The Fundamentals of Bookkeeping for Amazon Sellers

Isaac Smith and Jason Snider are the Co-Founders of Summit eCommerce. They combine their knowledge of selling online with bookkeeping to help sellers understand their numbers and what they mean.

Not all sellers have an accounting or finance background and bookkeeping can easily become an overwhelming task as your business grows if you don’t understand it from the beginning.

That’s where Summit comes in.

In this interview, we discuss:

  • Fundamentals of bookkeeping for Amazon Sellers and sellers of other platforms
  • Bookkeeping is not just for taxes Other uses for bookkeeping
  • Making better decisions to grow your business 
  • Having the financial clarity of what’s happening in your business
  • Biggest mistakes in bookkeeping that prevent your business from moving forward With examples!
  • How to avoid bookkeeping mistakes 
  • Why weekly audits are a good decision 
  • What do Amazon Sellers need to focus or think about when doing their bookkeeping?
  • The main 3 reports that you should know about 
  • PNL is essential, but it’s not the only indicator
  • Income and expenses 
  • Returns and revenues in different categories
  • Why it is wise to use a system for bookkeeping
  • Income
  • What is a Cost of Goods?
  • Inventory
  • Expenses
  • What is a balance sheet and what you’ll find in it 
  • How you should think about inventory 
  • Problems that may rise from not having a good understanding of your balance sheets
  • Understanding your sales 
  • How does the Cash Statement fit into everything?
  • Why Cash flow is where most businesses get into trouble 
  • How to calculate if you have enough profitability
  • Inventory-funded businesses
  • Making an accurate forecast 
  • When to do a blended forecast
  • How Inventory and Cash relate 
  • Inventory management and KPI recommendations
  • What habits sellers should develop for bookkeeping
  • How many KPIs you actually need 
  • How to calculate your gross profit and how to distribute it 
  • Best practices and recommendations 
  • How can Amazon sellers know how much to pay themselves to make an accurate forecast?
  • Get a personalized plan 
  • Conversations you should have with your tax advisor
  • Profit first methodology
  • How Summit can assess you in bookkeeping practices