Queries re Amazon sales on Sage

[Chris84]

Hello

I have a couple of queries regarding the best way to process Amazon sales on our Sage (v23 with latest updates, using Win 7 64 bit).

Our company has been selling products on Amazon for a while now and the way we have always processed the orders on Sage is as follows:

Set up Amazon as a customer and put each new sale on against that account, with the sales total being the figure that we actually receive from Amazon on each order after fees taken (inc. VAT).

Is this method suitable or would it be better to enter the sale as the total that the customer pays and then deduct Amazon's fees via bank payments at the end of the month? I did not originally go with this option as the invoices Amazon send to us do not specify which orders the fees relate to.

Also i did not originally set up a bank account for Amazon on Sage where the cash from their sales could go, would this be advisable and if so how should i set this up?

For example say we put £200 of Amazon sales on in a day, would i have to do a bank transfer for the full amount to the Amazon bank account and then do another transfer back to our main bank account when Amazon pay us a certain amount? If not then how would i get the cash from any Amazon sales to go directly in to the Amazon bank account on Sage?

I am aware that you can change the default bank account on Sage but we have orders from various other types of customer and so that would still leave us with the same issue for other customer accounts.

I hope that makes sense, I'm not at all trained in accounts or book-keeping so any advice would be greatly appreciated!

Thank you

Chris

[brucedenney]

What you are doing is not technically correct.

You are under reporting your sales and your expenses and if Amazon are not charging UK vat or any customers are outside the UK you would be incorrectly reporting VAT.

The way you should do it....

Enter each sales as a separate invoice in Sage, these can all be on one "Amazon" account if you like but you need to retain the name and address you sold to. The VAT for each transaction should be recorded, if you are selling in other countries in Europe then you probably need to charge different VAT rates for them and may want to set up extra VAT codes to accommodate these. It may be easier to set up multiple Amazon accounts for each country with the correct VAT codes / rate applied to each so you do not have to select the correct code/rate each time. (You can use the invoice as paperwork for shipping, you could go one step further and use Sales Orders to track order fulfilment etc.)

You can enter full payment of the invoice to the Amazon Bank account on the payment tab on the invoice at the same time as you enter the invoice.

You periodically transfer funds from the Amazon Bank Account to your actual bank account.

You periodically pay the Amazon fees invoice from the Amazon bank account. (You can enter the invoice as a PI on an Amazon supplier account or you could do it as a Bank Payment.. up to you.

If you are selling in multiple currencies, then you probably want to set up an Amazon Bank account for each currency and an Amazon Sales account for each currency and use currencies in Sage.

[Chris84]

Hello Bruce, thank you very much for your quick response.

What you are doing is not technically correct.

You are under reporting your sales and your expenses and if Amazon are not charging UK vat or any customers are outside the UK you would be incorrectly reporting VAT.

The way you should do it....

Amazon prices do include VAT but their fees do not have VAT charged on them as we are VAT registered. We do also have some orders from the other European Amazon websites and the odd Amazon USA order. Would you therefore advise that we put the full price of the order on Sage including any VAT and then do a bank payment for the fees net of VAT?

Enter each sales as a separate invoice in Sage, these can all be on one "Amazon" account if you like but you need to retain the name and address you sold to. The VAT for each transaction should be recorded, if you are selling in other countries in Europe then you probably need to charge different VAT rates for them and may want to set up extra VAT codes to accommodate these. It may be easier to set up multiple Amazon accounts for each country with the correct VAT codes / rate applied to each so you do not have to select the correct code/rate each time. (You can use the invoice as paperwork for shipping, you could go one step further and use Sales Orders to track order fulfilment etc.)

We do put our sales orders on under one Amazon account currently, but we don't have separate ones for different countries, so i might set that up.

We do also record the VAT on each order but we do not however record the customer name and address as this is on Amazon and trackable via the order number if required. Would that cause us any issues anywhere?

You can enter full payment of the invoice to the Amazon Bank account on the payment tab on the invoice at the same time as you enter the invoice.

Does this work the same if you do it via SOP as this is how we enter our sales? Also could you alternatively do this in bulk via bank accounts -> customer receipts at the end of the day for any Amazon sales?

You periodically transfer funds from the Amazon Bank Account to your actual bank account.

You periodically pay the Amazon fees invoice from the Amazon bank account. (You can enter the invoice as a PI on an Amazon supplier account or you could do it as a Bank Payment.. up to you.

If you are selling in multiple currencies, then you probably want to set up an Amazon Bank account for each currency and an Amazon Sales account for each currency and use currencies in Sage.

That sounds fine re the transfers and PI/bank payments, i can sort that out easily enough.

Luckily we now process all of our orders in Pounds Sterling as receiving payments in other currencies was causing us some headaches a few years back!

Thank you for your help

Regards

Chris

[brucedenney]

Trace-ability needs to be there, if you need to cross reference to an amazon database then you need to be sure it will be available for 7 years or create a pdf / spreadsheet copy of the information so you can produce it on demand from HMRC.

There are tools for downloading orders form Amazon and loading into Sage, TRADEBOX is good but as little expensive, I have a couple of customers who download a report form amazon and then import it into Sage with a 3rd party tool, the advantage of these is that you can do stock control and the tractability is all in one place.

Sales order processing is the icing on the cake allowing you to manage back orders etc. There are edi tools that can interact so you can do 3rd party warehousing logistics, this makes sage the hub of it all, you can add on more sales channels, direct, telesales, ebay, website, edi and they all feed the same logistics / warehousing. For a simple accounting package you can very get sophisticated.

[Chris84]

Hello Bruce

That is a good point regarding the availability of the data, i do not know how far back Amazon's orders will go on the website.

I will look at their reports on Monday to see if they have anything that provides this information.

Regards

Chris