3 Steps to a Smoother Year-End

3 Steps to a Smoother Year-End

Here is your three step year-end to do list:

1. Generate report of unsold inventory held by Amazon at 12/31 (It is NOT necessary to do this at the stroke of midnight on New Year's Eve.) 

2. Reconcile your 1099-K to your Annual Sales Report from Amazon.

3. If you use InventoryLab, reconcile numbers in InventoryLab to the data above (because these numbers will be going into your tax return and it is crucial that you understand and document any differences between InventoryLab and Amazon).

Amazon 1099-K Explained

Amazon 1099-K Explained

It's important to understand who will receive a 1099-K, what it is for, and how you use it as part of your year-end process. 

WHO:
You will receive a 1099-K from Amazon (and any other entity that processes payments for you like PayPal or a bank if you receive credit card payments directly) if you have over $20,000 in payments processed (not product sales) AND over 200 transactions for the year. 

If you do not receive a 1099-K this does not mean that you do not have to report the income or that no tax is due. There are levels below which no income or self-employment tax is due but they are based on your entire tax picture for the year, not just your Amazon sales. If you are not sure about the taxability of your Amazon income it's best to speak with a tax professional.

Why the Balance Sheet Matters

Why the Balance Sheet Matters

Balance Sheet 101 - Why a balance sheet matters to YOU, the e-commerce seller.

One disconnect I often see with e-commerce sellers and their accounting is not understanding the relationship between cash, inventory, debt and net income.

Sellers can usually tell you how much money they have in their checking account and a pretty good guess at net income, but that's about it.

It's really important to see the big picture and understand how all of these components interrelate in order to manage your business effectively. Insert --> Balance Sheet. This important business tool will help you do just that.