I input my Amazon data at the conclusion of the Amazon payment cycle. I start the process by going to Payments > Statement View. This report shows the amount Amazon deposited into my account.
For example, in the sample period between January 7 to January 21, my Amazon account generated $583.57 in sales. After the company took off their fees, my total deposit came out to $405.19. This is the amount that Amazon transmitted to my checking account.
Please note: I'm using this time range because it features a reimbursement. I want to show an example that involves reimbursements because these are all too common.
My QuickBooks setup automatically synchronizes with my business checking account. I have the Amazon payout categorized as FBA Sales Income.
Working with Your Transaction Report
The big problem is when you load up the summary view report, you don't get a breakdown of the fees that are taken off your total sales.
Some people don't have a problem with this. They like collating or aggregating all their fees into a single category. Many people would label this "Amazon Fees." These individuals like catchall categories.
Other people, myself included, would like a breakdown of every single fee that goes into the Amazon FBA system. Why? Well, I want to know each individual fee that went into order handling and picking and packing fees. The reason why I'm curious about this is that I want to make better decisions regarding products.
Generally speaking, though, I kind of prefer the middle of the road approach. Accordingly, at the minimum, I track the following information:
- Inbound Shipping Fees
- Inventory Placement Fees
- Storage Fees
- Monthly Professional Seller Fees
- Return Fees
- Amazon FBA fees
Amazon FBA, of course, covers handling, picking out a product and packing it, referral fees, and weight handling of each sale.
Every time I get hit by a new fee, I have to decide if I want to track it separately or just add it to a greater Amazon FBA aggregate fee.
By using the transaction view report, I get to calculate these different fees. For example, if you are curious about your inbound shipping fees, you can get this information by filtering "service fees" and then manually summing up the figures listed under "inbound transportation charges."
Amazon QuickBooks Spreadsheet
Although I'm able to get these identical numbers using an Excel spreadsheet, I prefer summing up these fees using Seller Central.
In addition, when I use the transaction view report, I also locate the amount of the sales tax I have collected. I then print out the statement view report to see if there is any number in the "other" column. Generally, this is zero.
I would click on the "total" column, and I will see a sales tax amount. I write this amount on the hard printout which I will then add up using Excel in the following step.
I verify the deposit and sales amounts to match them with the figures reported by the statement view report at Amazon Seller Central to make sure that I am doing the numbers correctly.
I line up the sum of the professional fee, storage fee, inventory placement, and inbound shipping with the sum reported when I click on Selling Fees > FBA listed on my statement view report. In this example, the total fees are $47.23.
My $22.89 reimbursement appears on my statement view report, located in the tab Other Transactions>Other.
Amazon QuickBooks Manual Input
Once I've gotten all this information, it's time to take the next step: entering Amazon data into QuickBooks. This part is the most straightforward part. You only need to access the Amazon liability register to input your data.
This can with just a single entry. You can also choose to itemize and break down the entry between the fees that you owe and the sum Amazon owes you, like reimbursements, taxes, and sales amount.
I then input the amount for reimbursements, taxes, and sales.
After completion, whatever number shows up in red indicates the amount of money Amazon would have deposited to my checking account. I have to reverse this because if not, QuickBooks is going to indicate an excess of FBA sales for that same amount.
Process Your Profit and Loss Statement
Once you have entered this information into your QuickBooks Online account, all the numbers you need to generate a profit and loss statement will be available to you. Just make sure that your QuickBooks data figures match whatever figures you have on your spreadsheet.
Please note: your sales tax is not going to be in your profit and loss statement. How come? It's neither an expense nor an income.
You have to account for this by using the payable account dedicated to sales tax. This indicates how much sales tax your Amazon seller account paid out after collection.
It's also important to note that my COGS figure will not appear because you must enter COGS manually on the last day of the month.
How to Deal with Split Months
In our example, Amazon's pay period ran from January 7 to January 21. This is a convenient example because the pay period all took place in the same month.
What if the pay period is divided into two separate months? The best way to deal with this is to use the accrual method. You use the same process above, but you cut up your entries between months.
In the case of a payment period taking place between January 21 to February 4, you would have to divide the fees and sales the following way:
- January 21 to January 31
- February 1 to February 4
When accounting for these figures, I log the numbers for January using the date January 31. For the February data, I use the date of February 4.
If you find any of this tough, confusing, or uncomfortable, you might want to use taxomate which allows you to automatically send your financial data to QBO. Manually inputting your Amazon Seller information is not always easy and can take you away from the more important aspects of running your business. Below you will learn how to easily use QuickBooks Amazon together.
Disclaimer: The above information is made available on a good faith basis and is intended only for general education. The article is not to advise on tax or legal issues. We recommend getting in touch with a duly certified tax professional or CPA to assist with any topics raised by this article.