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A Peek at My Amazon FBA Balance Sheet

Hi everyone, I hope you all survived Seller Central being down last night.  My Yahoo email account was also down and between the two not working, I was unable to respond to Amazon’s request for more documentation as part of the Health and Beauty approval process.  I’m happy that everything was up and running this morning and that I was able to send in my receipts.  I hope that they let me know later today if I’m approved or not.

In today’s post, I am going to show you my Balance Sheet that I generated in QuickBooks Online.  The Balance Sheet shows your assets, liabilities and equity at a specific point in time.  Granted with FBA, there aren’t a lot of accounts to worry about, but it’s good to know information such as:

  1. how much money do you have in your checking account?
  2. how much money do you have invested in unsold inventory?
  3. how much did you borrow to finance your inventory and supplies?
  4. how much sales tax did you collect and still need to pay to the states?

Unfortunately, a Profit and Loss Statement isn’t going to answer those questions.  That is why a Balance Sheet is important so you know how much you have and how much you owe at a given time.

Before I show you my Balance Sheet, I will put in my disclaimer that I’m not a professional bookkeeper or accountant.  However, I did do my books for my former business in a similar fashion and never had any complaints from my accountant.

Finally, here is my Balance Sheet:

Balance-Sheet-Sept-24-2014

I know that my Balance Sheet shows a date of September 24, 2014.  But unfortunately, not all of my accounts are up to date.  My Inventory, Amazon FBA and Net Income accounts do not reflect any sales or inventory adjustments since my last Amazon payday on Sept 17.  For the purpose of this post, my actual numbers aren’t important.  My reason for writing this post is to share with you what a Balance Sheet looks like and to show you the accounts that I’m tracking.  My end of the month numbers will always be accurate after I enter my monthly accrual entries. With that said, here are my accounts:

Asset Accounts
Checking Account: This is a free business checking account that I opened in June at my credit union.  Amazon deposits my payouts into this account and I have my monthly subscriptions deducted from here.  The plan is to keep a minimum of $100.00 in this account at all times.

Inventory: I am using this account to track the dollar value of my unsold inventory.  So, if I buy $100.00 of inventory, the value will go up by $100.00.  When I sell something, the cost that I paid for the product sold gets transferred out of inventory and listed as a COGS expense.  However, that doesn’t happen automatically as this version of QuickBooks doesn’t have an inventory tracking system.  I track my inventory and COGS amounts in Excel and then make manual adjustments in QuickBooks.

Liability Accounts
Barclay Credit Card
: This is a new credit card that I opened earlier this month.  It is to be used for Amazon FBA inventory and supply purchases only.  It has a 0% interest rate for the first year and gives me cash back on my purchases.  I will pay off my balance every month so that I don’t go into credit card debt.

Loan – Poisson: When I started FBA, I bought supplies, inventory, training materials, etc. using money from my personal accounts.  I treat these amounts as a loan from myself that needs to be paid back.  I owe myself $1135.94 as that is what I have used so far to get my FBA business going.  I am not charging myself interest and will start to pay myself back in monthly payments beginning in January 2015.

Sales Tax Payable: This is sales tax that I collected but have not yet paid to the states.  This is because some of my returns are due quarterly and annually.  It’s important to know how much you owe so that you don’t spend that money and not have it when it’s time make your tax payment.

Amazon FBA: This is where I track the money that I owe to Amazon.  This is for all of those fees that Amazon charges, such as the monthly professional fee and the inbound shipping fees.  For example, if I were to ship inventory to Amazon today and my shipping fees were $10.00, I would put the $10.00 into this account.  That $10.00 will get paid to Amazon in October when they deduct it from my next payout.

Equity – Net Income
This is my running profit or loss total since starting FBA on April 30, 2014.  This is the same number that shows on the bottom line of my Profit and Loss Statement for the same end date.

A Few Final Thoughts…
I hope that this post helps demonstrate that a Profit and Loss Statement doesn’t give the whole story.   If you look at my income report that I posted here, you wouldn’t know how much I have to spend in my checking account or how much inventory that I still have sitting around waiting to sell.  It doesn’t show you much money I borrowed to finance my expenses or how much I owe in sales tax.

Some may wonder why I’m posting my numbers especially when they aren’t the most motivating numbers.  Well, I just want to share how I’m doing with FBA and I hope that my experiences may help others.  I know that I’m not moving ahead at the fastest pace, but I am moving forward each day.

If you are undecided on which bookkeeping system to use, keep in mind that GoDaddy Bookkeeping does not have the Balance Sheet Report (at least it didn’t when I tested it last month).  That is one of the main reasons why I chose QuickBooks over GoDaddy. However, if you prefer not to use QuickBooks, you can still keep track of your balances with an Excel spreadsheet.

I hope you enjoyed this post and if you have any questions, please feel free to ask me in the comment section below.

Photo Credits
Featured Image: © alexskopje – Fotolia.com
Picture of Balance Sheet: Diana Poisson

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{ 9 comments… add one }
  • GS September 29, 2014, 3:51 am

    Diana, This is great. I like the way you keep track of everything. Very informative post!!! Thanks

    Reply
    • Diana September 30, 2014, 1:00 am

      Hi GS, thanks for stopping by! I hope this helps you when you start your FBA business! Take care and let me know when you get started!

      Reply
  • Eugene Cheng November 5, 2014, 3:24 am

    Hi Diana,

    Great blog you have got here,keep it up!
    My partner and I started an Amazon FBA coaching group and we are teaching and guiding those who are interested in starting a 90% automated Amazon FBA business.

    We are running a Free 30 Day challenge to kick start your Amazon FBA business if you are keen to join? Here is a link to watch the introduction and 30 day challenge video.
    https://ecgroup.leadpages.net/ecommerceintrov2/

    And if you are not willing to wait for the weekly coaching videos, we have a course on Udemy, here is a discount coupon to use, WINNING75
    https://www.udemy.com/how-to-start-a-90-automated-online-ecommerce-business/

    But I honestly encourage you and your friends to join the free 30 day challenge, it would be a great learning process!

    Look forward to seeing you there!

    Respectfully,
    Eugene

    Reply
    • Diana November 5, 2014, 4:00 pm

      Hi Eugene, Thank you for letting me know about your business. I will be taking a look at the video after work and see if that’s something that I want to do. I wish you success with your coaching group! Diana

      Reply
      • Eugene November 6, 2014, 2:09 pm

        No worries Diana.
        Thanks for your time and support. =)

        Cheers,
        Eugene

        Reply
  • Norman September 25, 2015, 4:37 pm

    Hi Diana,

    Great post, I’ve found it very informative. Your blog “How to Enter Amazon FBA Numbers into Quickbooks Online” was invaluable for me in entering my Amazon sales in Quickbooks pro.

    I wonder whether you could elaborate on your inventory section above. I would like to know how to account for the cost of the inventory that I have sold, I can’t get figure it out!

    I am tracking the monetary value of my stock, 10k in stock against an ‘other current asset account’, and need to reduce this by the value of the stock that I have sold. For example if I sold 2k worth of good, the stock value should be reduce from 10k to 8k. I interpreted your section on inventory to mean that I should setup a COGS account and transfer the cost of the good that I have sold from stock to this account but the COGS account isn’t listed as one of the account from which I can transfer from stock.

    I appreciate that you are not an accountant but any help would be greatly appreciated.

    thanks
    Norman

    Reply
    • Diana September 25, 2015, 8:39 pm

      Hi Norman,
      You are on the right track. You will need to setup a COGS account. In the QB Online version, you can do that in the “Chart of Accounts” section. You’ll add an account and scroll through the categories until you find the “Cost of Goods” Category. Then it has some choices. I used the “Other – Costs of Services”. But looking it over, “Supplies & Materials” may be better. The category descriptions don’t always seem to be good, but choose the best one that you think works. Here’s a picture:

      QuickBooks Cost of Sales

      Anyway, then what I do is on the last day of the month, get the total of the stock that you sold. In your example, that would be $2000.00. So, then on Sept 30, you would transfer $2000 from your inventory account and apply that to your COGS account. Now your inventory account will show $8000, and your P & L will have a COGS expense of $2000.00.

      Hope that helps.
      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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