Amazon 1099 vs. Financial Statement Activity | Amazon Bookkeeping Tips

TL;DR

Amazon reports sales figures based on total order amount, while accounting software uses the fulfilled shipped order amount, leading to discrepancies.

Transcript

one of the questions we get all the time this time of year is why doesn't my 1099 and other various amazon reports match what our clients accounting software shows so first of all before we get into that there's a couple things i want to show you and that is that if you're struggling with your 1099 you're not alone if you do a google to say why doe... Read More

Key Insights

• 😀 Discrepancies between Amazon reports and accounting software for 1099s are a common issue faced by sellers.
• 🎟️ Differences arise due to timing, gross figures, and missing expenses in the 1099.
• 🏛️ Using class tracking in accounting software helps analyze individual channel performance accurately.
• 🚕 The net income figure is crucial for tax purposes and should be compared between Amazon reports and accounting software.
• 🌍 Foreign currency adjustments need to be considered for international sales.
• 💱 Websites providing foreign currency exchange rates can assist in converting foreign currency amounts for comparison.
• 🧡 Despite variations, as long as the 1099 and accounting records are within a reasonable range, audits can be passed successfully.

Questions & Answers

Q: Why does my 1099 from Amazon not match my sales in accounting software?

The discrepancy is due to timing differences, as Amazon reports total order amount while accounting software uses fulfilled shipped order amount.

Q: Is the 1099's gross figure reflective of actual income, including expenses?

No, the 1099 only reflects gross figures and ignores shipping, returns, discounts, and other adjustments required for accurate financial reporting.

Q: How does using a cash-only approach affect the difference between the 1099 and accounting software?

A cash-only approach neglects the additional expenses and leads to a significant difference between the 1099 and recorded income in accounting software.

Q: How can I validate the data myself?

By comparing the net income from channel activity in accounting software to the net income derived from Amazon's reports, you can verify the accuracy of your records.

Summary & Key Takeaways

• Many Amazon sellers face the issue of their 1099 not matching their accounting software.

• Amazon reports sales based on total order amount, while accounting software uses fulfilled shipped order amount.

• Timing differences, gross figures, and missing expenses contribute to the mismatch between the 1099 and accounting software.