Helping You with Your Amazon FBA Business

Year End Reports and Preparing for Your CPA Meeting

Since Dec 22, I’ve been on an Amazon FBA vacation and spent time with my brother and went on a short trip to Lincoln City, Oregon.  While there, I was able to find some shoes to resell but other than that, I haven’t done anything Amazon-related.

Shoes from Outlet Stores

The shoes that I bought in Lincoln City.

Yesterday my brother flew home and now it’s time to get busy again.  Today I spent a couple of hours processing my shoes and thinking about the upcoming year.  Shoes will be a main part of my business in 2016 and I’ll write more about that in a future post.

Today though, I want to talk about taxes because tax season is coming up soon.

In Amazon FBA Blogs and Groups, you are often advised to get a CPA.  But besides finding a CPA, what else do you need to do?  In this post, I’ll go over what I plan on doing to prepare for my CPA appointment.

Even if you choose to do your own tax return or use a tax service such as H&R Block, please be aware that running year-end reports, doing bookkeeping and organizing all of your tax-related information still needs to be done regardless of who will be doing the actual tax return.

** Please remember that I’m not a tax or legal professional.  The information that I’m sharing in this post is based on my own personal experiences.

Year-End Inventory Reports
Amazon doesn’t know your inventory value (purchase price of unsold inventory) because we don’t submit our buy costs to them.  But Amazon does have reports about your inventory that will help you calculate your year-end inventory value.   The reports that I’m going to download and save are:

  • Amazon Fulfilled Inventory
  • Monthly Inventory History
  • Received Inventory

All of these reports can be found in Seller Central -> Reports -> Fulfillment -> Inventory.

The_Resellers_GuideFor those of you that purchased Steven Smotherman’s book, The Reseller’s Guide to a Year in FBA, he goes into more detail about these reports in his December chapter.

My personal plan is to take either the Fulfilled Inventory or Monthly Inventory History report and copy the data into an Excel Spreadsheet and insert a “Buy Cost” column in it.  Then I’ll get all of my buy costs from InventoryLab and manually input them into the spreadsheet to get the total purchase price of my unsold inventory.

I’ll compare that number to the Dec 31 balance in my Inventory Asset account in QuickBooks.  If the numbers don’t match, then I’ll figure out why and make corrections.

 Payment Summary Report
This is my favorite Amazon report as it shows you your total sales income, amazon fees, transfers to your bank account and how much in sales tax that you collected.  I run this every month but in this case, I’ll run it for the full year.

To run the report, go to Payments -> Date Range Reports.  Then generate a summary report using the custom date range of January 1, 2015 to December 31, 2015.

Since I want to be sure that I capture all of my December 2015 activity, I’ll run this report in January 2016.

I save all of my year-end reports in a directory on my computer called “2015 Year-End Reports.”  This makes finding my year-end information fast and easy.

When Do You Need to Run Your Reports?
You don’t need to stay home on New Years Eve and run your reports at midnight (though that’s what I’ll probably do).  Amazon allows you to select date ranges for most reports so don’t worry if you have more fun things to do that night.

The Fulfilled Inventory Report is a little different though as it doesn’t allow you to select a custom date range.  If you go to that report page, you’ll see a list of dates and times to choose from:

For this report, I want a time close to midnight on Dec 31.

For this report, I want a time close to midnight on Dec 31.

Since it appears that my reports are generated at random times, I’ll go to this page around midnight (if I’m still awake) and generate a new report.  If I’m asleep, I’ll just use the report that was generated the closest to midnight.

Setup a Meeting with My CPA
For me, this was easy because I didn’t have to do anything.  I already have a CPA that has done my taxes since 1999 and his office already sent me a note with my scheduled meeting date and time.

For those of you that don’t have a CPA and want to use one, then I suggest that you start searching for one right away.

Finish December Financials
I do my bookkeeping monthly and at this point, I only have to finish up my December entries.  I’ll be doing this in January and will:

  • Manually add in my Amazon Sales Income and Fees into QuickBooks
  • Get my Cost of Goods Sold amount from InventoryLab and enter this into QuickBooks
  • Make sure that all of my bank and credit card registers are up to date
  • Complete all of my sales tax returns that are due in January

Dec 2016 Update: You can also get your COGS amount from Caleb Roth’s Tracking Spreadsheet.

Review & Verify 2015 Financials
I like to start with running my Profit and Loss statement for the year as I’m always curious to know if I made or lost money.

As a side note, when I first started this blog (and started selling on Amazon), I shared my income reports.  I no longer do so but please check this income report post if you’re curious to see how my Profit and Loss Statement is formatted in QuickBooks.

Since it’s year-end, I’m going to click on every income and expense category and verify that all income and expenses have been categorized properly.  For example, I want to make sure that my “Education” category shows my Amazon Boot Camp purchase but does not show my BQool subscription fee.

Incomes And Expenses Files On Laptop Showing Earnings

Next, I’ll run a Balance Sheet and for me, it’s important that I have more assets (cash and inventory) than liabilities (debt).

Again, I no longer share my current numbers but you may check out my Balance Sheet post to see how my Balance Sheet is formatted in QuickBooks.  Back then, I was upside down but I’ve turned that around today.

But as for taxes, my accountant always looks at my Balance Sheet and wants me to prove all of the amounts listed.  For example, if my December 31 Balance Sheet shows that I have $2000 in savings on December 31, then I better have an actual bank statement that shows on ending balance of $2000.

Therefore, I’ll gather up my bank and credit card statements and make sure that the amounts match.

To be honest, I don’t anticipate spending much time on this part because I review my financials monthly so most of the work has already been done.

Stay Organized
My CPA is not my bookkeeper and he is not my data entry clerk.  Therefore, I’m not going to hand him a shoe box full of  inventory receipts and unorganized papers and tell him to sort it out and figure it out.

I do as much front-end work as possible before meeting with him.  I’ll have my 2015 financials completed and reviewed.  I’ll have copies of all of my year-ending statements.  I’ll have my mileage report.  Everything that I give him will be neat and organized.

Also, I’m not planning on bringing him my inventory receipts.  He doesn’t care to see every Walmart and Target receipt.  However, if asked, I know where they are stored and I can email him a copy within minutes.

Get Training or Hire a Bookkeeper if You’re Overwhelmed
I have always been organized with my paperwork but I can’t say the same about my husband.  I know that if he were to start an Amazon FBA business (without me), he would hire a bookkeeper to help him.

For those that are more like my husband, I recommend finding all of your statements and receipts and organizing them by month.  Then go out and find a bookkeeper to help you out.

Another option is to get training.  You may find local training or online training.  I recently saw in the Accounting We Will Go Facebook group that there is a QuickBooks training course coming up soon.

For those that want to use GoDaddy, Jessica Larrew has a GoDaddy tutorial that I reviewed in this blog post.

Meeting with CPA & How Much Does it Cost?
My appointment is in February and during our meeting, we’ll review all of the paperwork that I’m bringing him and he’ll ask me about my plans for 2016 and give me advice.  His office will then do the tax return.  Once that’s done, he’ll call me and also send a followup letter with any additional advice that he has for me.

Last year, I paid him $340.00 to do my tax return.  I don’t know if this is high or low, but it’ll give you a comparison number.  Keep in mind, I’m not paying him or his office to do bookkeeping or to sort through a years worth of receipts.

Good Luck!
I’m not saying my system is the “right” system but it’s what works for me.  We all use different systems to track our business and have different levels of expertise.

In closing, I wish each of you the best of luck with getting your system and taxes going.  Also, as always, feel free to ask me any questions in the comment form below or on Facebook.

{ 6 comments… add one }
  • Jacob I. Oberlander, CPA January 1, 2016, 4:22 am

    Doesn’t InventoryLab provide you with option for year-end inventory value?

    • Diana January 1, 2016, 4:20 pm

      Yes, you can run the Inventory Valuation report.

      I’m still going to run the Amazon report and confirm that the numbers match. I have had a few “hiccups” in which numbers between IL and Amazon didn’t sync properly. For example, I had a months worth of inbound shipping expenses that were not transferred from Amazon to InventoryLab.


  • Ree Klein January 8, 2016, 6:18 am

    Hi Diana,

    I love how organized you are! I have a binder system I use to house all my receipts but I sometimes wait a few months before doing the hard work of inputting the information into Quickbooks (I dread when I let it go for so long!). I have a tab for each month with a plastic paper sheath behind each tab to hold the receipts.

    I have one business checking, one business savings and a business credit card. All income and expenses go through those accounts. When I go to balance each account, I make sure I have a receipt to tie out to each statement entry. Once I’ve reconciled the accounts, I staple all the receipts to the applicable statement, three-hole punch the batch and stick it behind the appropriate month’s tab. That way I always know I can find the receipts.

    I do my own taxes using TurboTax. I had someone do it for me the first year in business, but when I realized that I did all the work for them I never went back. I used that tax return to guide me the following year. It’s a little scary to tackle but it’s worth it to me.

    This was a really great post and it highlights how important good record keeping is and being timely on pulling your year-end reports. I can’t wait to read more about your success in 2016! Cheers, Ree

    • Diana January 9, 2016, 2:24 pm


      You are very organized too and our systems are very similar.

      With Quickbooks, I do use the automatic syncing for my checking, savings and credit cards. It saves time from inputting your receipts, but you still have to review that your transactions were assigned to the correct categories. Sometimes it does have hiccups so sometimes I find it just as easy to enter transactions manually.

      For the past two years, I’ve been trying to go paperless. I kept all of my personal & business receipts and statements together since 1990 or so and then I was dealing with a lot of paper taking up space at home. I recently subscribed to a free trial of ShoeBoxed to have my receipts scanned in and hopefully that’ll help. I do have a scanner, but I am months behind in scanning.

      If I didn’t already have an accountant, I would use TurboTax too as I used that to do my mother’s taxes. But for now, it’s just easier to hand him my reports rather than doing it myself.

      Thanks for stopping by and I’m also looking forward to hearing about your success in 2016!


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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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