Bookkeeping: No Longer the Bane of a Booming Amazon Business!
The story of how one Amazon seller used A2X to solve his bookkeeping issues and to prepare his business for a successful sale.
For Nick Losciuto, the boom in his Amazon sales was becoming a double-edged sword.
Just before he sold it this year, Nick’s business, Compatible Parts, was processing tens of thousands of orders every month – with turnover in the millions of dollars.
That was great news, except when it came to keeping his financial books tidy. It’s a familiar problem for anyone selling through Amazon marketplaces. When Amazon’s fees and charges are deducted from each order, and cash is received in lump sums, reconciling your books manually (and getting that all-important accurate business oversight) can become prohibitively time-consuming.
“Bookkeeping was tying up way too much of my time – time that could have been spent on much better things.”
- Nick Losciuto
On top of this, a lack of accounting support and expertise in Amazon made getting better organized seem almost impossible.
“As we grew, it became much harder to do manual accounting. You end up needing a large staff just to do accounting! There wasn’t a lot of experience amongst accountants or CPAs, and Amazon was also reluctant to provide us with much info on how to organize and to get everything accounted for.”
Like Nick, most Amazon sellers are left to develop their own bookkeeping processes. And for many, this is the first time they have come across business accounting.
Aside from becoming an obstacle to good business oversight, the unreconciled books caused huge issues during tax time.
While Nick had been keeping tidy books manually, as the business grew, he needed an automated solution. An IT project with a software company to automate the Amazon accounting process had failed, going over-budget and well over-time, leaving Nick ‘in a hole’.
“We had been counting on that accounting integration project, and when that failed we were back to zero. We needed to compile all our accounting together to do our taxes, and to find out our gross margins. It was a lot more guessing than having actual numbers.”
Finding A2X Was “A Relief”
After a bit of trial and error and searching, Nick came across Xero and A2X.
After an initial test run, Nick was astonished at A2X’s simplicity. He plugged in his Amazon account, did some basic set-up and was able to start transferring Amazon information into his financial system right away.
With A2X, Nick had loaded all his information into Xero within just a few days. It was a complete contrast with the previous software company Nick had been working with, which had spent six unsuccessful months trying to complete this same process.
“I’d had such little luck and hadn’t seen anything good out there, I was wary of trying it. That made me even happier when I did!”
Simplicity is Key
Nick says the value of A2X is in its simplicity.
It transfers all the necessary Amazon transaction information without all the extra work.
He also found it very organized, with easily customizable fields. To Nick, achieving proper accrual accounting for his Amazon business had begun to seem impossible – with A2X it he’d “finally figured it out”.
“It was a relief. A2X is much, much easier than the other systems we were trying to use, so I was pretty surprised! It all worked seamlessly.”
Both Nick’s accountant and bookkeeper were new to Xero and A2X, but the simplicity of the system meant that this was no barrier. Nick says he was able to coach them through the basics.
After just a month, Nick was able to hand his Amazon accounting over to them entirely, freeing him up from time-wasting manual bookkeeping for the first time in months.
“After the first month of working out the details, they were able to take over and manage the data themselves. I didn’t have to touch it.”
Selling Your Amazon Business With Untidy Financials? No Deal.
Finding A2X was timely, since Nick was preparing his business for sale. Tidy, transparent books, he says, are an essential part of attracting the right buyer for your business - as well as the best valuation.
“The institutional investors and private equity firms – they pay the best prices – are looking for very organized books. They don’t have the time to go through your books and investigate the surprises they’d certainly find.”
Even if you’re not looking to sell your Amazon business, Nick suggests that getting the accounting side of things organized is “foundational” to long term success.
“A lot of people selling on Amazon are so much more concerned with sales and marketing, and they can let the accounting side get sloppy – A2X is a good tool for anyone looking to change that. “I would absolutely recommend A2X – I hope the word gets out there more, so other people like me wouldn’t have to spend as much time as I did looking for a better way to do my Amazon accounting.”
Try A2X for Free Today
A2X supports sellers on Amazon, Shopify, eBay and Walmart so whatever your platform, you can benefit from its features.
Also on the blog:
Want to feel completely confident in your ecommerce bookkeeping?
Businesses that document their processes grow faster and make more profit. Download our free checklist to get all of the essential ecommerce bookkeeping processes you need every week, month, quarter, and year.Download it here