Why e-commerce accountants love A2X.
The apparent simplicity of selling through the Amazon marketplace can be deceptive. Although the Amazon Seller Central portal provides details of each transaction in reports and file downloads, as businesses grow and sales increase, accountants and sellers start to find these reports unhelpful – to say the least.
Amazon's sales reports don't provide a breakdown of sales tax, don't date sales accurately month by month for accrual accounting, can't be exported to accounting software without huge issues, and include extremely confusing fees and charges. Even for relatively small Amazon sellers, it can become an accounting nightmare.
That's why many e-commerce accounting firms are turning to A2X to help manage their Amazon seller clients’ accounting. The A2X cloud software service resolves many of the bookkeeping issues caused by Amazon's reporting, making it simple to account for Amazon sales and to reconcile with the bank account.
Accounting outsource firm Catching Clouds is one example. Founder Scott Scharf works exclusively in e-commerce, is an Amazon accounting expert – and he’s a big proponent of using A2X for all his Amazon seller clients.
Here's why Scott – and other e-commerce accountants – love using A2X:
- It’s simple to set up and to use.
- It enables reconciliation of Amazon sales with the client’s bank account.
- It can be customised to the appropriate level of detail for each client.
- It works with all Amazon marketplaces and currencies worldwide.
Simple to set up, simple to use
Set-up is quick and straightforward. As soon as A2X is connected to an Amazon merchant account, it extracts all the relevant details from each Amazon settlement and summarizes the transactions into monthly sales journals. These are posted to QuickBooks Online or Xero automatically, or at the click of a button if the accountant prefers to check the amounts prior to posting.
This means previously complex accounting processes are automated, which gives accountants and sellers more time to focus on big-picture work rather than data entry and manual processes.
Scott Scharf explains: “It allows us to support clients and do their accounting. We can meet with them and talk to them about their business, rather than getting bogged down in the admin.”
Getting the books in order
E-commerce accountants such as Scott Scharf have seen Amazon sellers trying to reconcile their books without A2X – and it's almost impossible. They try to wade through data manually, they look through a few transactions and try to estimate their costs, and they struggle to apportion their Amazon transactions to the right financial periods.
These issues are not just frustrating for business owners and expensive in wasted time or accounting bills – they can cause real tax issues. Sellers can end up inadvertently paying too much or too little tax. This is a huge problem if they end up being audited by tax authorities.
“A2X is the only reliable way of posting Amazon income properly.”
Scharf calls A2X “the only reliable way of posting Amazon income properly.” With A2X, accurate details regarding sales tax, returns, shipping costs, and Amazon's complex fees are summarized in the settlement journals. This goes straight into Xero or QuickBooks Online and reconciles with the disbursements received into the bank account, so accountants and sellers can balance the books and make sure all tax obligations are met.
Some businesses wish to track every single Amazon fee; some simply want a summary of fees and charges for the month. Some want to track incoming profits and costs in great detail, others only wish to see a broader summary of costs.
A2X can be customised to give each seller the level of detail they need to run their business effectively. This isn't just about accounting, it's also about having accurate monthly data to be able to make good business decisions.
A2X handles worldwide sales, foreign currency and exchange details. It enables monthly financials to break down income by country, so sellers can see where their sales are coming from, and A2X posts transactions so that currencies are converted automatically. Scharf calls it “truly international Amazon accounting.”
“Truly international Amazon accounting.”
This makes it ideal for Amazon sellers who are working in Amazon marketplaces globally, selling products all over the world.
E-commerce accountants and their Amazon seller clients are finding that A2X resolves many of their time-consuming accounting issues, giving them the accurate financial data and up-to-date tax information they need to run their businesses effectively.
Get in touch to find out more about the benefits of A2X for you and your Amazon-seller clients.