Recording Amazon Sales in QuickBooks Online | Multiple Methods
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- čas přidán 24. 07. 2024
- Recording Amazon sales in QuickBooks Online is important to understand for Amazon sellers.
In this video, we explain:
👉 The three methods you can use, starting with the easiest method
In this video, we explain:
👉 The pros and cons of each
In this video, we explain:
👉 It provides you with a road map so you can record your Amazon sales like a guru in no time.
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Thank you! This is exactly what I was looking for...I'm a new FBA sellers...only a few months and about $20k in sales but i want to get a handle on my numbers now and get them out of a spreadsheet before it get out of hand and my business grows. Your explanations were clear and very helpful.
I'm a seasoned accountant (and CPA), but I have not done much e-commerce accounting. This is super helpful! Thank you!
You're so welcome! We really want to help accountants and ecommerce business owners better understand the complexities of ecommerce accounting.
Watched the video a few times and today we changed from single-sale entries to this summary journal method. Made a huge change to time previously wasted on understanding and capturing each single entry. The results now are so much easier to match. Thank you for posting this video which has freed up so much time we now use for analysing our real business.
Glad it was helpful!
Thank You so much for creating this awesome video. I love it because you show the different options and the whys. I really appreciate you taking the time to prepare the PowerPoint and organize it so well. Since I'm a new Amazon seller I will use the simple method but I will keep your video for next year when my sales reach better numbers. Thanks again.
Hi, I really don't understand how the cash method fit the tax return purpose, I think this is not true, because the settlement received from Amazon beginning of January overlaps between two years
Great work! Thanks for sharing your expertise with the world.
Thank You for Taking The Time to do this.. Your a Great teacher too btw.. explained this perfectly
Thanks!
Hello and thank you for posting this helpful video, I sincerly appreciate it.
This video is fantastic. Looking forward to watching your other videos.
Glad you enjoyed it!
I love all your content. Thank you!
So glad!
Thank you for the great video. Question, so if you I will use this method, what will you do with the those deposit from amazon showed on your bank feeds, Exclude them?
Excellent video!
Thank you very much for your hard work.
Thank you. I'm glad it was helpful for you.
Found your post interesting to watch. I can't wait to see your new videos soon. Good Luck with the upcoming update. This CZcams channel is very informative and effective.
Thank you so much!
Other than that, you explained this the best so far. Nice work ;)
Glad you think so! And thank you.
Very informative and might have swayed me to go with Quickbooks as my accounting software for my Amazon business which Im about to start. I've liked and subscribed. Thank You
Glad it was helpful!
Thanks very much for making this video. You go into a great deal of useful working useful information.
Glad it was helpful!
thank you so much, great video
Thank You... very insightful info
Glad you enjoyed it!
Great content... thank you!
You're so welcome!
Do I need to record the sales tax collected by Amazon on our behalf in QBO?
Thank you.
Thank you for the information
You're very welcome
Thank you so much
Thanks Britney 🙏🙂
Thank you for this video! I just started my Amazon business last year and I am having my books cleaned up through QBO (I filed an extension for my taxes). I have been entering all the data manually since I just started QBO. So it would make more sense to me at this point just to use the first method just for tax purposes. My question is, if I just enter my cash deposit as income, will that tie up with the 1099 that I received from Amazon?
Great question! Probably not. We just did a video explaining this very thing and what to do about it - czcams.com/video/IWa4KZlATh8/video.html, or you can read our blog on it - ledgergurus.com/your-amazon-1099-vs-your-financial-statement-activity/.
And good luck with the cleanup. That doesn't sound like much fun!
HI Brittany. Thanks for doing these videos. I have a QUESTION. I am 6 months in with AZ selling FBA. I have my sales bi-monthly statements and putting the info each as a journal entry. The first 2 statements end with a NEGATIVE number that Amazon carried over to the next statement as a NEGATIVE beginning balance on the subsequent statement. For example, May 21 ending balance is -10.44 and the beginning balance for June 4 is -10.44. Ending balance for June 4th is -85.28 so, the following statement beginning balance is -85.28. Therefore, the QB journal entries do NOT balance and I am getting an error message from QB. Any suggestions on how to handle this situation? And, how to handle these Beginning Balances with the COA? TIA!
I would use an Amazon clearing account as the plug when it doesn't balance. That account should go up and down but never get too big in either direction. I would honestly suggest setting up A2X as it would make all this much easier because the journal entry approach will only ever get you close but create some confusion and pain like you are experiencing. A2X starts with a low price point of $20 / month.
Do you have a video that teaches how to set up the chart of accounts in QuickBooks for Amazon, Shopify, eBay ,Walmart and Facebook for use with a to A2X. They told me I needed to do that before I connected my QuickBooks and I have no idea how to begin.
We don't have a video for that currently but thank for a good content idea. We will put t hat on our content map and please let us know if you have any other ideas. Also we have a project that will set up QBO and A2X for you including setting up your chart of account and teaching you how to use the tools if you are interested in going that route instead.
Also having this issue!
@@audrigivens171 Yes we do! Please go to our channel and you'll find one that specifically talk about chart of accounts setup.
Hi there, shouldnt you create a sales invoice and credit notes and do the bookkeeping there for the amazon statement? Else this will not appear in the VAT / Sales tax report if using journal entries only.
We aren't paying or tracking through the QBO sale tax center. We typically use sales tax tools like Taxjar, Taxify, or Avalara to process our clients returns rather then the sales tax tracking feature in QBO, so we are only interested in the liability being correct on the balance sheet. Otherwise, yes we would need to use invoices of sales receipts to get the sales tax tracked correctly through the sales tax center in QBO.
Great video. Why was it dated 4/2021 for 4/2020 info? Also, I assume you recommend starting out a2x from the get go as a new business selling for the first time, right?
Jake, we were using a QBO sandbox account for this video (example data, not real client data), so we must have entered some financial data in the future and therefore some of the dates were in 2021 :)
Starting out with A2X will definitely help you get accurate and detailed financial info from the start and build a strong foundation of accounting for businesses that grow rapidly. For small sellers who don't won't to pay for A2X, they can get away with this for some time before things get too complicated. If you haven't already seen our video on A2X, here it is: czcams.com/video/NEVrsDhHSJI/video.html
Thank you so much. So you have idea what to do with the reserves?
The reserve account should be set up as a current asset account and adjusted each month to what is reported on Amazon.
Thank you for the video. What do you do if you download the sales report and the debits do not equal the credits on the report? debits = 13796.81 and credits = 13643.86? We put it in a spreadsheet too and same thing is happening.
If you are not taking a more in-depth approach there will always be minor discrepancies, we recommend making an adjustment journal entry.
For first method :
Will deposit from January due to account reserve level from December from last year effecting income for this year?
And as well as December will not receive full payment due to reserve?
Good day...how do I apply payments to the invoiced items sold? Do I just apply the full invoice amount as a payment, even though they have taken off shipping etc before payment of that invoice?
We will be publishing a video covering exactly this in the next week or so, so check back to watch that.
We are using quickbooks to keep track of inventory. Amazon sales is only a small part of our sales. Currently, we are basically using version 1 to keep track of money coming in but what would I need to do to account for the inventory changes in quickbooks correctly? Thank you.
We have a couple resources about accounting with inventory:
- How to Account for Inventory for eCommerce Businesses - ledgergurus.com/how-to-account-for-inventory-for-ecommerce-businesses/
- Accounting for Inventory Purchases | eCommerce Accounting - ledgergurus.com/accounting-for-inventory-purchases-ecommerce-accounting/
- How to Record Amazon Sales in QuickBooks Online - ledgergurus.com/how-to-record-amazon-sales-in-quickbooks-online/
Hi I am newbie to this I have some questions how to record these by add all this up or record separately (amazon fees contain these: referral fee, fba pick & pack fee, coupon redemption fee, fba inventory storage fee) and when I record jl this would be credits?, not sure is CR or DR on shipping chargeback, cost adv (early review program)product tax? and last how to record on jl previous reserve amt balance? current reserve amt? Thank you
Hi Jasmine, this really depends on the level of information you are interested in having for the decisions you are making as a business owner. You can lump some fees together into "seller fees" or separate everything out. In general, any expenses are recorded and debits and any income items are recorded as credits. The reserve amount acts as an asset...if its going up it will be debited and down it will be credited.
Great video! I watched it twice. My only question is by going the journal entry route, what do you do with the Amazon deposits once they hit your account? Do you more or less put them in their own category and hide them from reports as the journals are really replacing them?
I would create an amazon clearing account and clear deposits against that clearing account when the deposits hit your bank account.
The journal entries should give you the option to match the deposits hitting the Bank accounts. If qb is not recognizing the match then either “find match” in the bank feed or exclude the deposit entirely.
Thank you so much for this! This is video was a fantastic explanation of journaling the Amazon statements. I have a couple of questions:
How would I enter the beginning balance entry in the journal?
When the statement is a charge to the credit card do I just replace the checking account with the credit card on the last line?
Yes, to the credit card part of the question. I'm not sure what you mean in your first question. What beginning balance are you trying to enter?
@@LedgerGurus Thanks for the quick reply! Sometimes the statement shows the balance from the previous statement. It was throwing me for a loop but then I realized I should just leave it out. :)
@@ourprojectideas8082 Sounds like a good plan. :)
Do you know where I can find that report for the statement view? I think that Amazon change a little bit.
The new reports can be found under Reports>Payments>Statement View
The only reports I am able to generate are in excel. I don't see the nice, clean and approachable pdf that you got two years ago. Is there a new way of obtaining the clean report without a messy spreadsheet on seller central?
It starts as a spreadsheet. To learn how to read it, watch this: czcams.com/video/n7xfob7ICPE/video.html
Hello, what a great way to understand the general idea! Thank You so much! I am a beginner and just got QBO to start recording and catching up from 2022, this info was so valuable! I categorized the 2022 amazon bank deposits as Sales Income. Now if i want to create 1 Journal Entry for the whole 2022: revenue (total income from amazon-net sales) and total expenses (from amazon fees etc), wouldn't that create a Double Income Entry?(desosits plus net sales from amazon). I want to go off the Date Range Summary Report for the whole 2022
We recommend putting all the deposit in a holding account and as you recognize revenue you move that amount out of holding.
@@LedgerGurus thank You so much for replying! Could you please please explain in a little bit easier way, what the holding account should be under the chart of accounts? How to recognize the revenue & how to move the amount out of holding? I am very new at this, been struggling for a month & any help is much appreciated! You are so great at explaining things! Its the best content on youtube for amazon fba!
@@GG-ft8zp I would have all the deposit go in to a revenue holding account, then when you make journal entries, you will debit the holding account and credit revenue.
Ive made a few product inventory purchases with my personal credit card how do I enter those into quickbooks?
debit inventory, credit equity investment.
Whats the difference between using the amazon statments, and just using the monthly summary report? Is the summary report not simpler since you can generate a clean month by month report, instead of statments which have weird ending dates Ie: dec 15 - jan 15? Does this work for cash accounting?
The statements allow you to more easily reconcile against what actually deposited, since the reporting time frame matches the deposit time frame. The monthly statements would be a great way to up-level to period ends but the reconciliation will be trickier.
@@LedgerGurus Can you not just manually request for payment on the final day of the month to avoid it crossing over?
Schedule C asks for COGS...How do you deal with the IRS If you do not track inventory and COGS?
Most people default to expensing inventory right away through COGS if they don't have a better system in place. Sometimes tax accountants will recommend approximating a year-end count on inventory value and then correcting COGS for the year that way. Your tax accountant should be able to give you more specific direction.
We need your help, too. We are in the process of creating a course to help ecommerce business owners make sure they are doing sales tax accurately and efficiently. We have a pretty good idea of what this course needs to cover, but we're doing some interviews to get super clear on what people like you want and need. Would you be open to hopping on a quick call/Zoom call so I can ask you a few questions?
Thank you
You're welcome
Hi , what would you recommend if i want to track the sales and expenses of each item for better decision making. For example, a skin care business .
Are you talking about tracking cost of goods sold? We have a bunch of content on that. Here are a few to start with:
- Understanding Inventory and Cost of Goods Sold (COGS) for Amazon Sellers: czcams.com/video/cvS5fPHUVJg/video.html&pp=gAQBiAQB
- COGS Explained for eCommerce Sellers: czcams.com/video/DXV4q9vqRMg/video.htmlsi=PN-ba3xBM7aHPKyr
- How to Create a Journal Entry for Cost of Goods Sold in QuickBooks Online: czcams.com/video/g6sh9iXblUQ/video.html
And here's one to track sales: Amazon Accounting Software A2X | The whys and the hows: czcams.com/video/NEVrsDhHSJI/video.htmlsi=QQ9xusOH2e0MrVAU
on Xero the journal needs to balance to 0 is it worth moving to quick books to follow your second method?
Debits and credits equaling each other in a journal entry is a requirement for any accounting software.
Do we still
Need A2X or other software if Amazon is able to connect directly with Quickbooks now?
We still recommend A2X unless quickbooks can directly pull summarized sales data from Amazon instead of every single transaction.
Hello, how are you recording COGS in QBO?
Hi Moz, here is our video on recording COGS: czcams.com/video/cvS5fPHUVJg/video.html. If you still have questions, don't hesitate to reach out!
If we use the first method, what do we do with COGS in schedule C?
You always have the option of expensing cogs right away and then truing up at year end for taxes by backing out COGS not sold if you are trying to keep it simple. COGS, and the ways to handle it, is way beyond the scope of this particular comment. We have a couple videos already created for inventory and COGS on our channel and we will have a couple more coming out in the next several weeks.
HI! Super helpful but how do I include reserves?
If you use A2X, it will take care of it for you. If not, it's a fairly in depth and complex process. To learn more about A2X and how it can help with ecommerce accounting, click here: czcams.com/video/NXFf3AqrtCk/video.html
Our issue is that our bank deposit payments from stripe and paypal are every other day, so 'matching' journal entries with deposits is not possible. We had $330,000 in revenues last year and likely $500,000 this year and still feel we are stuck with the first method that you discussed. The alternative is that Stripe and PayPal hold our cash for a week or bi-weekly, however we would rather get our cash right away.
Code all the deposits to a holding account when they hit. Create one journal entry at month-end to reconcile all the payments that month against the activity of the channel they came from.
@@LedgerGurus I am glad that will work to .... that is how I was going to work around that .... brilliant thanks!
If I am pulling up my 2023 now, can I put the data for 2023 for the whole year from one report rather then entering each deposit I had every 2 weeks separately? (for 2024 I will do it differently for sure, but it does make sense to simplify it for the year that has already ended, doesn't it?) Thank you in advance for the answer!
You can do it that way. You'll lose a lot of visibility if you do, but you can if all you want is to make it simple.
Can I have eBay connect to Quickbooks as well as Amazon? How would you do that? Would you need two company files or just one? Two chart of accounts or just one?
You should not directly connect QBO with any channel. We recommend you always summarize channel data into QBO. You don’t need two company files or two chart of accounts. You can separate channel activity by either having different income accounts or by using class tracking.
@@LedgerGurus
1. When you say connecting directly to a channel, how are you defining that? Does that mean downloading an Amazon or eBay app that will interface between QBO and Amazon (or eBay)?
2. Why do you recommend not connecting QBO directly to any channel?
3. When you summarize channel data into QBO, in general how do you do that?
4. When you summarize channel data into QBO, does that mean you will not have transaction level detail?
Good questions. When we say connecting directly to a channel, we're talking about the type of connection that pushes in every sales order. This creates a mess of tons of data. Apps that interface and summarize the data into QBO are excellent and we highly recommend them.
You don't want transaction level data in QBO because QBO can't handle that volume of transactions without bogging down, it is not scalable to try to reconcile every transaction into QBO against what has deposited, and QBO should be company level information around financial performance rather than a duplication of all other data that originates somewhere else. We like A2X or Webgility for summarizing into QBO. Here's our video on A2X: czcams.com/video/NEVrsDhHSJI/video.html
@@LedgerGurus Thank you. I will take a look at the link you provided. I should have mentioned that I am thinking about starting an eCommerce business from home. I hope to have a substantial number of sales, but for any given month, even years from now, I would think that QB should still be able to handle all the transaction level data. I can't imagine that it would really be too much for QB to handle. This would be a one person business. At a previous job, working for a small business, we used QB. As far as I know we entered transaction level data, e.g. line item charges under any given invoice. The reason I wanted transaction level data was so I can look into the details if there is every a need for it. I try to avoid grouping things together out of convenience because in the long run this causes trouble. I say this because eventually you will need to work with transaction level data for reconciliations and other things. I'm willing to put in more effort now in exchange for preventing many bigger headaches in the long run. So this would be a one person business. I don't know if that changes anything. Just to be sure, how are you defining transaction level data? Can you give some examples?
@@LedgerGurus At 18:27 you show a back end report from Amazon.
1. Is this what you would work with if you were directly connected to a channel?
2. Of all the back end reports, which ones do you need?
3. I can't find any samples of back end reports. Do you know where I can find any?
4. If a person were working with these back end reports, is it true to say they will need to find a way to extract all the data and then upload that data into QB?
Do you have anything (system) for Recording with Walmart???
Not yet. We typically do videos highlighting Shopify or Amazon, but thank you for the suggestion. We'll see what we can do. :)
@@LedgerGurus yes hopefully one day we will see that one since it’s becoming popular as well 😁
@@CrissyMac A2X now handles Walmart reporting as well!
@@LedgerGurus that’s awesome do you have any information on that?
Is this video applies to Amazon sellers selling in Canadian market place.
Yes!
@@LedgerGurus do you provide accounting services fro sellers from Amazon Canada, located in Quebec.
@@satishmaddula We do if your Quickbooks is a US Quickbooks using USD as your primary currency. If not, we recommend reaching out to AIS Solutions.
Hi how do we record the beginning balance and account level
Hi Mary, can you give us more details on your question? Thank you!
@@LedgerGurus Hello, in my payment dashboard i have beginning balance and account level reserve , how do we record that in Journal entry and what account detail and classification. Its included in settlement report in Canada .thanks
@@maryjanehernandez7374 The beginning reserve balance should be recorded as a current asset on your balance sheet with a journal entry as well as the beginning balance. They both represent money that Amazon is holding that belongs to you and will eventually be paid out, like an Accounts Receivable.
Couldn't pull that report. Has it changed?
I'm sorry it took so long to answer your question. I wanted to make sure we answered it correctly.
Yes---the report does look a little different than what is shown in the video, but it contains the same information. It might be preferable to click the "Print Statement" in the bottom right corner. This view may be more helpful to create the journal entry, but the information will be the same in either view.
How/what do you charge your average e-commerce client?
Hi Brian, it varies quite a bit depending on the number of sales channels, payment processors, and desired services (bookkeeping, sales tax, inventory and COGS, etc.). If you are interested in getting a quote, you can contact us here: ledgergurus.com/ecommerce-accountant/ecommerce-accounting-contact/
Thanks!
I track COGS this way:
I first calculate my cost avg by sum the total dollar $ spent on inventory, then divide this by the total individual amount of individual items bought during the year. Example: $100k / 10000 items, = each item $10. I track this using FIFO on an annual basis.
I then caculate my total individual items sold by caculculating the total # of indivdual amazon orders + disposals - refunds. I then multiply this # by the cost avg of $10 to determine my COGS.
This is the simplest method ive found after selling on amazon for 6 years now. Its not accurate, but id say its >90% accurate. Why is it not accurate? Many of the items I buy from suppliers never arrive, are lost, refunded or disposed. Some of the items I then send to FBA are lost via shipping or by amazon FBA. Many refunds for orders are never actually returned to inventory, and or are concession refunds. Many FBA removals done by me are eventually disposed of by me personally.
Ive learned over time trying to track all these anomlies is not worth the time and becomes an absolute hellscape in complexity. Im just worried about the eventually build up of inacuracies over time. Say my caculations has 100 items slip through the cracks yearly. In 5 years this snowballs.
This is a great approach when trying to keep things simple without spending lots of time and still getting a fairly accurate approach. You will be able to true up any anomalies by doing a periodic count of actual inventory and then truing up your COGS and ending inventory against that count. You would count all the inventory you have on hand and then correct your ending inventory balance to that number with the other part of the adjustment going against COGS. If you are allocating $10/unit and your count shows that you have 100 units left, then you adjust ending inventory balance on your balance sheet to $1,000. If these adjustments get bigger and bigger it may mean that a lot more is getting lost than you realize, and it may be time to look at maturing your process. But this method can take you pretty far.
i dont understand why amazon fees are not part of cost of good sold It seems as though they a direct cost of selling my product
They can be if you choose to. You can set up COGS to include whatever makes sense to you. We don't group them into COGS because our clients like to see that fee outside of COGS typically.
Thank you
You're welcome