Any discrepancies should be investigated and addressed.Ī best practice is to compare actual Inventory Asset values from the Balance Sheet with Inventory Lab’s inventory value quarterly. Regularly update Inventory Lab’s cost information and compare Gross Margin data between Inventory Lab and accounting systems. Reconcile financial data to bank and credit card statements for accuracy. However, watch out for potential pitfalls. This ensures an understanding of profitability and Gross Margin. Monthly, transfer the value of sold products from Inventory Asset to Cost of Goods Sold (COGS) on the Profit and Loss Statement. For inventory tracking, adopt a modified cash approach in the accounting software, recording inventory purchases as an Inventory Asset on the Balance Sheet. To utilize both Inventory Lab and accounting systems effectively, list products and manage product costs accurately in Inventory Lab. Comparing it to previous periods reveals the growth of assets and debt, including inventory balance based on financial activity and supplier payments. Unlike the Profit and Loss Statement, it provides a comprehensive financial view of the business’s entire lifespan, measuring liquidity and capital efficiency. The Balance Sheet from accounting software is often overlooked but holds significant importance. These accounting systems are vital for tracking financial data based on reconciled banking information, ensuring accuracy. They connect to bank and credit card institutions but not directly to Amazon Seller Central. On the other hand, Quickbooks and Xero serve as accounting software that generates Income Statements (Profit and Loss) and Balance Sheets. This software is particularly beneficial for sellers managing multiple SKU’s, saving valuable time. Additionally, Inventory Lab offers profit and loss insights, including non-product-related business expenses when input manually. It enables direct listing of products on Amazon and tracks product costs and inventory levels by syncing directly with Amazon, providing real-time sales and stock information. Inventory Lab offers unique features that set it apart from Quickbooks and Xero. One question that came up several times was “Do I need Inventory Lab and Quickbooks or Xero?” It’s an easy answer – Yes! Let’s dive into why both Inventory Lab and accounting software are both needed. I had a blast reviewing their accounting books and giving them suggestions. This past week I had the opportunity to visit with 30 hard-working ecommerce sellers at an Amazon Seller Retreat.
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