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Should you track Amazon inventory in QuickBooks Online?

February 13, 2020

Hi, I’m Veronica Wasek with 5 Minute Bookkeeping. And I help creative
online sellers to setup, organize and streamline
their financial systems. Whether you’re looking for DIY, done with you, or done for you financials. Today, I’m talking to my Amazon sellers. Should you track your Amazon inventory in QuickBooks Online? Let’s find out. (playful music) So should Amazon sellers track inventory in QuickBooks Online? The answer is, yes and no (laughs). Yes, because you do want
to track the inventory cost in QuickBooks Online, but no because you don’t want to track all of the details of
inventory in QuickBooks Online. And I’ll talk about what I mean by that. The inventory functionality
in QuickBooks Online, is not meant for eCommerce sellers. What you see in QuickBooks
Online in terms of inventory, is really specific to
distributors and wholesalers, and these are businesses
that are invoicing customers for inventory sales. Now being an Amazon seller
or an eCommerce seller, you don’t invoice your
customers for sales, because they’re buying
directly from Amazon or other sales channels. Also, the functionality
in QuickBooks Online inventory is very limited. And, so even if you wanted
to try to track inventory, the functionality is limited, it really doesn’t allow
you to do a whole lot beyond just very basic inventory. And again, not for eCommerce sellers. One of the biggest mistakes
that my Amazon clients make, is that they’re trying to
setup inventory in QuickBooks. And let’s go ahead and take a look and see what they’re trying to do, and what I’m trying to explain here as far as what you shouldn’t be doing. All right, so I’m in the
products and services list in QuickBooks Online, and as
you can see if you go to sales, and then products and services, that you have the ability
to setup inventory items in QuickBooks and to even track sales price, cost, quantity on hand, and you would think initially like, “Hey, this is great.” However, this doesn’t talk
to your Amazon account, and as I said, it’s not
really meant for you as an Amazon seller. So, most of my clients are
going in here to QuickBooks, and then setting up
all of their inventory, and they’re realizing that
they shouldn’t have done that. Takes a whole lot of time to set it up. It gets messed up, then you don’t know how to fix it. So, avoid all of that. Don’t attempt to setup
the inventory detail. So the actual products one by one in the
products and services list in QuickBooks Online. So what do you do then? How do you get that inventory
into your QuickBooks, because we do want to see a clear view of the profitability
of your Amazon business. So we do need to track
inventory and cost of goods. And the way that I recommend to then enter that inventory
cost into your QuickBooks, is to use a journal entry. Ideally, you want to track
your inventory totals once a month. That would give you the most clarity into your profitability,
but if that’s not workable, once a quarter and at the
very minimum, once a year, because you do need that
ending inventory amount and totals for tax purposes. In a future video, I’ll show you how to
make the journal entry, but for now just understand that you need to enter a
total amount of inventory in your QuickBooks
instead of trying to setup all the details of the
inventory in your QuickBooks, as I just showed you. So then how do you track inventory? I’ll do another video on this, but very quickly you
can use Inventory Labs. If you’re an Amazon only seller, then you can use Inventory Labs to track the details of
all of your inventory, and that is made to work
directly with Amazon. If you’re not using any inventory apps, then you can download my
free inventory worksheet, and use that to track your inventory. And I’ll link that in
the description below. But basically you would use a spreadsheet to track all of your SKUs, descriptions, quantity, purchase price, and the total, and then pick up this total cost. And that’s the amount that
needs to go in your QuickBooks. I’m Veronica Wasek with
5 Minute Bookkeeping. If you’re ready to let an experienced and reliable financial pro help you with your Amazon accounting, check the description box below to learn more about my services and how we might be able to work together. I’m here to help you guys. If there are any topics that you want me to cover in the future, make sure that you leave
me a comment below. And if this content is helping you, make sure that you leave
me a comment, like, share, and subscribe to this channel so you can get all of my latest videos.

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