A2X is a software plugin that integrates your Quickbooks (or Xero) cloud accounting system with Seller Central. In this article, we take a deeper look at how A2X works, why growing Amazon businesses should consider using A2X and what it takes to get set up.
A2X then uses this information to create invoices or journals for each settlement and posts them to your cloud accounting system - either automatically or at your command. You can then select the ledger accounts and tax rates that apply to each type of transaction. A2X allows users to configure sales by SKU or product type, and to group all sales together, or to configure it by country.
When settlement payments arrive in your bank account, it is easy to reconcile them with the A2X settlement postings with just a few clicks.
“I am very happy with our A2X subscription. The app saves me hours of work every month because it integrates seamlessly with QBO. Once you are able to set it up to do what you need to do, you don’t have to worry about posting or analyzing your Amazon FBA sales and settlement. A2X does this for each payment from Amazon.”
This creates untold headaches for sellers and their accountants. When this is the case, A2X separates the transactions for each month and posts them as two sets of entries – making it easy to compare your Amazon sales information from month to month and year to year.
A2X is compatible with 11 Amazon marketplaces around the world and can handle all the local currencies in these areas. More specifically, these marketplaces are:
A2X can also calculate your FBA stock value, cost of goods sold, and provide reports on where the inventory is located. For US and pan-European FBA sellers, this information is vital for determining where you have sales tax nexus.
To account for sales on the Amazon platform, merchants and their bookkeepers often record the Amazon settlement payments as sales revenue. However, this only paints half the picture… There are 2 common ways that people do this without using A2X:
By using A2X, sellers can feel comfortable knowing that their financials are accurate, organized, automated and reflect the reality of what’s actually going on in their business.
By using the accrual basis of accounting, sellers are able to make more accurate comparisons between various time periods and sales channels.
As an added bonus, if you ever decide to sell your Amazon business, the accrual method will provide potential buyers with a much better idea of the short term assets and liabilities that they are considering whether to purchase. Due to the fact that Amazon pays merchants after the sale has been made, the accrual basis tends to result in larger net profit figures (and therefore a higher valuation).
By removing the possibility of human error, potential buyers can feel at ease knowing that rigorous systems are helping to create an accurate set of accounts.
At this stage, you might be wondering what it takes to set up A2X in your business…
It’s as easy as that!
A2X can easily solve this problem by importing the Amazon settlement history and generating a set of accounts that are easy to reconcile with payments received.
Integrations like A2X are helping to simplify business operations. In the coming years, we are likely to see the ‘API economy’ automate away large chunks of the workload involved with running an organization. As our lives become more entwined with technology, the benefits of well-designed software solutions are going to become even more apparent.Rather than trying to be all things to everyone, A2X focuses on doing one thing extremely well. To find out more about how A2X can help your business, feel free to visit our website or sign up for a free trial today.