Amazon accounting in 2023 – getting it right as an FBA

Aug 31, 2023 | Business

What’s important to get right in your Amazon accounting in 2023? In today’s article, we’ll cover what ‘good’ looks like as a Fulfilment by Amazon (FBA) business.

Selling on one of the world’s largest platforms as an FBA can mean 35% more sales uplift than on other ecommerce selling sites. This represents a lot more business and, therefore, more money.


What is an FBA business?

FBA is an extensive network of sellers operated by Amazon. When a sale is made, Amazon picks up, packs, and ships the goods to the customer from a merchant’s fulfilment centre.

FBA can help Amazon sellers reach wider audiences and scale their businesses. It’s access to a global stage, where your product can reach people worldwide.

FBA is designed to support logistics, make customer service better, encourage international sales and make inventory and customer returns a much simpler process.

Of course, there are fees with fulfilment by Amazon FBA — inventory storage fees, fulfilment fees and other occasional fees incurred case-by-case.


Do I pay taxes?

If you earn money through Amazon FBA sales, you will need to pay tax on your income in the same way you would with any other business.

You must report these earnings to HMRC through an annual self-ssessment tax return (if you’re a sole trader) or company tax return (if you’re a limited company) and pay income tax or corporation tax, respectively.

If you earn less than £1,000 a year in trading income, you could qualify for a tax exemption under the trading allowance.

Having the right accounting systems in place is vital to paying the right amount of tax, just like any other part of business.


Do I need a business bank account?

Technically, you don’t need a separate bank account to sell on Amazon business, but any expert would advise separating your business finances from your personal.


What do I need to sell on Amazon?

To get selling on Amazon, we’d recommend you read our most recent article: Selling online: our Amazon business accounting guide — it goes through what you need to do to get your accounting right from day one in detail.

Why is accounting important as an Amazon seller?

Accounting should be an integral part of any company’s operations, not just ecommerce businesses or Amazon sellers, for many reasons. Having a solid system in place for recording your financial information goes a long way.

Amazon FBA accounting is simpler than normal ecommerce accounting, thankfully, due to the long list of integrations and connections you can make to cloud-based accounting software.

Small businesses and sole traders alike should follow accounting best practices for their ecommerce business. That means:

  • Staying on top of your tax returns
  • Maintaining tax compliance
  • Monitoring and maximising your cashflow
  • Managing your stock and inventory
  • Fostering healthy relationships with your suppliers
  • Always looking for areas of growth

Whether it’s through a dedicated expert or you do it yourself, getting your accounting process down will make running your business easier.


Get support from a professional

Business owners have little time to slow down in 2023, especially in a fast-moving job like selling on Amazon.

But operating as an FBA business can be beneficial for many reasons, not least because it opens you up to a much wider market.

If you’ve got any questions, need more support or want to know how to get started, we’re experts in helping businesses make the most out of their Amazon seller account.

Get in touch to discuss how we can help you with our Amazon accounting services.

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