Like all business owners, Amazon marketplace sellers make dozens of decisions every day. Some are small and inconsequential, while others will affect the business for years to come.
One of the more significant decisions is choosing an accounting system – or, more specifically for those already operating in the cloud, choosing between Xero and QuickBooks Online. These are the best-known, most widely-used cloud-based accounting systems, and most Amazon sellers will choose one or the other. Each has pros and cons depending on the scope of your business, and personal preference.
But it’s not quite as simple as choosing a single system to suit your business – you also need to consider the wider ‘ecosystem’ of connected applications and work out how well they fit with your business.
A2X is one example of an application that you would connect to your cloud accounting system. A2X was first launched with support for Xero, and it now connects with QuickBooks Online as well. For QuickBooks accountants, this is a game changer.
Starting at Xero
A2X’s Amazon accounting automation is now available to you whether you do your accounting with Xero or QuickBooks, but that doesn’t mean there is no difference between the two cloud accounting systems.
Xero is the number one cloud accounting system in Europe and Australia, and is becoming better known in the US. It’s known for its elegant multi-currency handling, and its ability to cope with VAT, which makes it a good choice for your business if you’re selling in more than one currency, or through the Amazon Europe marketplaces.
Xero was designed to be used by business owners as well as accountants, which may make it a better choice if you want to manage your own accounting.
Marilyn Parham, of The Bottom Line CPA which specializes in cloud-based accounting, puts it like this:
Xero started in the cloud, and I feel like technologically, they’ve been way more aggressive in designing for the non-accountant. The user interface, user friendliness of the product is clearly evident.”
Working with QuickBooks Online
QuickBooks Online is the flagship cloud accounting offering of US-based Intuit, and has a large following in the US. Most US accountants know and understand QuickBooks, so if your business is working in the US, you may end up using QuickBooks by default as your accountant’s preference.
Although QuickBooks Online has in the past been criticized for being buggy and difficult to use in comparison with Xero, it is catching up. Now that A2X includes support for QuickBooks Online, accountants and Amazon sellers who currently use QuickBooks will be able to add a new tool to their ecosystem of apps, saving time and improving accuracy.
Iona Bird, an Australian accountant working primarily with Amazon sellers and other online retailers, uses both Xero and QuickBooks. She says that although Xero is more popular amongst her clients, both accounting systems have their followers.
I’ve got clients who are QuickBooks through and through, and it really suits their business.”
A2X and Amazon
Regardless of the accounting software you choose, with just the accounting system on its own, it’s not easy to account accurately for Amazon marketplace sales. Sellers who do their own accounting often find it difficult to reconcile the information Amazon sends – taxes, fees, and variations in currency and exchange make the whole process very complicated. At anything beyond small transaction volumes, it can be near impossible to reconcile Amazon sales with incoming money each month.
Even specialist ecommerce accountants can find Amazon accounting difficult to manage.
That’s where A2X comes in. it takes the barrage of confusing data from Amazon’s systems, makes sense of it for accounting purposes, and posts it into Xero or QuickBooks Online. From there, the accounting system takes over. It’s about automating time-consuming processes, so you and your accountant have more time to spend on your business strategy.
Jeremiah Kovacs, of cloud accounting firm MuseMinded, explains the difference A2X has made for his business – and it’s significant:
A2X streamlined one big section of our process and made us really efficient. It made it really simple to serve our clients, so they felt there was huge value there. Our clients knew there was a lot going on and it was pretty complicated, but here we had this tool that was pretty much doing magic for us.”
Find out more about using A2X to streamline your Amazon marketplace accounting.