You are way way way way way better than 5 minute bookkeeping , even i am doing a stupid thing that i am comparing you with that , You are the only one!!
This is by far the best video on RUclips for doing Amazon accounting in Quickbooks without any integration. You made it so easy. Thank you so much for creating this video and your other video with the chart of accounts. It has been a struggle for over a year now. I was able to adapt it to Quickbooks for Desktop (Mac 2019) and ended up creating an account for each item on the date range report by Income or Expense. I then grouped them by the account names you show in your video. Each statement is so easy to enter because my chart of accounts now match exactly to the date range report and my expectation is the groups will match the 1099. :-) You are a rock star!!!
By far the most useful quickbooks and amazon seller central tutorial I have ever come across on either platform!!! It's upsetting how bad the question and answer sections are on both quickbooks and amazon seller central about every topic. Thank You!!!
spent way to much time in zoom meetings and phone calls with QBO and amazon with no real answer. Thank you for putting this video together and creating a solution
Question for you RE: Sales Tax. 1.)If there's a difference of Sales Tax collected and withheld on the monthly statement, what type of Chart of Account do I need to setup in QBO? 2.) Do I create a Sales Tax Expense or Sales Tax Income account? For some reason I had some small difference for 4 months of the year between sales tax collected and withheld that I need to figure out what to do with. Thank youuu for your help!!!!
One of the best Amazon accounting Videos I have seen so far. I only want to express my most sincere appreciation and thanks for your work on making this video.
Just Subscribed! Thank you for making this video. This is the first Amazon QB video I have found that makes it simple. Every other video seems to make it as complicated as possible. Great job on the video!
Sarah, this is amazing! Thank you for making this video. This will help a lot of Amazon sellers with their bookkeeping which we all know isn't a walk in the park.
Thank you so much Sarah. What a fantastic video. Clear and simple to follow. I was a button-click away from purchasing software I didn't actually need. God bless your generosity, and keep up the good work.
Thanks you so much for going through this step by step! I was really struggling with my new Amazon business accounting but can’t afford an accountant yet. If possible, would love more videos on the expense side or bank reconciliation, or a list of “do this 1/wk, this 1/ month, etc’
I have a couple playlists of bookkeeping start to finish. One for bloggers one for Etsy sellers. Most of the information in those videos will apply to Amazon sellers too. I like your idea about a video on what to do each week/month, etc.
Honestly, I wish i would've came across this 4 months ago. My QB has been a mess and the CPA i have doing is not being helpful at all! Thank you very much! New Subscriber here! Please keep making videos!
I JUST DID THIS ! MY FIRST ENTRY EVER. NOT A CHANCE I COULD HAVE DONE IT MYSELF. THIS SAVED ME A TON OF MONEY. NOW IM ON TO ETSY,SHOPIFYAND EBAY. PLEASE MAKE A EBAY VIDEO! SUBBED! AND LOVE LOVE LOVE YOU! THANKS SARAH.
Wow! This is SO incredibly helpful. Started selling on Amazon last month and have felt so intimidated to figure out the accounting stuff. I should have known Sarah would come to the rescue - I found your tutorials YEARS ago when Etsy switched their reporting and set up journal entries following your steps. I figured there would be a similar solution for Amazon, glad Google brought me back to you : ) Thank you for the work you do! 💗🥰
Hey Sarah! Your Video Is the best ones I've found Explaining this process! Have you ever had to account for someone who uses a factoring company for their ecommerce invoices?
I really appreciate all the information you are providing in this video. The way you are explaining all of this is very easy to follow along. Thank you!
Hi Sarah, glad I found your video tutorial when I'm looking for ways how to record these sorts of transactions. I almost believe that there's no way to record these without the integration of amazon bookkeeping software to accounting software. Thank you so much.
I categorize all inventory purchases directly to COGS. Then, at the end of the month if you want to adjust for an ending inventory balance you can, but it's not absolutely necessary. It becomes very very cumbersome to try and track individual inventory items within QB for an Amazon business. (Unless you are buying in bulk and consistently selling only one or two products.)
Hi Sara!! could you please make a video for those beginners that use personal accounts and are trying to clear the transactions that are personal with out hurting any business reports.
Just categorize the personal transactions to Owner's Pay or Owner's Investment. Those accounts will show up on your Balance Sheet, but not your Profit & Loss report.
THANK YOU very much! I really appreciate this detailed, step-by-step tutorial. It's exactly what I was looking for, which until I came across your video, I was only finding recommendations to use affiliate links to purchase integration apps, written info that was too convoluted to make actual sense, and/or encouragement to hire that person for bookkeeping services. You earned a new sub here. Great job, and thanks again!
This is what I am exactly looking for how to match 1099k . Thanks! 1. If you do have tax differences, Under what ledger and type do you journal entry? 2. For Amazon holding at end of closing boom for the year. Do you have to make you is zero or is ok to carry balance for next year?
Do you mean if tax collected is greater than tax remitted in the lower right box? If so, then the difference would go to Sales Tax Payable, that would mean Amazon sent some sales tax to you. No need to close out Amazon Holding at year-end, the balance should carry forward.
@@SmallBusinessSarah 1099 k does report sale tax as income. If I add that at income sale tax to show exactly matching with 1099 k as credit. How do debit to balance sheet to show how it being take way by Amazon. Do I have to make contra account under balance sheet?Thanks!
I have not attempted to track actual Cost of Goods Sold in real time, instead, I do bookkeeping on the cash basis, and just record all purchases of items for resale or raw materials directly to Cost of Goods Sold.
Hi Sarah, Fantastic 👌 this is video full of knowledge for e commmre store in Amazon or other sources. Its best way to enter your sale by month in QuickBooks online. Once again i appreciate you Sarah. Also a make video if someone give services for e commmre store as bookkeeper in QuickBooks online. How much we estimate of budget for specific work. Thanks
Hi Sarah I hope you are doing great I have some questions to ask if you have some spare time please answer the following questions 1) How do you update for inventory and cogs 2) Can I use Amazon Receivable A/c instead of Amazon Holding Bank A/c ?
You can use the receivable account type, I just don't like how the receivable register works in QB compared to the checking register. Most of my clients are cash basis, but for some I do post a month end journal entry to account for inventory on hand.
Brilliant video! Still relevant after so many years. Couple of questions 1) Do you recommend the manual entry or have integrations improved and should be used 2) Does it have to be monthly entries. Can we not do a single annual entry if monthly accounts are not needed?
A2X is a good integration, but I still mostly use the journal entry method outlined here because it's fast, accurate, and saves a few bucks not paying for an integration. You certainly can do this yearly, you just lose the value of understanding how your business is doing throughout the year
Hi Sara, your videos are the best. Finally I been able to understand how this process works. Would you be able to explain how to integrate invoicing to this process, instead of entering total amount of sales every month? Once again thank you so much for this valuable information!!
Hi Sarah! Thank you so much for taking the time to create this video and help us all out. I had a question, how, when or where would I account for the operating expenses, cost of purchasing the good , costs of marketing etc when creating the monthly journal? I also notice the P&L does tie to Amazon's report but it doesn't represent the true P&L as it doesn't reflect some of this expenses, so I wasn't to sure how/where to represent this. Will appreciate your guidance. Thanks
Hi Mary, I'm assuming in QB that you have linked your business checking account or credit card accounts? When you go through the process of categorizing your bank feed (all the transactions that occurred on your bank or credit card account) that will populate the remainder of the other type of expenses you incur in your business. They will show up in the P&L after you categorize. The journal entry is only necessary to capture the Amazon specific items.
No, that's why the transactions are categorized to a holding account. Then the journal entry parses out the deposits into their revenue and expense components.
Thanks for explaining in such a good way, my question is regarding Sales tax and inventory, vendor accounts, As a Seller I would want all the business data on one place that is inventory, vendors, sales tax, investment
Great video. Interesting idea to create an Amazon holding account! This is the closest method I have seen to tie to Amazon's 1099. However, Amazon does include sales tax collected in their 1099 and this 2020 video did not. It is now 2022. Do you have a recommendation on how to include sales tax collected into gross revenues and subtract it somewhere else?
Here is my video on tying out to the 1099: ruclips.net/video/0Ze8mduCDHk/видео.html.Basically, you do have to use the 1099 figure that includes sales tax, but then on your tax return you need to include an equal expense deduction of the sales tax. Or if you prefer, go ahead and add the sales tax figure to your JE, but just make sure you add an equal expense. The accountant in me cringes at including sales tax as income (and the related expense), but I realize that may just make it easier for a tax preparer or business owner to understand at tax time.
Hi, Sarah, this video is quite helpful to me for doing bookkeeping in amazon but I have some question would you like to answer it? 1 is what is amazon holding? 2 what if my client wants to enter each sale transaction in QuickBooks through invoices ?? how can I do that? 3 what does inventory credit and shipping credit means I am a bit confused about it? if you answer these question I will be very thankful to you because I am beginner in bookkeeping
The use of a holding or clearing account is a typical bookkeeping method. Entering each sale individually is not sustainable. If they want more detail, consider using a program like A2X. I don't know what those credits are, they are just line items that are meaningful to Amazon somehow!
Hi Sarah, I love this video, it has been extremely helpful to me. However, I did notice that since your video posted, Amazon has changed the "Statement View page" so I was not able to follow along with the last part of your video (18:20 - 19:32). I was wondering if there is an updated video on 'How to do your Amazon Monthly Bookkeeping, Amazon Seller Central, Quickbooks Online" Thanks again for sharing your knowledge and expertise, it is truly appreciated.
Sarah: Your book and videos are very helpful. Do you have any video tutorial on eBay, Shopify and Walmart online stores? Do you have a list of normalized items in income and expense across Amazon, eBay, Shopify and Walmart online stores? Thanks.
Here is my video on Shopify: ruclips.net/video/DPFV6WVrfnA/видео.html In the description is a link to the Shopify Chart of Account video as well. I plan to do a video on eBay, but haven't got to that yet.
Hi Sarah, your video is so helpful! Thank you very much for detailing the process. Your Channel is the best and the only one. Beside recording Amazon payments, do you have a video showing how to track the inventory in Quickbooks for Amazon sellers, especially who are selling multiple categories of merchandises? If you don’t have yet, could you please make one? We are eager for your help because we are struggling with this issue. Thank you 🙏
Most small business owners are on the cash basis of accounting, so there's no need to track inventory withing the accounting system. Simply record all purchases of items for re-sale as Cost of Goods Sold. The IRS will have you do an ending inventory count at year end for tax purposes.
Sarah Korhnak Thank you very much for your reply Sarah! The problem is that we are purchasing and reselling 30+ different items including wholesale, retail, Amazon FBA/FBM, eBay etc. We really need to track the inventory not only for tax return purpose but also for proper inventory managing and organizing. Do you have any recommendations for this situation? 🙏
Hi Sarah, I am wondering how to we factor in the cost of goods into this as well? The price of the items when we orginally bought them and other external fees such as monthly softwares used for amazon fba?
Hi Julia, this video covers COGS ruclips.net/video/Mekj6Re137E/видео.html it's part of a playlist for Etsy sellers, but the entire playlist (except the one or two about the Etsy platform) would work for Amazon sellers as well. I tend to use an account called Online Tools, Programs & Subscriptions for the software tools that many online sellers use, but really any accountant that makes sense to you is fine.
Well, in this case, the journal entry is breaking out the gross sales and fees from each deposit, but on a monthly basis. Categorizing expenses in the bank feed is for the other expenses related to running your business, those that done run through Amazon.
Hi Sarah, This is great information that I've been using it for several years. So thank you so much! However, I see that Amazon has changed their navigation for the reports, so I'm having trouble finding this same report to use for monthly journal entries. Can you please let me know where to find this report now with the Amazon's New navigation? THANKS SO MUCH!!
Hi Michelle, I know we connected outside of RUclips, just wanted to share for others looking for this info in the comments. Now the report is found under Payments, Report Repository.
Well . . . . this part of the process is on the accrual basis, and therefore will tie to your 1099 at year-end. I usually recommend that the rest of your accounting be done on the Cash basis unless you are a huge entity.
This video only includes the steps to record your income and expenses directly related to Amazon. Obviously you will have other expenses that come through your bank feed.
Sarah, thank you for putting together this tutorial. It is most helpful for small businesses like mine. I have a clarifying question I am hoping you can help with. As you mentioned, one of the first steps is to categorize deposits which you do using Amazon Holding. How do we treat payments made to Amazon (where the credit card gets debited) in months where expenses exceed income? Would the Category or Match also be Amazon Holding? I am assuming so, but would be very grateful if you could confirm so I can proceed with reconciliation and then the monthly JEs! Thanks so much!
Yes, you are correct. If Amazon charges your bank or credit card because expenses exceeded income, that also should go to Amazon Holding. The only exception is that sometimes the $39.99 monthly seller fee is charged separately. That can just be categorized directly to a regular expense account.
@@SmallBusinessSarah Thanks for clarifying. I came across your May 2022 article where you talk about beaking things out in more detail on the monthly JEs to match the 1099K. My non-accounting, non-tax brain was is slightly confused by the sales tax section! You mention making an adjustment on the Schedule C. But if I have been following your JE approach in QBO and then using the P&L report to populate the Schedule C on TurboTax, do I still need to make the adjustment? The Amazon Income sub-accounts in QBO (Product Sales, Shipping Credits, Gift Wrap Credits, and Promotional Rebates) match the 1099K. Appreciate your continued guidance!
Hi Sarah, thank you for your tutorial, I did download your chart of account. My question that do I need to create for : product, shipping and gift wrap taxes collected, Product, shipping and gift wrap taxes refunded; Amazon Obligated Tax Withheld? My second question that how should i record the my business shipping cost (from Freight forwarder, sample, cost interst fee exchange...etc everything cost product from china to amz)?
I'm not exactly sure what your asking in your first question. Second question, the cost of Shipping your products from China to Amazon should be categorized to a Cost of Goods Sold account.
Thank you Sarah, wondered how to handle exchange rates with this. I have created the Amazon Holding Account in USD; and been able to record the transfer's to the CAD bank account. My issue is record the income and expenses and tax which have to be recorded in CAD,
I use the transfers section to determine an average exchange rate for the month. Once I have calculated the average exchange rate, I apply that to each income or expense line.
Thanks for the useful video Sara. In addition, where would we enter the cost of our inventory? Also, where do you enter the money Amazon transfers into our bank account in quickbooks? Do you create another journal entry?
Hi John, most small business owner's are on the cash basis of accounting. So when you purchase inventory, it is categorized as Cost of Goods Sold. If you are on the cash basis of accounting, then you don't track inventory on hand on your Balance Sheet. However, the IRS will make you do an end of year inventory count. Here is a video on Cost of Goods Sold: ruclips.net/video/Mekj6Re137E/видео.html . The transfers from Amazon to your bank account will appear in your bank feed, and should be categorized to Amazon Bank. See the video around the 11:45 mark.
@@SmallBusinessSarah Thank you so much for very well done instructions. This is very very helpful. If you could clarify for me on the question from John (above) I am setting QuickBooks online to capture my all 2020 transactions on Amazon. I am not clear if I should connect my Bank Checking and Credit Card Accounts with QuickBooks. I guess I am nor clear if I will cause duplicates by connecting bank checking account with QuickBooks and then enter my monthly journal entry which will have the amount transferred to Bank as well. Separate question is about business credit cards. Should I connect these accounts with QuickBooks and if yes what account these transactions should go to. Thank You again
@@walskiaccount Yes, you should connect any business financial accounts you have to QB, including PayPal, bank accounts, and credit card accounts. The journal entry discussed in the video will not cause duplications, I promise!
Great Video Sarah! Thanks for taking the time to do this. It helped clarify things a TON!!! A quick question, how do you handle scenarios where there was a charge on a credit card instead of a deposit to the bank (when your sales didn't cover the ad spend let's say)? Does the credit card charge pull from the Amazon Holding account? It feels like it should but what do I know....
Great question! I wish my example in the video would have had this scenario. So if in the lower left hand corner of the summary you see that Amazon charged your account (just like you describe) then find that charge in your bank feed and categorize that charge to Amazon Holding (which is what I think you were suggesting). Whatever fee the charge was in regard to will get picked up with entry.
@@SmallBusinessSarah Hello Sarah, I am currently working in a month where this happened. But I need some quick guidance. After reporting in the journal all my expenses and sales, I understand I should use Amazon Holding to add the amount I was charged. However, the if I add the charge it does not balance my journal out. (For example, my charge was of $180, but to balance the journal out I only need $70... could you shed some light in this? Thank you!
Hi Sarah, Glad to find your video, very well explained. Thank you so much. Great Job! As you mentioned below "All purchases of inventory or raw materials you can categorize to Cost of Goods Sold" . Can all purchases be summed into one entry in the monthly Journal entry which you have demonstrated in the video ? Please Advise
How it should work is that your business bank and credit cards are connected to QB. So on the Banking Tab, the transactions from these accounts will feed in. All the transactions that are purchases of raw materials or items for resale, just add the vendor and choose the Cost of Goods Sold category. That's it! Super easy.
Hi Sarah! Your videos are insanely helpful for getting started with QBO. Would you recommend this manual entry method over the option to sync Amazon directly to QBO as a sales channel? (and same question for the option to sync Shopify as a sales channel?) Trying to decide which route to pursue, which will be cleaner/easier/etc. I will definitely follow this method for Etsy, as the sync with etsy app for some reason isn't working in my account.
I would recommend my method over linking directly. I had a client link directly, and non of the information brought over made sense or would allow the business owner to tie to the 1099 at year-end. Especially if you don't know what SHOULD be happening in your bookkeeping when you use an integration, then I recommend skipping the integration and just doing my manual entry because it's so easy!
Hi Sarah, thank you so much for this video. Is there any chance you could create some eBay videos for journal entry using eBay statements they provide? If you need some data help for you video please let me know I can share with you some statements for the video.
I have actually tried to use the eBay reports to do a similar journal entry, and the reports were not very easy to use. So now, if I have a client selling on eBay, I use A2X to help with their bookkeeping. Here is a link to that video: ruclips.net/video/xTVwroHFJD0/видео.html
Hi Sarah, Thanks for both great videos on how to record Amazon. On this video at 12:05 I see "Amazon" under Vendor/Customer field. Should I create Amazon as Customer or Vendor or both?
@@SmallBusinessSarah Thanks for your VERY quick response. So, if I create "Amazon (c)" customer and "Amazon (v)" vendor, when should I use which one? Do you have a video or writing to explain more in this regard?
@@farhadraeisi9480 If you purchase items from Amazon, supplies and things like that, use vendor. Use customer for the deposits from Amazon, your payouts from the items you sold.
I record all inventory purchases directly to COGS rather than try to track inventory in QB. This is just a quicker and easier approach, and usually inventory information is available in other places, like your seller dashboard.
Thank you for this video. It really helped me. One question, you said to combine shipping credits and shipping credits refunds and put it in credit or is it to minus shipping credit refunds and input in credit?
Because of the way the 1099 is set up, I now do a separate line item for the credits and the refunds. I do separate lines for shipping credits and refunds, promotional rebates and refunds, and gift wrap credit and refunds.
Hi Sarah, thank you for creating these FBA accounting videos. I downloaded the monthly payment summaries as you described and compared them to the 1099-K from Amazon and some of the numbers still do not match. I have 7 months where the numbers match exactly, 4 months where the Product sales are slightly off and everything else matches, and 1 month where none of the numbers match? Do you have any ideas where the discrepancies are from? I don't understand why Amazon's monthly payment summary reports don't match up the monthly line items on the 1099-K. Should I just use the numbers from the 1099K instead?
I agree, it seems like the 1099 should match their own summaries! Sometimes it can just be a timing difference. I wouldn't make adjustments month by month, but just make a total adjustment at year-end to tie out to the 1099. It probably won't be a significant adjustment that has to be made.
Thank you for this video, it is so helpful! Could you please clarify in the months where expenses exceed income. When moving the seller repay to Amazon Holding is that a deposit or as an expense? In the Amazon Holding bank register is it under the payments or deposit?
Hello Sarah, great video! I have a question. Amazon reports the sales tax collected as if it was income in the 1099-k. How do you treat this inflated number when filing federal taxes? Should we report it as income and then deduct it as an expense? It's interesting because other marketplaces don't include the collected sales tax in the 1099-k, but Amazon is always special...
Hi Diego, yes you should report the full 1099 figure that includes sales tax, but then you should deduct that amount as an expense. You are right on the money!
Very awesome video! Thanks for your help! I have two questions. I appreciate it if you can tell me where the number Amazon Sales $3355.45 can be found in the Amazon report and which numbers add together get the total Amazon other selling fees $808.72 in the journal entry.
I am not familiar at all with Canadian tax, but if you have a positive tax number in the bottom right corner, I would categorize that as a Credit to a Sales Tax Payable account (or GST Payable if that's what you call it).
Hi Sarah, Excellent work explaining the holding balance. I am one year in into selling and this will be my first year filling. I just started using QuickBooks online also. However, last year I maintained a spreadsheet of all my accounting and strictly used my business account for expenses and incomes. The problem is that the amount in my checking account, as deposited by Amazon, and the amount on 1099K and the amount on statement summary for the whole year do not match. I cannot reconcile them.
So I did this method for the whole year and was excited to have it match up to the 1099 my client just sent me...it doesn't! My numbers in QBO match exactly to the amazon monthly summary reports and it was nice every month that my P&L numbers tied out to the monthly summary report. But then why is the number different on 1099??- Are the monthly summary reports not the same number on the 1099 for each month? What am I missing?
A couple things. Did you look at page 2 of the 1099 where everything is broken down? Plus I found this year I neeed to break out the shipping credit refunds and promotional rebate refunds, instead of netting them. Third, Amazon sometimes amends a monthly summary, you may need to rerun it. Fourth, Amazon includes sales tax in the 1099 that is not income to the client.
Just sharing my experience - I also did this method for whole year, Interesting -to match P&L total income with unadjusted gross sales on 1099K - ( add sales tax, refunds and subtract other credits to total income reported in P&L (these are not listed on 1099k from ) then it matches .
@@SmallBusinessSarah Thanks - I didn't realize there was a page 2 on the 1099 - this solves it perfectly. I see my numbers are right on my P&L when I look at those columns - and then now i understand how they add and subtract the other numbers now to reflect the total on the 1099. And yes - I see what you mean on the promotional rebate refunds and credits - I also netted them so the numbers seemed off at first - but once I opened up the reports I see the 1099 is just using the credits line on the shipping and promotional and not the refund part
@@katiolson688 yep, you got it. In past years I don't remember the shipping and promotional rebates, being broken out separately, so that's why I don't show it in the video. But going forward I will show those amounts gross and not net. Gotta love page 2 of the 1099. I wish all companies provided such a detailed break out.
Hello Sarah. I have a question about the Journal Entry. What if I am paying my Amazon Ads with my credit card? Should I include them when I do the Journal Entry from the Monthly amazon report or should I ignore the Cost of advertising and just register the credit card payment so that it is not duplicated? Please let me know your thoughts and thanks so much for your time, support and amazing videos!
From what I can tell, Ads can be charged either through the summary report, billed separately, or both! Maybe this is due to different Ad types? Not sure. If Ad expense appears in your summary, then include it in your JE. If Ads are charged separately then go ahead and categorize them directly to an Advertising Expense account, and do not include them in your journal entry.
If you wanted to update your stuff more often like twice a month or every week can you do the same thing and just set the dates on the summary payment statement for the dates that you want to run the report for,,,,
This is a very thorough video. Do you actually have a bank account with Amazon? In the video you took the transaction in the bank feed and pointed it to Amazon Holding which is a bank account. I am kind of stuck on this detail trying to understand it. So did the money actually transfer out of Amazon to your regular business bank account? And by pointing it to Amazon Holding account it cleared your regular bank register to reconcile? but instead of pointing it to an income account you temporarily placed it in a bank account even though it technically isn't a real bank account? Thanks!
Yes, you've got it! Amazon Holding is just that, a holding account. I set it up as a checking type account in QB, but it's not really a checking account. When the deposits enter the bank feed, I categorize them to Amazon Holding. Then the sales and fees are later parsed out of this account via the journal entry.
Thank you Sarah, excellent video and just want I was looking for. I do have a question though. I have entered my Amazon statements from April and May following your instructions and my Amazon Holding account is negative $800+. Is this correct, it seems wrong to me!
Amazon Holding will go negative during the month, and then should be positive once you post the monthly journal entry. If it is negative after you post the journal entry, then something has gone wrong. Possibly a beginning balance issue?
This is how I handle that. It gets the figures close, and then I can adjust at the end of the year when I receive 1099s. Each Amazon country "shop" has it's own summary report. So for the shop in a different currency, I pull up the summary report as usual and look at the amount transferred to my bank account in the lower left corner. That amount will be in the foreign currency. I compare that amount to the actual amount I received in my bank account, in my native currency. I use this information to calculate an average exchange rate for the month. Then I apply that exchange rate to each line of the amazon summary report and create my journal entry as usual after applying the exchange rate. As I said, it's not completely precise as it uses an average exchange rate for the month, but it will get you very close. Hope that helps!
subsribed! thankyou for this. 😊 however, we seem to be missing the COGS portion when going for the final profit /loss figures and i believe this is important. 🤔
Any products you purchase for resale will come through your bank feed if you have your bank or credit cards connected. Categorize all purchases for resale or raw materials as cost of goods sold. For tax purposes you will have to do an end of year inventory count.
@@SmallBusinessSarah Thankyou for this input! This makes things a lot easier but also comes at the cost of overstating/understating monthly P/L depending on the timing of invertory purchases. Unless the selling price for the items are fixed at a specific markup, say 150% of product cost. Are we allowed to make a journal entry using this?
What i mean by this method is that we divide the gross sales by 150% to get the COGS. is this possible? then any difference that would show up on the year end, we do a adjusting journal entry.
@@samirthevirtualbookkeeper the method I mentioned is the Cash Basis of Accounting. Most small businesses select this method. You are right though that the Accrual basis of accounting matches revenue with the related expense. The Accrual basis must be used by larger businesses, but it is more difficult to be implement. Truth be told, most small businesses end up with a mix of cash and accrual bookkeeping, which is okay. If making a monthly adjustment to inventory and COGS is something you want to do, then go for it!
@@SmallBusinessSarah This is noted! Thanks a lot for the time and for the response. I would definitely go for the cash basis for now as it is way easier. 😁
What about the "Transfers" section in bottom left? How do you book entry for deposits from Amazon? Dr. Cash Cr. Amazon Holding? and what about the charges to credit card? Do you also run that through Amazon Holding - i.e. Dr. Amazon Holding, Cr. Accounts Payable/Cash?? Thanks so much!!
The transfers section is the total deposits to checking from Amazon. We already categorized those to Amazon Holding from the bank feed. And yes, if Amazon charges your credit card (also outlined in the transfers section) categorize that to Amazon Holding as well.
The ending balance in Amazon Holding, does represent the amount of money Amazon owes you, so yes the ending value is basically like an Accounts Receivable. I don't use an Accounts Receivable account type because the register for that account type is weird in QB!
**New updated video** ruclips.net/video/QnZlGKHmZyM/видео.htmlsi=Kv7nSaH5OcAV4U1K
You are way way way way way better than 5 minute bookkeeping , even i am doing a stupid thing that i am comparing you with that , You are the only one!!
Thanks so much!
This is by far the best video on RUclips for doing Amazon accounting in Quickbooks without any integration. You made it so easy. Thank you so much for creating this video and your other video with the chart of accounts. It has been a struggle for over a year now. I was able to adapt it to Quickbooks for Desktop (Mac 2019) and ended up creating an account for each item on the date range report by Income or Expense. I then grouped them by the account names you show in your video. Each statement is so easy to enter because my chart of accounts now match exactly to the date range report and my expectation is the groups will match the 1099. :-) You are a rock star!!!
Glad it was helpful!
By far the most useful quickbooks and amazon seller central tutorial I have ever come across on either platform!!! It's upsetting how bad the question and answer sections are on both quickbooks and amazon seller central about every topic. Thank You!!!
Glad it was helpful!
Thank you. Thank you. Thank you.
I've been trading on Amazon for six months and really struggled to find this info.
Glad it was helpful!
spent way to much time in zoom meetings and phone calls with QBO and amazon with no real answer. Thank you for putting this video together and creating a solution
Glad it helped!
Question for you RE: Sales Tax.
1.)If there's a difference of Sales Tax collected and withheld on the monthly statement, what type of Chart of Account do I need to setup in QBO?
2.) Do I create a Sales Tax Expense or Sales Tax Income account? For some reason I had some small difference for 4 months of the year between sales tax collected and withheld that I need to figure out what to do with.
Thank youuu for your help!!!!
Sales tax is not an income and nor expense... It is laiblity and asset at the same time so we must treat it into balance sheet
You would create a Sales Tax Payable account, which is a liability account type.
Thank you! I have struggled with this for so long! And you created a video for free? You are so generous!
Happy to help!
One of the best Amazon accounting Videos I have seen so far. I only want to express my most sincere appreciation and thanks for your work on making this video.
You're very welcome!
Thank you so much for this. Even though my client doesn't use QB, I am able to adapt this. You are very clear and concise, Thanks. God bless.
Glad it was helpful!
Been trying to find a good VIDEO on this, every other video I found skipped steps. This is a very clear video. Well made. Thank you Sarah :)
Just Subscribed! Thank you for making this video. This is the first Amazon QB video I have found that makes it simple. Every other video seems to make it as complicated as possible. Great job on the video!
Glad it was helpful!
This method is perfect! Thanks Sarah.
Glad it was helpful!
Sarah, this is amazing! Thank you for making this video. This will help a lot of Amazon sellers with their bookkeeping which we all know isn't a walk in the park.
Glad it was helpful!
I agree this is the best explained video simple and easy to follow
Thank you so much Sarah. What a fantastic video. Clear and simple to follow. I was a button-click away from purchasing software I didn't actually need. God bless your generosity, and keep up the good work.
Glad I saved you some money! There are integrations for Amazon, but once you get the hang of it, this entry is pretty fast, plus it's super accurate!
this video was amazing and easy to under stand thank you!!!!
Glad it helped!
Thanks you so much for going through this step by step! I was really struggling with my new Amazon business accounting but can’t afford an accountant yet. If possible, would love more videos on the expense side or bank reconciliation, or a list of “do this 1/wk, this 1/ month, etc’
I have a couple playlists of bookkeeping start to finish. One for bloggers one for Etsy sellers. Most of the information in those videos will apply to Amazon sellers too. I like your idea about a video on what to do each week/month, etc.
Honestly, I wish i would've came across this 4 months ago. My QB has been a mess and the CPA i have doing is not being helpful at all! Thank you very much! New Subscriber here! Please keep making videos!
Glad I could help
Sarah has great contents. Were you able to have your book up to date?
Hey Sarah, absolutely fantastic content. You've nailed it! This is exactly what's missing from our day to day life. Great job! No seriously.
Glad it was helpful!
Great Video Thanks
I JUST DID THIS ! MY FIRST ENTRY EVER. NOT A CHANCE I COULD HAVE DONE IT MYSELF. THIS SAVED ME A TON OF MONEY. NOW IM ON TO ETSY,SHOPIFYAND EBAY. PLEASE MAKE A EBAY VIDEO! SUBBED! AND LOVE LOVE LOVE YOU! THANKS SARAH.
again, awesome
Amazing explanation! Thank you. I loved all the screen shots and explanation.
Glad it was helpful!
thank you so much for this! You are so very kind Sarah!
You are so welcome!
You are my quickbooks hero! 🥰 thank you for this info.
Thank you. This is what I need now exactly!
Glad I could help!
Great way of explaining things. Thanks for sharing your knowledge. Keep it up!
Glad it was helpful!
Wow! This is SO incredibly helpful. Started selling on Amazon last month and have felt so intimidated to figure out the accounting stuff. I should have known Sarah would come to the rescue - I found your tutorials YEARS ago when Etsy switched their reporting and set up journal entries following your steps. I figured there would be a similar solution for Amazon, glad Google brought me back to you : ) Thank you for the work you do! 💗🥰
Thank you so much for that sweet comment! Glad I could be helpful!
Thanks a lot for valuable information!
Hey Sarah!
Your Video Is the best ones I've found Explaining this process! Have you ever had to account for someone who uses a factoring company for their ecommerce invoices?
No! I have not dealt with factoring!
IT IS REALY HELPFUL FOR ME
I really appreciate all the information you are providing in this video. The way you are explaining all of this is very easy to follow along. Thank you!
Sarah, thank you soo much for such an incredibly helpful video!!
Glad it was helpful!
Hi Sarah, glad I found your video tutorial when I'm looking for ways how to record these sorts of transactions. I almost believe that there's no way to record these without the integration of amazon bookkeeping software to accounting software. Thank you so much.
Hi Sarah, Thank you for this video! Do you have a video on how to track inventory, cost of good sold, etc?
I categorize all inventory purchases directly to COGS. Then, at the end of the month if you want to adjust for an ending inventory balance you can, but it's not absolutely necessary. It becomes very very cumbersome to try and track individual inventory items within QB for an Amazon business. (Unless you are buying in bulk and consistently selling only one or two products.)
Hi Sara!! could you please make a video for those beginners that use personal accounts and are trying to clear the transactions that are personal with out hurting any business reports.
Just categorize the personal transactions to Owner's Pay or Owner's Investment. Those accounts will show up on your Balance Sheet, but not your Profit & Loss report.
@@SmallBusinessSarah and categorizing it as personal experience be okay as well? Or is there a difference?
Just Subscribed ! Thanks for this amazing video , best Amazon Bookkeeping lesson ,
THANK YOU very much! I really appreciate this detailed, step-by-step tutorial. It's exactly what I was looking for, which until I came across your video, I was only finding recommendations to use affiliate links to purchase integration apps, written info that was too convoluted to make actual sense, and/or encouragement to hire that person for bookkeeping services. You earned a new sub here. Great job, and thanks again!
I am so glad you appreciate my videos!
Good Stuff. Step by Step. Thank you!
Glad it was helpful!
This is what I am exactly looking for how to match 1099k . Thanks!
1. If you do have tax differences, Under what ledger and type do you journal entry?
2. For Amazon holding at end of closing boom for the year. Do you have to make you is zero or is ok to carry balance for next year?
Do you mean if tax collected is greater than tax remitted in the lower right box? If so, then the difference would go to Sales Tax Payable, that would mean Amazon sent some sales tax to you. No need to close out Amazon Holding at year-end, the balance should carry forward.
@@SmallBusinessSarah 1099 k does report sale tax as income. If I add that at income sale tax to show exactly matching with 1099 k as credit. How do debit to balance sheet to show how it being take way by Amazon. Do I have to make contra account under balance sheet?Thanks!
Can you point me towards a video/resource to learn how to track COGS for these sales on a monthly basis? Thanks for your video. Very straightforward!
I have not attempted to track actual Cost of Goods Sold in real time, instead, I do bookkeeping on the cash basis, and just record all purchases of items for resale or raw materials directly to Cost of Goods Sold.
Great tutorial. Thank you!
Glad you enjoyed it!
This is great! A2X made a big mess I’m trying to clean up.
Glad it helped!
Hi Sarah,
Fantastic 👌 this is video full of knowledge for e commmre store in Amazon or other sources. Its best way to enter your sale by month in QuickBooks online.
Once again i appreciate you Sarah. Also a make video if someone give services for e commmre store as bookkeeper in QuickBooks online. How much we estimate of budget for specific work. Thanks
Hello! I'm not exactly sure what your question is. Can you explain further? Thanks!
Great video! I reference it once a month when I do my books.
Love that!
Thank you for this video!
You bet!
Thank you Sarah! I look forward to watching many more of your videos. 🙂🙏
Hi Sarah I hope you are doing great I have some questions to ask if you have some spare time please answer the following questions 1) How do you update for inventory and cogs
2) Can I use Amazon Receivable A/c instead of Amazon Holding Bank A/c ?
You can use the receivable account type, I just don't like how the receivable register works in QB compared to the checking register. Most of my clients are cash basis, but for some I do post a month end journal entry to account for inventory on hand.
Life saver
Brilliant video! Still relevant after so many years. Couple of questions
1) Do you recommend the manual entry or have integrations improved and should be used
2) Does it have to be monthly entries. Can we not do a single annual entry if monthly accounts are not needed?
A2X is a good integration, but I still mostly use the journal entry method outlined here because it's fast, accurate, and saves a few bucks not paying for an integration. You certainly can do this yearly, you just lose the value of understanding how your business is doing throughout the year
Hi Sara, your videos are the best. Finally I been able to understand how this process works. Would you be able to explain how to integrate invoicing to this process, instead of entering total amount of sales every month? Once again thank you so much for this valuable information!!
I have never attempted to do it that way! I'm sure there is a way, but I can't advise. Sorry!
Great video. Would love if you could do the same video for eBay sellers too!
It's on the list, but this is a busy time of year! I will eventually get to it!
Hi Sarah! Thank you so much for taking the time to create this video and help us all out. I had a question, how, when or where would I account for the operating expenses, cost of purchasing the good , costs of marketing etc when creating the monthly journal? I also notice the P&L does tie to Amazon's report but it doesn't represent the true P&L as it doesn't reflect some of this expenses, so I wasn't to sure how/where to represent this. Will appreciate your guidance. Thanks
Hi Mary, I'm assuming in QB that you have linked your business checking account or credit card accounts? When you go through the process of categorizing your bank feed (all the transactions that occurred on your bank or credit card account) that will populate the remainder of the other type of expenses you incur in your business. They will show up in the P&L after you categorize. The journal entry is only necessary to capture the Amazon specific items.
Once you categorize a transaction and then you also put a journal entry which means you are recording a transaction 2 times
No, that's why the transactions are categorized to a holding account. Then the journal entry parses out the deposits into their revenue and expense components.
Thanks for explaining in such a good way, my question is regarding Sales tax and inventory, vendor accounts, As a Seller I would want all the business data on one place that is inventory, vendors, sales tax, investment
Amazing content
Great video. Interesting idea to create an Amazon holding account! This is the closest method I have seen to tie to Amazon's 1099. However, Amazon does include sales tax collected in their 1099 and this 2020 video did not. It is now 2022. Do you have a recommendation on how to include sales tax collected into gross revenues and subtract it somewhere else?
Here is my video on tying out to the 1099: ruclips.net/video/0Ze8mduCDHk/видео.html.Basically, you do have to use the 1099 figure that includes sales tax, but then on your tax return you need to include an equal expense deduction of the sales tax. Or if you prefer, go ahead and add the sales tax figure to your JE, but just make sure you add an equal expense. The accountant in me cringes at including sales tax as income (and the related expense), but I realize that may just make it easier for a tax preparer or business owner to understand at tax time.
Hi, Sarah, this video is quite helpful to me for doing bookkeeping in amazon but I have some question would you like to answer it?
1 is what is amazon holding?
2 what if my client wants to enter each sale transaction in QuickBooks through invoices ?? how can I do that?
3 what does inventory credit and shipping credit means I am a bit confused about it?
if you answer these question I will be very thankful to you because I am beginner in bookkeeping
The use of a holding or clearing account is a typical bookkeeping method. Entering each sale individually is not sustainable. If they want more detail, consider using a program like A2X. I don't know what those credits are, they are just line items that are meaningful to Amazon somehow!
Hi Sarah, I love this video, it has been extremely helpful to me. However, I did notice that since your video posted, Amazon has changed the "Statement View page" so I was not able to follow along with the last part of your video (18:20 - 19:32). I was wondering if there is an updated video on 'How to do your Amazon Monthly Bookkeeping, Amazon Seller Central, Quickbooks Online" Thanks again for sharing your knowledge and expertise, it is truly appreciated.
Thanks for letting me know that some of this has changed. I will need to look into this and let you know!
Sarah: Your book and videos are very helpful. Do you have any video tutorial on eBay, Shopify and Walmart online stores? Do you have a list of normalized items in income and expense across Amazon, eBay, Shopify and Walmart online stores? Thanks.
Here is my video on Shopify: ruclips.net/video/DPFV6WVrfnA/видео.html In the description is a link to the Shopify Chart of Account video as well. I plan to do a video on eBay, but haven't got to that yet.
Hi Sarah, your video is so helpful! Thank you very much for detailing the process. Your Channel is the best and the only one. Beside recording Amazon payments, do you have a video showing how to track the inventory in Quickbooks for Amazon sellers, especially who are selling multiple categories of merchandises? If you don’t have yet, could you please make one? We are eager for your help because we are struggling with this issue. Thank you 🙏
Most small business owners are on the cash basis of accounting, so there's no need to track inventory withing the accounting system. Simply record all purchases of items for re-sale as Cost of Goods Sold. The IRS will have you do an ending inventory count at year end for tax purposes.
Sarah Korhnak Thank you very much for your reply Sarah! The problem is that we are purchasing and reselling 30+ different items including wholesale, retail, Amazon FBA/FBM, eBay etc. We really need to track the inventory not only for tax return purpose but also for proper inventory managing and organizing. Do you have any recommendations for this situation? 🙏
I'm having a similar issue now, did you figure out a solution for your problem?
Hi Sarah, I am wondering how to we factor in the cost of goods into this as well? The price of the items when we orginally bought them and other external fees such as monthly softwares used for amazon fba?
Hi Julia, this video covers COGS ruclips.net/video/Mekj6Re137E/видео.html it's part of a playlist for Etsy sellers, but the entire playlist (except the one or two about the Etsy platform) would work for Amazon sellers as well. I tend to use an account called Online Tools, Programs & Subscriptions for the software tools that many online sellers use, but really any accountant that makes sense to you is fine.
@@SmallBusinessSarah thank you so much!
This is great! Would you mind explaining how journal entries and categorizing expenses go hand-in-hand?
Well, in this case, the journal entry is breaking out the gross sales and fees from each deposit, but on a monthly basis. Categorizing expenses in the bank feed is for the other expenses related to running your business, those that done run through Amazon.
it was a awesome video
Hi Sarah, This is great information that I've been using it for several years. So thank you so much! However, I see that Amazon has changed their navigation for the reports, so I'm having trouble finding this same report to use for monthly journal entries. Can you please let me know where to find this report now with the Amazon's New navigation? THANKS SO MUCH!!
Hi Michelle, I know we connected outside of RUclips, just wanted to share for others looking for this info in the comments. Now the report is found under Payments, Report Repository.
Hello Sarah, this is a great video! Please confirm whether this is cash basis or accrual basis accounting. Thank you!
Well . . . . this part of the process is on the accrual basis, and therefore will tie to your 1099 at year-end. I usually recommend that the rest of your accounting be done on the Cash basis unless you are a huge entity.
The IRS Schedule C asks for inventory balances. Additionally, you are understating expenses by the amount of COGS.
This video only includes the steps to record your income and expenses directly related to Amazon. Obviously you will have other expenses that come through your bank feed.
Sarah, thank you for putting together this tutorial. It is most helpful for small businesses like mine. I have a clarifying question I am hoping you can help with. As you mentioned, one of the first steps is to categorize deposits which you do using Amazon Holding. How do we treat payments made to Amazon (where the credit card gets debited) in months where expenses exceed income? Would the Category or Match also be Amazon Holding? I am assuming so, but would be very grateful if you could confirm so I can proceed with reconciliation and then the monthly JEs! Thanks so much!
Yes, you are correct. If Amazon charges your bank or credit card because expenses exceeded income, that also should go to Amazon Holding. The only exception is that sometimes the $39.99 monthly seller fee is charged separately. That can just be categorized directly to a regular expense account.
@@SmallBusinessSarah Thanks for clarifying. I came across your May 2022 article where you talk about beaking things out in more detail on the monthly JEs to match the 1099K. My non-accounting, non-tax brain was is slightly confused by the sales tax section! You mention making an adjustment on the Schedule C. But if I have been following your JE approach in QBO and then using the P&L report to populate the Schedule C on TurboTax, do I still need to make the adjustment? The Amazon Income sub-accounts in QBO (Product Sales, Shipping Credits, Gift Wrap Credits, and Promotional Rebates) match the 1099K. Appreciate your continued guidance!
Hi Sarah, thank you for your tutorial, I did download your chart of account. My question that do I need to create for : product, shipping and gift wrap taxes collected, Product, shipping and gift wrap taxes refunded; Amazon Obligated Tax Withheld? My second question that how should i record the my business shipping cost (from Freight forwarder, sample, cost interst fee exchange...etc everything cost product from china to amz)?
I'm not exactly sure what your asking in your first question. Second question, the cost of Shipping your products from China to Amazon should be categorized to a Cost of Goods Sold account.
Thank you Sarah, wondered how to handle exchange rates with this. I have created the Amazon Holding Account in USD; and been able to record the transfer's to the CAD bank account. My issue is record the income and expenses and tax which have to be recorded in CAD,
I use the transfers section to determine an average exchange rate for the month. Once I have calculated the average exchange rate, I apply that to each income or expense line.
Hello, thank you very useful video. Do you have a video for finding out and recording COGS from Amazon seller to QB? thank you.
For small sellers I recommend just recording purchases of items for resale directly to COGS. ruclips.net/video/NoCOga8NAvo/видео.html
Thank you
Awesome video! I will definitely be subscribing. I had a questions about generating the reports now in 2022. Is it still under the payments tab?
I'm still seeing it under Reports, Payments, Date Range Reports. But it does all look a little bit different!
Thanks for the useful video Sara. In addition, where would we enter the cost of our inventory? Also, where do you enter the money Amazon transfers into our bank account in quickbooks? Do you create another journal entry?
Hi John, most small business owner's are on the cash basis of accounting. So when you purchase inventory, it is categorized as Cost of Goods Sold. If you are on the cash basis of accounting, then you don't track inventory on hand on your Balance Sheet. However, the IRS will make you do an end of year inventory count. Here is a video on Cost of Goods Sold: ruclips.net/video/Mekj6Re137E/видео.html . The transfers from Amazon to your bank account will appear in your bank feed, and should be categorized to Amazon Bank. See the video around the 11:45 mark.
@@SmallBusinessSarah Thank you so much for very well done instructions. This is very very helpful. If you could clarify for me on the question from John (above) I am setting QuickBooks online to capture my all 2020 transactions on Amazon. I am not clear if I should connect my Bank Checking and Credit Card Accounts with QuickBooks. I guess I am nor clear if I will cause duplicates by connecting bank checking account with QuickBooks and then enter my monthly journal entry which will have the amount transferred to Bank as well.
Separate question is about business credit cards. Should I connect these accounts with QuickBooks and if yes what account these transactions should go to.
Thank You again
@@walskiaccount Yes, you should connect any business financial accounts you have to QB, including PayPal, bank accounts, and credit card accounts. The journal entry discussed in the video will not cause duplications, I promise!
Great Video Sarah! Thanks for taking the time to do this. It helped clarify things a TON!!!
A quick question, how do you handle scenarios where there was a charge on a credit card instead of a deposit to the bank (when your sales didn't cover the ad spend let's say)? Does the credit card charge pull from the Amazon Holding account? It feels like it should but what do I know....
Great question! I wish my example in the video would have had this scenario. So if in the lower left hand corner of the summary you see that Amazon charged your account (just like you describe) then find that charge in your bank feed and categorize that charge to Amazon Holding (which is what I think you were suggesting). Whatever fee the charge was in regard to will get picked up with entry.
@@SmallBusinessSarah Hello Sarah, I am currently working in a month where this happened. But I need some quick guidance. After reporting in the journal all my expenses and sales, I understand I should use Amazon Holding to add the amount I was charged. However, the if I add the charge it does not balance my journal out. (For example, my charge was of $180, but to balance the journal out I only need $70... could you shed some light in this? Thank you!
Hi Sarah, Glad to find your video, very well explained. Thank you so much. Great Job!
As you mentioned below "All purchases of inventory or raw materials you can categorize to Cost of Goods Sold" . Can all purchases be summed into one entry in the monthly Journal entry which you have demonstrated in the video ? Please Advise
How it should work is that your business bank and credit cards are connected to QB. So on the Banking Tab, the transactions from these accounts will feed in. All the transactions that are purchases of raw materials or items for resale, just add the vendor and choose the Cost of Goods Sold category. That's it! Super easy.
Hi Sarah! Your videos are insanely helpful for getting started with QBO. Would you recommend this manual entry method over the option to sync Amazon directly to QBO as a sales channel? (and same question for the option to sync Shopify as a sales channel?) Trying to decide which route to pursue, which will be cleaner/easier/etc. I will definitely follow this method for Etsy, as the sync with etsy app for some reason isn't working in my account.
I would recommend my method over linking directly. I had a client link directly, and non of the information brought over made sense or would allow the business owner to tie to the 1099 at year-end. Especially if you don't know what SHOULD be happening in your bookkeeping when you use an integration, then I recommend skipping the integration and just doing my manual entry because it's so easy!
Hi Sarah, thank you so much for this video. Is there any chance you could create some eBay videos for journal entry using eBay statements they provide? If you need some data help for you video please let me know I can share with you some statements for the video.
I have actually tried to use the eBay reports to do a similar journal entry, and the reports were not very easy to use. So now, if I have a client selling on eBay, I use A2X to help with their bookkeeping. Here is a link to that video: ruclips.net/video/xTVwroHFJD0/видео.html
Hi Sarah, Thanks for both great videos on how to record Amazon. On this video at 12:05 I see "Amazon" under Vendor/Customer field. Should I create Amazon as Customer or Vendor or both?
I create Amazon as both a vendor and a customer, but you have to use a slightly different name for each.
@@SmallBusinessSarah Thanks for your VERY quick response. So, if I create "Amazon (c)" customer and "Amazon (v)" vendor, when should I use which one? Do you have a video or writing to explain more in this regard?
@@farhadraeisi9480 If you purchase items from Amazon, supplies and things like that, use vendor. Use customer for the deposits from Amazon, your payouts from the items you sold.
Thanks for your video! It was very informative! What about adding inventory? Does that need to be done in Quickbooks?
I record all inventory purchases directly to COGS rather than try to track inventory in QB. This is just a quicker and easier approach, and usually inventory information is available in other places, like your seller dashboard.
Thank you for this video. It really helped me. One question, you said to combine shipping credits and shipping credits refunds and put it in credit or is it to minus shipping credit refunds and input in credit?
Because of the way the 1099 is set up, I now do a separate line item for the credits and the refunds. I do separate lines for shipping credits and refunds, promotional rebates and refunds, and gift wrap credit and refunds.
@@SmallBusinessSarah Thank you, for knowledge. I will do the same too 😊
Thank you..😊
Welcome 😊
Hi Sarah, thank you for creating these FBA accounting videos. I downloaded the monthly payment summaries as you described and compared them to the 1099-K from Amazon and some of the numbers still do not match. I have 7 months where the numbers match exactly, 4 months where the Product sales are slightly off and everything else matches, and 1 month where none of the numbers match? Do you have any ideas where the discrepancies are from? I don't understand why Amazon's monthly payment summary reports don't match up the monthly line items on the 1099-K. Should I just use the numbers from the 1099K instead?
I agree, it seems like the 1099 should match their own summaries! Sometimes it can just be a timing difference. I wouldn't make adjustments month by month, but just make a total adjustment at year-end to tie out to the 1099. It probably won't be a significant adjustment that has to be made.
Thanks for the video! How do you calculate net profit as some amount is kept by Amazon?
Use your Profit & Loss report to determine your overall business profitability.
Thank you for this video, it is so helpful! Could you please clarify in the months where expenses exceed income. When moving the seller repay to Amazon Holding is that a deposit or as an expense? In the Amazon Holding bank register is it under the payments or deposit?
In the Amazon Holding register it will show up in the Deposit column.
Hello Sarah, great video! I have a question. Amazon reports the sales tax collected as if it was income in the 1099-k. How do you treat this inflated number when filing federal taxes? Should we report it as income and then deduct it as an expense? It's interesting because other marketplaces don't include the collected sales tax in the 1099-k, but Amazon is always special...
Hi Diego, yes you should report the full 1099 figure that includes sales tax, but then you should deduct that amount as an expense. You are right on the money!
Very awesome video! Thanks for your help! I have two questions. I appreciate it if you can tell me where the number Amazon Sales $3355.45 can be found in the Amazon report and which numbers add together get the total Amazon other selling fees $808.72 in the journal entry.
$3,355.45 is the sum of the non-FBA and FBA product sales. $808.72 is the sum of all the fees except shipping and advertising.
as a canadian seller that collects and submits gst/hst, where do i make the entries for that in QuickBooks journal entries.
I am not familiar at all with Canadian tax, but if you have a positive tax number in the bottom right corner, I would categorize that as a Credit to a Sales Tax Payable account (or GST Payable if that's what you call it).
Hi Sarah, Excellent work explaining the holding balance. I am one year in into selling and this will be my first year filling. I just started using QuickBooks online also. However, last year I maintained a spreadsheet of all my accounting and strictly used my business account for expenses and incomes. The problem is that the amount in my checking account, as deposited by Amazon, and the amount on 1099K and the amount on statement summary for the whole year do not match. I cannot reconcile them.
Did you watch this video: ruclips.net/video/0Ze8mduCDHk/видео.html
@@SmallBusinessSarah Yes, this is the video that I watched.
May I consult you on this difference, do you offer such a service?
So I did this method for the whole year and was excited to have it match up to the 1099 my client just sent me...it doesn't! My numbers in QBO match exactly to the amazon monthly summary reports and it was nice every month that my P&L numbers tied out to the monthly summary report. But then why is the number different on 1099??- Are the monthly summary reports not the same number on the 1099 for each month? What am I missing?
A couple things. Did you look at page 2 of the 1099 where everything is broken down? Plus I found this year I neeed to break out the shipping credit refunds and promotional rebate refunds, instead of netting them. Third, Amazon sometimes amends a monthly summary, you may need to rerun it. Fourth, Amazon includes sales tax in the 1099 that is not income to the client.
Just sharing my experience - I also did this method for whole year, Interesting -to match P&L total income with unadjusted gross sales on 1099K - ( add sales tax, refunds and subtract other credits to total income reported in P&L (these are not listed on 1099k from ) then it matches .
@@SmallBusinessSarah Thanks - I didn't realize there was a page 2 on the 1099 - this solves it perfectly. I see my numbers are right on my P&L when I look at those columns - and then now i understand how they add and subtract the other numbers now to reflect the total on the 1099. And yes - I see what you mean on the promotional rebate refunds and credits - I also netted them so the numbers seemed off at first - but once I opened up the reports I see the 1099 is just using the credits line on the shipping and promotional and not the refund part
@@teenup72 Yes this makes sense - I also didn't realize there was a page 2 on the 1099 and it also helps me figure out the calculations
@@katiolson688 yep, you got it. In past years I don't remember the shipping and promotional rebates, being broken out separately, so that's why I don't show it in the video. But going forward I will show those amounts gross and not net. Gotta love page 2 of the 1099. I wish all companies provided such a detailed break out.
Hi Sarah! Thank you so much for your guidelines, Can you please tell me how to record "charges to credit card" under the Transfers section. Thanks
You should see that charge from Amazon in the bank feed of your checking or credit card account. Simply categorize that charge also to Amazon Holding.
Hello Sarah. I have a question about the Journal Entry.
What if I am paying my Amazon Ads with my credit card? Should I include them when I do the Journal Entry from the Monthly amazon report or should I ignore the Cost of advertising and just register the credit card payment so that it is not duplicated?
Please let me know your thoughts and thanks so much for your time, support and amazing videos!
From what I can tell, Ads can be charged either through the summary report, billed separately, or both! Maybe this is due to different Ad types? Not sure. If Ad expense appears in your summary, then include it in your JE. If Ads are charged separately then go ahead and categorize them directly to an Advertising Expense account, and do not include them in your journal entry.
@@SmallBusinessSarah Ok, it is clear now, you are the best. thanks so much!
If you wanted to update your stuff more often like twice a month or every week can you do the same thing and just set the dates on the summary payment statement for the dates that you want to run the report for,,,,
Yep you could.
This is a very thorough video. Do you actually have a bank account with Amazon? In the video you took the transaction in the bank feed and pointed it to Amazon Holding which is a bank account. I am kind of stuck on this detail trying to understand it. So did the money actually transfer out of Amazon to your regular business bank account? And by pointing it to Amazon Holding account it cleared your regular bank register to reconcile? but instead of pointing it to an income account you temporarily placed it in a bank account even though it technically isn't a real bank account? Thanks!
Yes, you've got it! Amazon Holding is just that, a holding account. I set it up as a checking type account in QB, but it's not really a checking account. When the deposits enter the bank feed, I categorize them to Amazon Holding. Then the sales and fees are later parsed out of this account via the journal entry.
@@SmallBusinessSarah thank you for the information. It's really helpful. I've watched several videos today. You give a very thorough demonstration.
Thank you Sarah, excellent video and just want I was looking for. I do have a question though. I have entered my Amazon statements from April and May following your instructions and my Amazon Holding account is negative $800+. Is this correct, it seems wrong to me!
Amazon Holding will go negative during the month, and then should be positive once you post the monthly journal entry. If it is negative after you post the journal entry, then something has gone wrong. Possibly a beginning balance issue?
Thank you Sara for this info.
If I sell on different amazon marketplace for example amazon US and UK how about currency sell globally
This is how I handle that. It gets the figures close, and then I can adjust at the end of the year when I receive 1099s. Each Amazon country "shop" has it's own summary report. So for the shop in a different currency, I pull up the summary report as usual and look at the amount transferred to my bank account in the lower left corner. That amount will be in the foreign currency. I compare that amount to the actual amount I received in my bank account, in my native currency. I use this information to calculate an average exchange rate for the month. Then I apply that exchange rate to each line of the amazon summary report and create my journal entry as usual after applying the exchange rate. As I said, it's not completely precise as it uses an average exchange rate for the month, but it will get you very close. Hope that helps!
subsribed! thankyou for this. 😊 however, we seem to be missing the COGS portion when going for the final profit /loss figures and i believe this is important. 🤔
Any products you purchase for resale will come through your bank feed if you have your bank or credit cards connected. Categorize all purchases for resale or raw materials as cost of goods sold. For tax purposes you will have to do an end of year inventory count.
@@SmallBusinessSarah Thankyou for this input! This makes things a lot easier but also comes at the cost of overstating/understating monthly P/L depending on the timing of invertory purchases. Unless the selling price for the items are fixed at a specific markup, say 150% of product cost. Are we allowed to make a journal entry using this?
What i mean by this method is that we divide the gross sales by 150% to get the COGS. is this possible? then any difference that would show up on the year end, we do a adjusting journal entry.
@@samirthevirtualbookkeeper the method I mentioned is the Cash Basis of Accounting. Most small businesses select this method. You are right though that the Accrual basis of accounting matches revenue with the related expense. The Accrual basis must be used by larger businesses, but it is more difficult to be implement. Truth be told, most small businesses end up with a mix of cash and accrual bookkeeping, which is okay. If making a monthly adjustment to inventory and COGS is something you want to do, then go for it!
@@SmallBusinessSarah This is noted! Thanks a lot for the time and for the response. I would definitely go for the cash basis for now as it is way easier. 😁
What about the "Transfers" section in bottom left? How do you book entry for deposits from Amazon? Dr. Cash Cr. Amazon Holding? and what about the charges to credit card? Do you also run that through Amazon Holding - i.e. Dr. Amazon Holding, Cr. Accounts Payable/Cash?? Thanks so much!!
The transfers section is the total deposits to checking from Amazon. We already categorized those to Amazon Holding from the bank feed. And yes, if Amazon charges your credit card (also outlined in the transfers section) categorize that to Amazon Holding as well.
Thank you for this video. I just a question. Is Amazon holding the same as Accounts Receivable?
The ending balance in Amazon Holding, does represent the amount of money Amazon owes you, so yes the ending value is basically like an Accounts Receivable. I don't use an Accounts Receivable account type because the register for that account type is weird in QB!