our taxes for our auto repair shop and now for my FBA business. The types of info that he needs is exactly the same.

      Your CPA will need to know stuff like: year 2016 sales, COGS, expenses (Amazon FBA Fees, prepping supplies, subscription services, training programs), your ending inventory.

      My accountant also requires the December 2016 business bank and credit card statements. Basically, he wants proof.

      They typically don’t want you to bring in a box of unorganized receipts. But they should be organized in case you need to find a specific one. I organize mine by month.

      This post may help: Year End Reports and Preparing for Your CPA Meeting

      Good luck!

      Reply
  • Paula January 4, 2017, 2:47 am

    Diana,
    Thank you for writing interesting and timely blogs. I loved following along last year with your shoe sale ups and downs!
    Keep up the good work- your readers appreciate you!

    Paula

    Reply
    • Diana January 4, 2017, 4:10 am

      Thank you Paula for your nice words! I’ve been refocusing on shoes since the beginning of Dec and so excited to see where that takes me in 2017.

      Best wishes to you and have a Happy New Year!

      Reply
  • Nick February 21, 2017, 10:55 am

    Hi Diana

    Great post and really helpful for me!
    Speaking about the mentioned Facebook group, do you have any recommendation for another Facebook Group? I sadly got rejected to join the group because I’m in the process of setting up my business and not already running it. I would love to join a group where I’m able to educate myself a bit with this topic upfront. I think its always great to be prepared as much as possible and I could imagine that the same questions related to accounting are asked over and over again – which is something I want to avoid.
    Any idea for a Facebook group?
    Thank you!
    Nick

    Reply
    • Diana February 21, 2017, 1:57 pm

      Hi Nick,

      I’m sorry and quite surprised that you were rejected from joining. I didn’t know that there are requirements for joining the group.

      Unfortunately, I don’t know of any other Facebook group that is specifically about accounting for Amazon FBA Sellers. I know you can ask questions in the other Amazon FBA groups, but usually the answers are “go talk to your CPA” or sometimes people unintentionally give out wrong answers. I really wish that there are more resources available since accounting is such an important part of your business.

      Good luck and if you have any specific questions, I can try to answer them or point you to where you can research them.

      Diana

      Reply
      • Nick February 21, 2017, 7:27 pm

        Hi Diana

        Yeah I wasn’t aware of that as well. The intro is so inviting 😉

        You are so right, exactly this “go talk to your CPA” is one of the reasons why I would like to take a deeper look at accounting. If I find another Facebook group, I’ll let you know, maybe it will be interesting for others as well.
        Thank you for your offer to answer my questions! 😉
        Nick

        Reply
        • Diana February 21, 2017, 7:59 pm

          Yes, if you find a different Facebook group, you can post it here and let others know! If I find one too, I’ll send you an email.

          Diana

          Reply
  • Othon April 22, 2017, 1:34 am

    Hello Diana,

    Quick question, do you know if there is a way to Migrate your data from GoDaddy Bookkeeping to Quick Books?
    I’m using go daddy bookkeeping but I’m a. It dissatisfied that it doesn’t give you the balance sheet.

    Reply
    • Diana April 22, 2017, 2:01 am

      Hi Othon,

      I don’t know for sure, but you might be able to export or download your GoDaddy Data to an excel spreadsheet. Then open Quickbooks and import that file.

      Good luck and let me know what you find out!

      Diana

      Reply
  • Ashley May 2, 2017, 6:03 am

    Ashley here from A2X, I just wanted to mention we now support QuickBooks directly, and we can calculate COGS automatically for you (plus automate all the fees and sales too).

    Reply
    • Diana May 2, 2017, 10:48 pm

      Hi Ashley, good to know! That’s something I may be interested in looking into as my annual QB subscription ends this summer.

      Diana

      Reply

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About Diana


I am working towards creating a full-time income by selling on Amazon. It's a lot of work but very fun! If you're interested in selling on Amazon, be sure to follow my blog as I'll be providing you with lots of tips!

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