Accounting Software
Why do Amazon sellers need accounting software?
Every sale, refund, fee, and advertising charge is a transaction that needs tracking for tax and profitability. Doing this by hand in spreadsheets is slow, error-prone, and makes it hard to see your real margins. Proper accounting software reconciles your bank feed automatically, categorises transactions, and gives you a real-time profit and loss view, and most integrate directly with Seller Central to automate the bulk of data entry. HMRC expects accurate records regardless of how you keep them, so this isn't really optional once you're selling at any volume.
What does real-time (RT) accounting do for FBA sellers?
RT accounting pulls data straight from Seller Central, your bank feed, and payment processors as it happens, rather than requiring manual month-end entry. Revenue appears the moment a sale completes and fees are categorised automatically as Amazon deducts them, giving you an accurate live financial position rather than a stale monthly snapshot. This matters particularly for FBA sellers because Amazon's fee structure is complex and changes fairly often, an automated feed catches those changes; manual bookkeeping usually doesn't.
What does Link My Books do?
Link My Books is UK-built software that syncs Seller Central data with Xero or QuickBooks, automatically categorising sales, referral fees, fulfilment fees, storage fees, advertising spend, and refunds into the correct accounting codes, producing a tax-ready record without manual entry. It's built specifically around Amazon's UK fee structure and HMRC formatting. Typical cost runs roughly £30–60 a month depending on sales volume, and most sellers find it pays for itself in time saved and errors caught.
Xero vs QuickBooks, which is better for Amazon sellers?
Xero is UK-built, cloud-native, and integrates cleanly with Amazon-focused tools like Link My Books; most UK accountants and bookkeepers work with it as standard, and pricing starts from roughly £13 a month. QuickBooks is more feature-rich but heavier and less UK-Amazon-native, it suits sellers with employees or multiple business lines more than a solo FBA operation. For most UK Amazon sellers, Xero is the simpler, cheaper starting point.
Do you need an accountant, or can you DIY?
Below roughly £50k a year in sales, DIY bookkeeping with software like Xero plus Link My Books is very workable, the software does most of the work and you're mainly reviewing numbers quarterly. Once you're above that, employing staff, or dealing with VAT and corporation tax complexity, a proper accountant (roughly £500–1500 a year, figures vary and are worth confirming directly) usually pays for itself in deductions caught and compliance handled. A common middle ground is doing your own day-to-day bookkeeping and bringing in an accountant once a year, or once a quarter, for a fixed-fee review.
Business Banking
What does Capital on Tap offer Amazon sellers?
A UK business credit card built for small ecommerce sellers, with flexible credit limits well above typical personal cards, no fixed monthly repayment (useful for seasonal FBA cash flow), cashback-style rewards on spend, and approval typically within 24–48 hours. Interest applies on any balance carried, so it works best paid off promptly and used for spend that accepts cards (advertising, software, some suppliers) rather than as your only financing option.
What about Business Amex and Personal Amex for Amazon sellers?
Business Amex offers cashback (roughly 1.25%) on business spend with an annual fee (roughly £25–40), worthwhile mainly if you're pushing several thousand pounds a month through it, though many wholesale suppliers don't accept Amex, so it works better as a secondary card for software, ads, and logistics than as your primary sourcing card. Personal Amex cashback cards carry a higher annual fee and are really a personal finance decision rather than an Amazon business strategy, and mixing personal and business spend on one card is generally best avoided for clean accounting.
What is Wayflyer and how does revenue-based financing work?
Wayflyer is a UK fintech offering revenue-based financing, funding inventory purchases and recovering the capital as a percentage of daily sales rather than fixed monthly repayments, with no separate interest rate, just a transparent per-sale cost. Approval is fast (roughly 48–72 hours), based on sales history rather than credit score, with typical amounts from roughly £1,000 to £50,000. It suits scaling proven, fast-moving products; it's less attractive for slow-moving stock, since you keep paying the percentage until it sells through.
What does Monzo Business offer Amazon sellers?
A UK digital business bank with no monthly account fees, free international transfers (useful if sourcing from the EU or further afield), instant transaction notifications, and automatic spending categorisation that plugs neatly into accounting software like Xero. It's a strong choice as a primary day-to-day account, though it doesn't offer loans or overdrafts, so it's typically paired with a financing tool like Capital on Tap or Wayflyer for anything beyond routine operations.
What does Wise offer for international payments?
Wise specialises in low-cost international transfers and multi-currency accounts, using the real mid-market exchange rate with a small margin (roughly 0.4–2%) rather than the 3–6% markup typical of high-street banks. It lets you hold GBP, EUR, USD, and dozens of other currencies, useful if you pay EU suppliers or receive EUR payouts from Amazon's European marketplaces, avoiding repeated currency-conversion losses. Many sellers pair it with a UK current account like Monzo for day-to-day banking.
Financial Management
How do you track profit and loss as an Amazon seller?
Work in three layers. Per-unit profit is sale price minus cost of goods, referral fee, fulfilment fee, and advertising cost per unit, this tells you if a product is actually worth selling. Per-ASIN profit is unit profit multiplied by units sold, tracked monthly to catch underperformers early. Total business profit adds up every ASIN and subtracts overheads like software and prep costs. Accounting software with an Amazon integration (Xero plus Link My Books, for example) can automate most of this; reviewing it weekly rather than yearly is what lets you catch problems while they're still small.
How does VAT work for Amazon FBA sellers?
VAT-registered sellers add 20% to the sale price, collected on Amazon's behalf, and also pay VAT on most supplies and services. Each quarter you declare VAT collected minus VAT paid to HMRC, the difference is what you owe (or can reclaim). The important trap: the VAT you collect belongs to HMRC regardless of your actual profit margin, so it needs setting aside as it comes in, not spent as if it were revenue. The VAT registration threshold changes periodically, so check the current figure directly with HMRC or your accountant rather than relying on a fixed number here; many sellers register voluntarily below the threshold specifically to reclaim VAT on expenses.
When do you need to register for VAT?
Registration becomes mandatory once your rolling 12-month revenue crosses the current threshold, at which point HMRC requires registration within 30 days, check gov.uk or your accountant for today's exact figure since it's periodically reviewed. Voluntary registration below that threshold can still make sense if your expenses (and therefore reclaimable VAT) are high relative to revenue. Once registered you'll file quarterly VAT returns, which adds admin, so it's worth discussing timing with an accountant rather than registering reflexively the moment you're eligible.
What are the corporation tax basics for a limited company?
As a sole trader you pay income tax and National Insurance on profit directly; as a limited company, the company pays corporation tax on profit and you're taxed separately on whatever salary or dividends you draw out. Current corporation tax rates and bands change from time to time, so treat any specific percentage as something to verify with your accountant or gov.uk rather than take as fixed. Most accountants suggest incorporating once annual profit reaches a level where the tax saving outweighs the extra admin, roughly £10k–15k profit is a common rule of thumb, though this depends on individual circumstances and is worth a proper conversation with an accountant rather than a blanket rule.
How do you manage cash flow as an Amazon seller?
It's entirely possible to be profitable on paper and still run out of cash, since you pay for inventory up front but Amazon pays you on its own schedule, typically a couple of weeks after a sale. Keep a buffer rather than reinvesting every pound of profit immediately, watch your cash position regularly through your banking app, and where possible negotiate payment terms with suppliers (net 30, for instance) to push your outflow later. Financing tools like Capital on Tap or Wayflyer can smooth genuine short-term gaps, but they're a tool for timing, not a fix for an underlying unprofitable product. Forecasting your cash position a few months ahead, accounting for seasonal swings and storage-fee peaks, is what separates sellers who scale smoothly from those who stall out despite decent margins.