Bookkeeping for Amazon Sellers – Meru Accounting

Amazon, as we all know, is an e-commerce platform that enables third-party sellers to sell either new or used products at a fixed price online. Amazon is one of the most popular choices for starting a new business. So much so that some 100,000+ new Amazon businesses open their doors each year. Of course, not all of those businesses survive, and one of the primary reasons for that is poor bookkeeping and accounting for Amazon

Why bookkeeping is essential for Amazon sellers

While we think of an Amazon sellers’ business, bookkeeping and accounting are some of the last things that strike our mind. While bookkeeping might not be the most exciting subject, it is crucial to help Amazon sellers understand where their business stands as far as finances are concerned. Understanding your FBA business numbers will allow you to grow your business and help you make wise decisions by helping you see what is working and capitalizing on trends.

Cash Flow Management

The foundation of a successful small business as an Amazon seller is its seller’s bookkeeping. Proper accounting systems in place will ensure that your cash inflows and outflows are appropriately done, especially if it’s still a startup.

Better Business Decisions

Accounting and bookkeeping for Amazon also help to extrapolate vital information to make informed decisions. Important information from this accounting data will allow you to acquire customers, analyze sales, inventory management, and operating expenses.

Understanding Tax Complexities

If regular bookkeeping is in place for your seller’s account, then these records will make tax season a lot more manageable for you. It will also help you unfold complexities related to taxes and help you muster tax benefits.

Further financing

In order to expand your business, if you ever require a loan, you’ll need to provide the creditor or the bank with various financial information. This is easy to do if your books are accurate and up-to-date. Systematic bookkeeping eases the financial reporting, which would’ve been a tedious task if not done regularly.

Product Management

Bookkeeping not only serves as a checker for the financial health of your online seller business but it also gives product insights through sales data. It becomes straightforward for the seller to identify which product sales are highest and which product sales are down. It can help you answer questions like, which products should I axe? Which should I double down on? How much inventory you should order etc.

Bookkeeping in E commerce Industry

Starting an E-commerce venture and opening an e-commerce store is an exciting progression for any entrepreneur. With an online shop, your products are available day and night, year-round, to an international array of customers and because of that e-Commerce businesses have the potential to grow very quickly, the result of which many small and medium sized sellers have made a chunk of money. However, it is a very popular fact that E-commerce businesses see an initial flourish but gradually their profit margin starts declining. One of the prominent reasons for this high burn is poor accounting activities by online sellers.

It is a common myth that starting an ecommerce business on Amazon, Shopify, or a similar selling channel, you only need to focus on ordering inventory, managing inventory, shipping, driving traffic to your products, branding, etc. This is where many E commerce entrepreneurs and amazon sellers miss the hack “Accounting for your business”

Accounting In E-commerce

Accounting is a painful necessity. It’s the boring side of the business. But, if you want your business to grow, you can’t avoid it. As a business owner, you will need to maintain an up-to-date view of your finances at all times. When you have a clear picture of what your money is doing, you can get a better handle on your business spending. This allows you to develop and consistently improve your profit margin. Financial statements offer an organized view of this information.

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