 QuickBooks Online 2023 e-commerce Amazon sales manual journal entry method. Get ready to earn the skills needed to boost your bank books on up with QuickBooks Online 2023. Here we are in our QuickBooks Online test company file using the accountant view as opposed to the business view you can toggle between the two views by going to the cog up top and switch the view down below. Opening some tabs to put reports in like we do every time. Right click in the tab up top to duplicate it. Right click in the tab up top once again to duplicate once again. Back to the tab to the middle, down to the reports on the left hand side. Opening up the balance sheet once again. Tabbing to the right reports on the left and this time we want the P to the L, the profit to the loss, the income statement closing up the hamburger and changing that ranging from going from this time. Let's go from 0901 to 5 to 0930 to 5 and so I don't have anything in there thus far. That's what we're looking for because we're going to add stuff for the Amazon sales tab into the middle. Closing the hamburger again range the same 0901 to 5 to 0930 to 5. Run it to refresh it and then we're going to tab to the left and we've been working on e-commerce situations where we're selling inventory but not on the ground. Support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it and not in a store but rather online in the cloud with the help and use of third party platforms. For example a Shopify or an Amazon in prior presentations we've been focusing more on the Shopify. Now we're taking a look more at an Amazon type situation noting that no matter what the third party platform the general concepts the overarching concept is in essence the same. We could use different methods to pull that information in from the third party platform into our system either with the use of just bank feeds. Or we might have a manual entry system pulling information from the third party platform and bank feeds. Or we could use the QBO commerce which we'll talk about later or like a third party app that's going to help to pull in that information. Right now we're focused on the manual entry method and more on an Amazon based situation because some of the line items might be a little bit more or different or more detailed. And then but this method is not just for the manual method in concept because when we think about applications such as the QBO commerce and some of the third party applications they're going to pull in the information in a similar way. They're just going to kind of do it in an automated fashion so we're still going to need to know some concepts like clearing accounts when we do some of those integrations that we'll talk about in future presentations. In a prior presentation we worked a practice problem in Excel where we imagined we're pulling information from Amazon because we're having sales that are taking place on Amazon. We're looking at the deposits or payments that are going from Amazon to us which happens about every two weeks and we're looking to break out the detail of all the activity that's happening on Amazon's side before they send out that deposit. That's the general concept, similar concept to what we would do in a Shopify situation. However, we might have different line items when you're thinking about an Amazon situation possibly more line items depending on your circumstances than you might have in a Shopify type situation. So then we can think of doing our accounting in QuickBooks a couple different ways, the easiest ways to say I'm going to ignore all this other stuff that breaks out from the deposit and just wait till it hits the bank feeds and then record it as basically income when it hits the bank feeds. Or we could try to get more detail entering a journal entry which is still going to get to the same deposit amount but will break out all of this detail so we have it in our finances. And of course the second method is similar to what other integrations are trying to do including the QuickBooks basically integration. It's not pulling in every transaction, we're summarizing the transaction and then trying to pull them into our QuickBooks so we have more detailed financial statements although we're not pulling in for example every customer or tracking every unit of inventory on a perpetual inventory based system. Okay so the first thing we're going to do to get this practice problem going is I want to once again upload some bank feed data so we can see the bank feed come through. So I'm going to do this two times, we're going to do it two different ways so I'm going to put the date, the amount, the bank memo and then I'm going to have one in August and one in September for that amount that's going to go into our bank account the 391.88. And so once we have this I'm going to save it as a CSV file as we've done in the past so I'll do it fairly quickly hitting the drop down, save as and we're going to save it as, I'll hit the drop down here, a CSV so it's not going to be an Excel file but a CSV and I'm going to make it bank feeds number three. So we'll say okay boom and then if I look at it in my folder here we've got the bank feeds number three right there opening it back up just to check it that's the one let's pull that into our QuickBooks so we're going to go into the banking and I'm going to go into the links up top and I'm going to upload, upload from a file okay and then we'll select where we want to be pulling this information from so let's see if I can find it I'm going to copy the URL here copy the URL paste it and bank feed number three and we'll just pull that in as we've done in the past. This is going into the checking account, just like if it was connected to the bank feeds and yes, column one column and my voice is going in MDD y y y y and then date to date description goes to the bank memo field amount to amount that is it. Let's go okay there's the two I want to pull in I'm going to select all of them boom and continue save it. Okay, import complete done movie B to the end. So if I go on to the checking account, we've got those two amounts are pulling in in our practice data in the bank feeds. So now if we if we looked at our first method, we can say, well, I'm just going to let I'm just going to see it hit the bank feeds, and then I'm just going to record it as Amazon sales at that point. So what would be the easiest thing to do, we could say I'll just wait till it hits bank fees like this one, and I will just put it into directly Amazon sales now I should have changed the memo to be Amazon. This would probably the memo would probably say like Amazon on the bank feed memo or something. So let's do that. I'll put in the Amazon tab. Amazon, boom, and then I'm going to put it into a sales like Amazon sales or something like that. So do I have an Amazon Amazon? I'll just say sales Amazon and I'll make a new one boom. And we'll just call it an income account income, and it's going to be sales Amazon. I'll put it into other primary income, save it. And that's it. I could even make a rule for it to come in automatically and just say OK. And then if I check it out on my checking, it's going to be going into the checking account. And we see that here. So that's not it. Oh, I got to go back a month. Hold on a second exit. Let's go from 0801 to 5 to 0830 to 530 and then run it. And so there we've got our deposit. Boom. And then going back up. The other side's going exit to the income statement, changing the date again to 0801 to 5 to 0830 to 5 and run it. And so there is our sales. Now remember that one of the obstacles you have with this is that you, you are, if you get a 1099, it might be for the gross sales amount. And Amazon could have taken a substantial amount out. And if you report your sales line on your schedule C, if you're a sole proprietor that's under the 1099, they could have questions. So if you got a schedule C at the end of the year, and let's imagine this was for an entire year that was saying 271, then you would just say, okay, well, I'll just take the difference and, and I'll increase my, my top line revenue. And, and then I'll record the other side to like fees or something like that. So we could do a journal entry. So this would be like the easiest thing to do. We're making a lot of assumptions here, but we could just then go, okay, let's go and make a journal entry. And as of 08, let's say 3025. And we're going to say that this is going to be an expense account, which is going to be, what do we want to call it? Amazon charges, Amazon charges. I'll just make up an expense account. You can put it in the cost of goods sold. I'm just going to put it in the expense for now. So, so you could put it into cost goods sold though, but I'm going to say, let's say other business Amazon charges. And we're going to say that was for 20983 209.83. And the other side is going to go into the Amazon sales sales Amazon. So this will increase the Amazon sales with a credit because it goes up with a credit. And the Amazon charges will be an expense account, which you could put into cost of goods sold. And I'll save and close and back to the income statement. And so now we've just basically said, okay, that should tie out to my 1099. So the IRS is happy. And then I'm just assuming that the difference was charges of some kind that I lumped into charges. And then down here, we've got the net income, which basically is the same in either case. So we just adjusted it to get the top line to match what is being reported as sales, assuming that that is the correct thing to do. That would be the easiest thing to do, but you don't get a lot of detail in terms of what the actual charges were. And that's not ideal, especially for internal bookkeeping purposes. Also, if you had sales tax that you needed to track, then you're going to have to come up with some way to do that. Although with the Amazon situation, Amazon might be responsible for a lot more of the sales tax situations than if you were in a Shopify kind of situation. Now, the next method is we can say, okay, I'm going to pull this information in and enter a journal entry. According to this whole detail that I pulled in every two weeks that I'm going to pull in related to the deposits and it's summarizing multiple sales. So it's not like I'm pulling in every transaction, but I'm going to take my deposit detail and try to get my financial statements to have more information. So then I'm going to enter a transaction that looks more like this. So let's pull this in and do that method. So I'm going to go back on over and we'll do this on nine one. So now I'm going to enter a journal entry. So we're going to do the same thing again with a different method this time to tie out to this deposit. So we'll say, let's enter a journal entry. And I'm just going to go through each of these line items on and I'm going to make up an account for it to go to. So each of these line items, we did this in a prior presentation, we decided that all of these items that make up that deposit is going to be going into these accounts. So if I don't have these accounts, I will make them up as I go. So we've got Amazon charges. So Amazon, Amazon charges. Let's do that. This is going to be as of by the way, oh nine, let's say 3025 and that's going to be 902690.26. And then we've got Amazon charges a couple more times. So we'll say Amazon charges again. This is going to be 16 on the credit 16. And was that even Steven? And then again, that's not Amazon charges. Okay, the heck. So Amazon, Amazon charges. Amazon charges. All right. Don't be messing up like that. Amazon charges again. And this one's going to go to 17. Do I really have to deal with these pennies crying out loud? All right. Then we're on Amazon FBA fees. All right. Amazon FBA fees. I'm going to say tab. And I'm going to set that up again. We could put it in a cost of goods sold account or an expense account. I'm just going to expense them for now. So I won't get into the details on that. And we'll look at the custom where like the integration for Amazon within QuickBooks automatically sets up the accounts later. And I think they put it to cost of goods sold. So we'll take a look at that later. But I'm just going to put it into other expense. There it is. Boom. And that's going to be for $87.87. And then we're going to say that we're on Amazon sales. All right. Amazon sales. Boom. Hold on a second. Don't I have a sale? Sales Amazon. There we go. And that one is for that should be a credit. It's going to be for Amazon 701. All right. 701. So it's quite of a tedious activity to do this. But Amazon refunds. All right. Amazon refunds. All right. Let's add it. I'm going to say it's going to be an income account because this is going to be a contra income account for the refunds that come back to us. So I'm going to say other primary income Amazon refunds. And that was for $99.88. So $99.88. Is that right? $98.98. Pick it up correctly. All right. And the next one is seller fees and charges again. All right. So I'm going to say Amazon charges. And that one $3. They're just nitpicking me. Nickel and diamond. Nickel and diamond me to death. Just like the IRS does. Amazon. Amazon charges. Amazon charges 108. All right. Okay. And then we've got Amazon shipping income. Amazon shipping income. I'll make up an account. It's going to be an income type of account because this is what we're charging for the shipping. We're collecting the shipping in this case. I'm going to say other income. Amazon shipping. Boom. Shaka Laka. $21. $21. And then we got Amazon shipping again. So UltraVace. Amazon shipping income. And this one is 11 on the debit side. 11 something. 11.44. I can't remember four numbers. 1133. 1133. Amazon shipping again. I should be able to remember seven numbers at a time. Isn't that what the memories of Amazon shipping. You're supposed to be able to remember. That's why the phone numbers are that long. You can't even remember. 939. 9.3. Oh, hold on a sec. 9.39. All right. And then we've got Amazon sales tax payable. All right. Amazon sales tax payable. I'll add that that's going to be a liability because these are going to be the sales taxes that we are getting paid that we're probably going to have to remit to the government remembering that I'm going to say other current liabilities that Amazon is possibly more going to handle more of the sales tax than like a Shopify sometimes maybe but some states you might still have to deal with the sales tax so that's a whole other issue that we might talk a little bit more about in the future that's point two. It's not bad I can handle that but still they're nickel and diamond me man. Nickel and diamond me. Amazon FBA fees. So we've got then Amazon FBA fees. 6,311. 6,311. And then we've got Amazon sales tax payable again. All right. Amazon sales tax payable. That's usually a liability but yeah it's $24.24. And then we've got the Amazon sales tax payable again. Amazon sales tax payable for $5. And then finally if it all comes out correctly notice it's trying to give me the number sometimes this is going to be Amazon. I'm going to put it into an Amazon payment clearing account. Boom. And that's going to be an other current liability account. Other current asset account. And I'm going to say it's going to be just I'll just put it other current asset. Don't give me that. And there we go. And now if I did everything correctly it's going to try to plug that number in for me to make my debits and credits correct. So if my debits and credits should be correct $9.31.88. So $9.31.88. So it's a long tedious process to do the journal entry with the Amazon ones oftentimes because again the reports that you have to deal with often have a whole lot of line items and as we saw in the prior presentation in the Excel problem we can group multiple line items into some of these line items and again the software that's what some of the software integrations are attempting to do when they pull in the data from a third-party platform such as even the QuickBooks integration it's not trying to pull in every customer sale but summarizing the data which means it's going to pull it in in like a journal entry format generally and if you get this in there all correctly then the bottom line should still add up to the amount that Amazon's going to be distributing the deposit that's going to hit the bank account. Now note that we put this amount not into our checking account but rather into a clearing account. It should be exact so we could have put it like into our checking account even though if we were to do that we might want to use like a deposit form and we can put this whole long journal entry into a deposit form and then when you do the bank feeds it could match you could use the matching mechanism to match out the bank feeds to what you put in there but the clearing accounts are often a good system in case there's an issue and this amount doesn't exactly tie out for whatever reason to what was put in to the bank account so that you could see something in the clearing account that doesn't clear because we should be able to take and tie everything out in the clearing account. Hopefully I got all the account types correct you could put some of these items into cost of goods sold as opposed to an expense item like we talked about and we'll see some of the again the default settings that QuickBooks uses when we use the QuickBooks integration at least for the Shopify side of things so you can get an idea of what their defaults are and I think they do use cost of goods sold for some of the fees and whatnot. Alright, so let's go ahead and save it and close it so I'll save it and close it and I probably I should have put the date on the date of the deposit profits possibly or the date that it was sent out which should be let's just what did I put on that I think I put I think I put 915 or something like that or 925 might be a little bit more specific okay save it and close it and then if I go to my balance sheet and we bring the date up now we're working in the next month 090125 to 093125 let's run this side by side month by month now and hold on a sec 09325 and let's run it there okay alright so then and now I want to see it month by month let's make it from 080125 so I can see the two months okay so this is as of the end of August as of the end of September if I go into and I'm not going into the checking account it's not there yet it's in the it should be in the clearing account clearing account clearing account there it is pull it together for crying out loud so there's our clearing account and then when we make the deposit it's going to move from here up into the checking account and this is similar to what some of the integrations will do that we'll take a look at in a future presentation and then on the income statement side let's do the same thing let's just bring this up to 09325 and then let's say this is going to be for for months so I can see the month side by side so now we've got our Amazon income and refunds so here's our Amazon income and then the refunds are usually considered kind of contra income accounts we put them in the income section it would be nice if it was in the other order and you could order it with like account numbers for example and what not or you could use like Z to A order and I won't get into that now but there's our total income and then we've got the gross profit and then we've got the charges and the Amazon FBA fees and again you might put these into like cost to get sold as opposed to down here but the general idea is that there are our expenses we've got the more breakout of this information using this method then we did with the prior method and the prior method we kind of we just enter the deposit and then we force the deposit to be tied out to what we imagine 1099 to be by then doing a journal entry which we might do at the end of the year if we use this method we're going to be more accurate during the year right because because now we're breaking out each of the transactions as we go instead of waiting like till the end of the year when we get a 1099 and then possibly make an adjustment at the end of the year for example so and and here we also might have a sales tax if I go to the balance sheet if we deal with sales tax then we've got the sales tax payable which is a liability account now then the final step of this method would be that we're going to see the deposit and when the deposit hits the checking account we will put the other side to the clearing account and the clearing account will then zero back out so I'm going to go back to the tab to the left and if we go into the checking account we could say there's our deposit we could say we can look at the detail in our clearing account and it should match exactly because there's no fee because we're connected directly to Amazon it was paid out by Amazon so if there's no other fees or anything then from a third party platform like a PayPal or something we should be able to go in here directly and see it and I'm going to put the other side of this transaction to the Amazon clearing account Amazon Amazon clearing what did I call it for crying out loud I called it Amazon payment clearing account okay Amazon payment clearing account so there we go and so this will decrease the checking account and then the other side will bring the clearing account back to zero let's add it and then go to the balance sheet it's thinking awfully long balance sheet run the balance sheet and so now the clearing account is back down what we should see in the clearing accounts is they go up and then they go back down to zero so we should be able to take and tie these journal entries and then the transaction and if I go back up to the the checking account it's going to go into the checking account so no so that's how you can do it on a manual basis now remember we're in a future presentation we'll take a look then at the QuickBooks method which is using their commerce method down here which is also similar to some third party apps which also is trying to summarize the data as it pulls in that information into the QuickBooks system so we're still going to have to deal with like clearing accounts and whatnot even if we're using this kind of method because we're trying not to pull in single transaction from the third party platform like an Amazon or Shopify and so the integrations that most people recommend are the ones that are trying to do a similar thing pull in the detailed information related to the payments and break that out but have it done kind of automatically in the QuickBooks system but you're still going to have to deal with the clearing accounts and basically have to understand what it is doing so we'll get into that more in future presentations