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.
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.
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.
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.