If you’re just starting with a new QuickBooks Online company, there are some settings you’ll need to enable before you start using our guide.
Our guide is based on a QuickBooks Online Plus subscription because it’s the only one that has inventory tracking. You’ll get the most out of the guide using SellerZen or tracking inventory if you enter documents manually. If you don’t track inventory, then you can use any subscription plan and a non-inventory item for your documents.
Already have QuickBooks Online configured properly? Go to the bottom of the page to see our series on Amazon to QuickBooks Online accounting.
Click through our guide to skip to different sections if you’re already familiar with specific settings.
- Changing QuickBooks Online Company settings
- Track classes
- Track locations
- Track quantity and price
- Track inventory quantity on hand
- Use purchase orders
- Multicurrency enabled if you sell on foreign marketplaces
- Basic accounts for your QuickBooks Online company
- Payment Method
- Default Customer Account
- Undeposited Funds
- Previous and Current Reserve Amounts
- Bank Account
Inventory tracking will also give you much better reporting on your inventory items, so you’ll know when to raise prices or clear out products.
If you sell on foreign marketplaces like Amazon MX (Mexico) or Amazon CA (Canada), you’ll need to enable Multicurrency as well.
Before we start, here are some of the settings you’ll need to change under the Gear icon > Company Settings.
You should change or enable these settings:
Company > Track classes
Company > Track locations
Sales > Track quantity and price/rate ON
Sales > Track inventory quantity on hand ON
Expenses > Use purchase orders ON
Advanced > Multicurrency (if you sell on foreign marketplaces)
We’ll go through some use cases for these options in other articles.
Continue below for a visual guide for all the setting locations.
Most, if not all, of the basic accounts your business needs will already exist in QuickBooks Online. While you can use those, we recommend creating accounts that are specific to your marketplace. That way you can separate and track individual marketplaces instead of using default accounts for all of them.
For instance, if you sell on two Amazon marketplaces, you may want to use two different Undeposited Funds account to track payments from each.
You’ll want to create specific accounts (and later, products and services) to be able to track your business with greater detail.
Here are some of the basic accounts you should create:
Adding Amazon as a Payment method will allow you to track all Amazon payments. This is helpful if you sell on other marketplaces and track those payments methods as well.
Using a Default Customer Account
Many sellers will want to track individual customers on Amazon, but this may not be a good idea if you have thousands of orders per month. Within a year, you could have tens of thousands of customers, and this large list would slow QuickBooks Online down when you’re using search functions or generating reports.
Using a default customer account will still allow you to search for customer information in the Shipping field. However, most sellers don’t use customer information for Amazon sales. The most important piece of information is the Order ID, and that should be entered on the Invoice. The best place for this is the Memo field.
If you have multiple Amazon marketplaces, then separate them by using one default customer account for each marketplace: Amazon US Customer, Amazon MX Customer, and Amazon CA Customer.
You’ll need to add Amazon as a Vendor. We’ll use Amazon for Vendor-related documents such as Vendor Credits and Vendor Expenses.
If you sell on multiple marketplaces, you may want to add separate Vendors for each one: Amazon MX, Amazon CA, and Amazon US.
We recommend that you set up an Undeposited Funds account that is specific to Amazon. For this Amazon Undeposited Funds account, we recommend you use Bank > Cash on hand. That’s because we’ll need this type of account for some transactions that don’t allow the default Undeposited Funds account.
You can use your default QuickBooks Online Undeposited Funds account for other business you conduct.
Previous and Current Reserve Amounts
Last, but not least, you’ll need to create an account that will keep a running balance of your Current Reserve. Amazon withholds funds every settlement period. If you track both your Previous and Current Reserve amounts in this one bank account and make it a sub-account of your Undeposited Funds, you’ll always know what payout to expect on the next settlement.
Both Reserve amounts should be deposited to this account so that it’ll always have the Current Reserve amount balance. The process is similar to adding the Bank account above:
Last, but definitely not least, we’ll need to set up a Bank account for all the settlement deposits.
Once you have these basic accounts configured, you’ll be ready to continue using our guide. We’ll go over how to create other accounts and items as needed.
- Amazon to QuickBooks Online Accounting: Using Purchase Orders to Receive Inventory
- Amazon to QuickBooks Online Accounting: Creating Proper Invoices
- Amazon to QuickBooks Online Accounting: Configuring Sales Tax and Marketplace Facilitator Tax
- Amazon to QuickBooks Online Accounting: Handling Refunds and Returns
- Amazon to QuickBooks Online Accounting: Recording Reimbursements
- Amazon to QuickBooks Online Accounting: Processing Settlements and Bank Deposits