A growing number of Amazon sellers turn to QuickBooks in order to ensure a high level of bookkeeping for their e-commerce transactions and keep track of various sales-related data in one place.
While QuickBooks itself does not have a direct integration with Amazon, its marketplace is home to some great third-party apps, such as Synder, which allows you to automatically bring e-commerce data into QuickBooks. With all the important information brought in, you have everything ready to generate necessary financial reports, prepare for the tax season, and get an overall picture of your business health.
There are many difficulties that Amazon sellers encounter in terms of sales and fulfilment, and then there are those that come up in bookkeeping for Amazon data. One of them is that when Amazon makes a deposit into your bank account, that deposit represents the net amount of your sales. But for correct accounting and accurate IRS reports you have to record the total gross sale value in your books. That gross amount represents how much you actually received from your customer, how much you paid Amazon in various fees, any additional costs your buyers bore such as shipping and gift wrapping, and any credits you received back from Amazon. Sales tax and refunds are also a crucial part of this process and need to be recorded accordingly.
Keep reading in order to learn about best practices you can employ in order to capture the necessary data and improve your Amazon and QuickBooks experience.
1. Entering Amazon sales into QuickBooks
In order to ensure that no transaction is missed, you can connect your Amazon store to QuickBooks using Synder – a thorough e-commerce integration designed to serve businesses with many online transactions. Synder is a major, 1000+ five star QuickBooks integration that doesn’t require a credit card to start a free trial, and you can test how it works before subscribing to a plan.
With your Amazon connected, you will start seeing all sales transactions, including transaction fees, other fees (such as FBA shipping or advertisement), refunds, and other necessary data (such as taxes and credits) going directly into your QuickBooks account.
Amazon 1099 bookkeeping
If you meet the minimum criteria (over $20,000 in gross payment volume and more than 200 transactions a year, some state additional criteria apply) Amazon will submit your 1099 form to the IRS. The revenue figures on that report will be unadjusted gross sales that include:
- Product sales
- Sales tax collected
- Various Amazon charges to buyers (gift wrap services, shipping concessions, even if you didn’t receive them)
- Promo rebates
That’s why when you are doing bookkeeping for Amazon sales, it’s so important to record everything that makes up a transaction, and not just the deposit amount you received in your bank. The revenue you report to the IRS should match the 1099 Amazon figures.
Amazon sales in multiple currencies
Another difficulty is that many Amazon sellers accept payments in various currencies.This integration will allow you to correctly parse all multicurrency data.
Keeping the customer information
Some Amazon businesses will want to keep information about their customers for future marketing purposes and detailed reports. Unless you don’t need that data, in which case you can enable a default customer name in Synder, you can have all that data stored in your QuickBooks for advanced business insights.
Learn how to connect your Amazon store to QuickBooks via Synder.
Have you connected Amazon to QuickBooks via Synder? Learn everything about the sync process in the video below:
2. Keeping track of Amazon seller fees to make sure you can claim necessary deductions
You have seen that in order to comply with the Amazon 1099 form, it’s important to record not just the net income amount, but everything that will be considered an unadjusted total income.
When it comes to expenses, it’s a business owner’s responsibility to track all business expenses, which can later be deducted in order to avoid overpaying the taxes. In order to keep your books in great shape for the tax day it’s important to distinguish between the net sales and the multiple fees that you end up paying to Amazon.
The good news is that you don’t have to manually enter any of those fees, as Synder will create an expense for Amazon selling fees, FBA fees, advertising fees, and any other Amazon adjustments and expenses.
At the end of the year, you can access reports containing all Amazon seller fees. You can report them as business expenses on your tax return to claim the deduction.
3. Categorizing Amazon income in QuickBooks, keeping the inventory up-to-date
Synder provides several ways to categorize your income to accommodate different business needs.
Auto-categorize products in QuickBooks
If you need to keep track of Amazon inventory in QuickBooks, you can create items in QuickBooks, assigning them to desired categories. Likely, you already have them created.
In that case, make sure that QuickBooks item names are spelled in an identical way to the way they are spelled in your Amazon store. Synder will be able to recognize these products and assign them to correct categories in the background.
Synder will also be able to auto-create new products when it detects some, unless you would like to disable that feature, which you can do at any time in Synder settings.
Categorizing all products into one category
Some Amazon sellers don’t need to keep information about each individual product. Even if your products are all named differently, you can enable a generic product name in Synder settings and choose an appropriate income account for all of your products to be recorded there.
Mapping the products in Synder
Sometimes a product name is spelled differently in your QuickBooks and Amazon. That shouldn’t prevent you from keeping your inventory and income reports up-to-date. That’s why we created a smart product mapping feature, where you can fill in the names from your payment platform in order to avoid having duplicates in your QuickBooks company.
Learn about the product mapping feature.
Learn more about auto and generic categorisation in the video below:
4. Inputting Amazon refunds into QuickBooks
In order to keep your books in order it’s necessary to keep track of any refunds, and fees that are deposited back into your account, as well as those that aren’t reimbursed.
Beyond the bookkeeping meaning, tracking all refunds in one place can provide helpful insights and show which products perform well, and which are returned more often than not.
Synder accounts for Amazon refunds and will create receipts for every refund you process on Amazon.
Learn more about Amazon refunds.
5. Recording the sales tax collected by Amazon in QuickBooks
Amazon sellers have to pay the sales tax. Whether you choose to do it yourself, or you let Amazon automatically withhold tax funds from your sales, this is inevitable.
When you pay a sales tax, it’s crucial to have it reflected in your books. The trouble is that many Amazon bookkeeping integrations are unable to automatically parse the sales tax – a major part of many Amazon transactions. Having to manually record it can lead to discrepancies and missed tax records.
Synder will automatically parse the sales tax, and you will not have to manually enter it into your books. It will also reflect in QuickBooks reports.
Learn more about Amazon sales taxes.
6. Entering Amazon credit into QuickBooks
Among the many peculiarities and transactions types in Amazon, various types of credits deserve special attention. Besides expenses, sometimes Amazon will reimburse you for different reasons, for example a delivery issue or other mistakes on their part.
All of these reimbursements and coupons will be recorded as deposits by Synder in order to keep a correct record in your books.
7. Reconciling Amazon transactions in QuickBooks
With your Amazon transactions recorded in QuickBooks you can look forward to an easy reconciliation process.
The auto-sync process will bring in all incoming transactions. If you need to record older data, use the Import Old Transactions option in Synder.
What’s particularly important is that all parts of the gross sales amount (including various Amazon fees and sales taxes) and any refunds and reimbursements have been recorded in QuickBooks, which replicates the actual money flow.
In order to prepare for an easy account reconciliation in QuickBooks, open the For Review tab in your checking account and click Match on pre-confirmed matches.
This is all you need to do to reconcile your checking account at ease.
Bonus tip: It’s highly advisable not to wait until the end of the year to record everything in your books. It will be easier to keep the data flowing into your books in the background, and reconciling your accounts once a month. This will allow you to find any possible discrepancies and reach the tax day without any stress.
Learn more about reconciling e-commerce transactions in your books.
Recording Amazon sales in QuickBooks may seem like a daunting task, but with the right tools at your disposal you can record all income and expense-related transactions, keeping the inventory up-to-date, and ensuring an easy account reconciliation process.
You are welcome to test Synder with your 10 free syncs provided (no credit card required). Our dedicated support team will be glad to assist should you have any questions. You are welcome to reach us via the Synder in-app chat, phone, or email which you will find at the footer of this page.
Disclaimer: This article provides educational information about various aspects of bookkeeping, including taxes. It is not a legal guideline and if you have any questions regarding the taxes or other legal issues, we recommend to consult a CPA or a certified tax practitioner.