I use Inventory Lab for my bookkeeping on Amazon. I've been using it to keep track of eBay and Walmart sales and fees as well but it is really meant for Amazon since it automatically grabs all your sales, commissions and all your fees. Inventory Lab saves me hours of time. I literally wouldn't be able to do my business without some sort of service and Inventory Lab works for me. It's not perfect as I will show but it is essential for me.
More information about Inventory Lab
Inventory Lab provides a taxes checklist of what you need to do before you can properly use their service for tax purposes. They are all correct but I will add one more as well.
1) Make sure your buy cost is entered for every sale. If you don't enter a cost for a $100 sale with $20 fees, it will look like a $80 profit when you paid $70 for the item. You don't want to pay taxes on phantom profit.
You can easily find which sales have no buy cost associated with them by going to Accounting>FBA Sales. In "Advanced" change buy cost from "All" to "Has No Buy Cost". Also change the time frame from "within the last month" to "within the last year" or "all" if you want to go back further than that or if you don't do it now.
2) You can run a report that will tell you your unsold inventory valuation at the end of the year. You don't need to do that now if you have Inventory Lab but you will need to change the date to 12/31/2016 if you don't do it today so just pay attention to that.
You can find the report under Reports>Inventory Valuation. You can change the date to whenever you would like.
3) One thing that's a bit annoying about Inventory Lab is that they automatically default your returns either to defective or sellable. They don't mark your returns in the correct disposition which they should be able to do automatically.
If you sell an item for $100 that costs $70 and then it is returned in sellable condition and you sell it again, if you have Inventory Lab default your returns to defective when you sell it again they will assume COGS are $70 again. That's not true, your COGS are $0 for the second sale since you already accounted for the COGS in the first sale and return. Your profit will seem artificially low.
If you set your default to sellable Inventory Lab will offset your sale of that item and assume COGS of $0. If the item was defective and you had to send it back home, you never should have received that compensating credit so your profit will seem artificially high.
Bottom line is that you need to change your returns to the correct disposition.
I personally choose the default to be defective since I find most of my returns are in defective dispositions and that means when I change it I will have more profit than before. That's always a nice change. I don't like seeing my actual profit go down later. I know it's all psychological but that's how it affects me.
4) Double check your reimbursements. This is not in their checklist. I have been looking through my reimbursements and they are way off in multiple areas.
If I receive an additional reimbursement after an appeal sometimes they will assume that it is connected to a new unit. For example, if I received a $20 reimbursement for a $10 item, Inventory Lab will show me a $20 reimbursement with $10 COGS and $10 profit. That's true so that's good. If I appeal the reimbursement and get another $5 for that same reimbursment sometimes it will show a $5 reimbursement with a new COGS of $10 which is a loss of $5 separate from the first reimbursement. That's not true and not good at all. I received an extra $5 for that original $10 so it is a $15 profit on one unit not $15 with COGS of $20 over 2 units.
In addition, sometimes there will be no buy cost associated with a reimbursement such as a warehouse damaged when there should be. I have one item where it looks like I got a $285 profit but it was really actually a $15 loss. That's a major difference.
Again, it might make you feel better about your numbers but you don't want to pay taxes on profit you never made. That's just dumb.
More information about Inventory Lab
Inventory Lab provides a taxes checklist of what you need to do before you can properly use their service for tax purposes. They are all correct but I will add one more as well.
1) Make sure your buy cost is entered for every sale. If you don't enter a cost for a $100 sale with $20 fees, it will look like a $80 profit when you paid $70 for the item. You don't want to pay taxes on phantom profit.
You can easily find which sales have no buy cost associated with them by going to Accounting>FBA Sales. In "Advanced" change buy cost from "All" to "Has No Buy Cost". Also change the time frame from "within the last month" to "within the last year" or "all" if you want to go back further than that or if you don't do it now.
2) You can run a report that will tell you your unsold inventory valuation at the end of the year. You don't need to do that now if you have Inventory Lab but you will need to change the date to 12/31/2016 if you don't do it today so just pay attention to that.
You can find the report under Reports>Inventory Valuation. You can change the date to whenever you would like.
3) One thing that's a bit annoying about Inventory Lab is that they automatically default your returns either to defective or sellable. They don't mark your returns in the correct disposition which they should be able to do automatically.
If you sell an item for $100 that costs $70 and then it is returned in sellable condition and you sell it again, if you have Inventory Lab default your returns to defective when you sell it again they will assume COGS are $70 again. That's not true, your COGS are $0 for the second sale since you already accounted for the COGS in the first sale and return. Your profit will seem artificially low.
If you set your default to sellable Inventory Lab will offset your sale of that item and assume COGS of $0. If the item was defective and you had to send it back home, you never should have received that compensating credit so your profit will seem artificially high.
Bottom line is that you need to change your returns to the correct disposition.
I personally choose the default to be defective since I find most of my returns are in defective dispositions and that means when I change it I will have more profit than before. That's always a nice change. I don't like seeing my actual profit go down later. I know it's all psychological but that's how it affects me.
4) Double check your reimbursements. This is not in their checklist. I have been looking through my reimbursements and they are way off in multiple areas.
If I receive an additional reimbursement after an appeal sometimes they will assume that it is connected to a new unit. For example, if I received a $20 reimbursement for a $10 item, Inventory Lab will show me a $20 reimbursement with $10 COGS and $10 profit. That's true so that's good. If I appeal the reimbursement and get another $5 for that same reimbursment sometimes it will show a $5 reimbursement with a new COGS of $10 which is a loss of $5 separate from the first reimbursement. That's not true and not good at all. I received an extra $5 for that original $10 so it is a $15 profit on one unit not $15 with COGS of $20 over 2 units.
In addition, sometimes there will be no buy cost associated with a reimbursement such as a warehouse damaged when there should be. I have one item where it looks like I got a $285 profit but it was really actually a $15 loss. That's a major difference.
Again, it might make you feel better about your numbers but you don't want to pay taxes on profit you never made. That's just dumb.
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