Most Amazon Sellers would rather do anything other than do their own bookkeeping, but they desperately need accurate numbers to make business decisions. Keeping clean records is crucial to e-commerce companies’ long-term success because of the implications it has for scaling and selling the company. Nathan Hirsch went through the same experience as an Amazon Seller and he’s warning everyone from making the same mistakes he made. You’ll learn about the bookkeeping options available to your company, how to vet a bookkeeper, and how your monthly numbers can drive your company’s success.
Takeaways:
- When you make business decisions based on your numbers every month, you can scale your Amazon business immensely. In order to know your numbers, you need to keep up-to-date, accurate records at all times.
- You cannot entrust your bookkeeping to a CPA, their primary goal is to file as many tax returns as possible. Because of this, it’s imperative to have someone else handling your bookkeeping who can actually spend time trying to help grow the company.
- For e-commerce companies, it’s critical to use an accrual-based system, not a cash-based system, for their books. Awareness of the balance sheet is also vital.
- There are two reasons entrepreneurs should not do their own bookkeeping. Firstly, it’s not a good use of their time, they should be focused on growing the business. Secondly, they are not bookkeeping experts and the mistakes they make will cost them.
- You need to vet your bookkeeper very carefully. Try to find someone who is already familiar with e-commerce companies. Avoid those that want to do everything manually, because the volume for e-commerce companies requires automation.
- Entrepreneurs need to have a plan for their bookkeeping and inventory management systems before they ever ship a single product.
- To avoid issues during due diligence when selling your company that could endanger the sale of your company, you have to keep clean books from day one.
Quote of the Show:
- “One way or another, you're going to have to pay for bookkeeping. My advice is to just do it right from day one” - Nathan Hirsch
Links:
Shout Outs:
- Joe Valley - Co-Owner of Quiet Light Brokerage
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