Schultz & Associates provides A2X accounting services through a dedicated ecommerce accounting team that works with online sellers every day. Ecommerce accounting is not an occasional assignment within our firm. Members of our team devote a significant portion of their time to businesses that sell through Amazon, Shopify, Walmart, eBay and Etsy. They work with A2X and QuickBooks Online as part of the monthly accounting process.
That day-to-day experience matters. Our team sees how marketplace settlements flow through A2X and into QuickBooks Online. We know where mappings and reconciliations can go wrong. We also understand how those transactions affect the rest of the financial statements.
Our A2X accounting services extend beyond the marketplace integration. We account for inventory, cost of goods sold, prepaid inventory, goods in transit, accruals and other balance sheet accounts. We reconcile accounts and make the adjustments needed to produce complete monthly accrual-basis financial statements.
Our ecommerce team also has the resources of a full-service CPA firm behind it. Schultz & Associates provides tax planning, prepares business and individual income tax returns, and handles multi-state income tax compliance. This allows us to carry accurate monthly accounting through the entire tax process.
Our goal is not simply to make A2X work. We want the accounting behind the entire ecommerce business to work.
Why Ecommerce Businesses Use A2X
One of the first accounting problems an ecommerce seller encounters is that the deposits reaching the bank do not equal the sales reported by the marketplace. Amazon, Shopify and other platforms may deduct fees, refunds and other amounts before sending a payout. Recording the net deposit as sales can understate both revenue and expenses.
A2X helps separate that activity. It summarizes marketplace transactions and sends the resulting accounting entries to QuickBooks Online. Depending on the marketplace, those entries can include sales, refunds, fees, taxes and other components of a settlement. The entries can then be matched to the actual payouts deposited into the company’s bank account.
This becomes more important as transaction volume grows. A business may have thousands of individual orders during a month, but QuickBooks does not need thousands of individual sales transactions to produce accurate financial statements. A2X summarizes that activity into accounting entries that preserve the important financial information without filling QuickBooks with unnecessary transaction-level detail.
The process also creates a useful reconciliation point. The marketplace reports what happened, A2X summarizes that activity, QuickBooks records it, and the payout ultimately reaches the bank. When those pieces do not agree, our accounting team can investigate the difference rather than simply accepting the amount that reached the bank.
A2X solves an important part of ecommerce accounting. It does not, however, determine whether the rest of the company’s books are correct. Inventory, cost of goods sold, accruals, bank and credit card reconciliations, and other balance sheet accounts still require attention outside the marketplace settlement process.
A2X Is Only Part of the Accounting Process
A2X can improve the way ecommerce activity reaches QuickBooks Online, but it does not replace the monthly accounting process. A successful A2X reconciliation tells us that marketplace activity and the related payout agree. It does not tell us that the company’s entire balance sheet or income statement is correct.
The rest of the business still generates accounting activity outside the ecommerce platforms. Bank accounts and credit cards need to be reconciled. Loans and fixed assets need to be recorded correctly. Accrued and prepaid expenses may require adjustments. Inventory purchases also need to appear in the proper balance sheet accounts rather than simply reducing income when the business pays for them.
Inventory deserves particular attention. A2X can provide useful information related to marketplace sales and cost of goods sold, but it is not a complete inventory management system. Businesses still need a reliable process for determining the inventory they own, including inventory they have purchased but have not yet received.
This is why we review the entire balance sheet each month. An income statement can appear reasonable while significant accounting problems remain on the balance sheet. Those problems eventually affect gross margin, profitability, cash flow analysis and income tax returns.
Our A2X accounting services combine marketplace accounting with the rest of the monthly close. The objective is not simply to reconcile A2X. It is to produce complete financial statements that accurately reflect the business.
Using A2X to Improve Monthly Inventory Accounting
Better information about what a business sells can also lead to better information about what remains in inventory. A2X provides more consistent information about ecommerce sales and cost of goods sold throughout the month. When the system is set up correctly, that information can help produce more reliable monthly inventory estimates.
Schultz & Associates helps make sure the A2X setup produces information that both the business owner and our accounting team can use. We review how transactions flow through A2X and into QuickBooks Online. This includes the accounts and mappings that affect sales and cost of goods sold.
We continue reviewing those results each month. Products change. Businesses add selling platforms. Transaction activity becomes more complex. Regular review allows us to identify problems and make corrections before they affect several months of financial statements.
For businesses that perform periodic physical inventory counts, we can use A2X information as part of the process for estimating inventory between counts. We combine current sales and cost information with purchases and the most recent physical inventory. When the business completes its next physical count, we compare the estimate with actual inventory and make any necessary adjustments.
The result is better monthly information about inventory, cost of goods sold and gross margin. Business owners can use that information to evaluate purchasing, pricing and cash flow. Our accounting team uses the same information to prepare more accurate monthly financial statements and identify unexpected changes sooner.
Managing A2X as Part of the Monthly Accounting Process
A2X works best when it becomes part of the regular monthly accounting process. Ecommerce businesses change as they grow. They add products, enter new marketplaces, change payment methods and encounter new types of transactions. An A2X setup that worked properly when first created still needs to produce accurate information as the business evolves.
Our A2X accounting services include reviewing information as it flows from ecommerce platforms through A2X and into QuickBooks Online. We reconcile marketplace payouts to deposits received by the business. We also review how sales, refunds, fees and other settlement activity appear in the accounting records.
When something does not reconcile or an account balance does not make sense, our team investigates the difference. We can correct mappings and other accounting issues as they arise rather than allowing them to continue for months.
A2X then becomes part of the larger monthly close. We reconcile other balance sheet accounts, record necessary adjustments and review the financial statements for unusual results. Our goal is to complete the monthly accounting around the middle of the following month. That gives business owners current financial information they can actually use.
Setting up A2X correctly matters. Making sure it continues to produce reliable accounting information as the business grows matters just as much.
Moving Your Ecommerce Accounting to A2X
A business does not need to already use A2X to work with Schultz & Associates. In many cases, companies begin considering A2X because their existing accounting process has become difficult to manage as ecommerce sales and transaction volume have grown.
We can review how sales currently move from Amazon, Shopify, Walmart, eBay or Etsy into QuickBooks Online and determine whether A2X can improve that process. We then help connect the appropriate marketplaces, establish the accounting mappings, connect A2X with QuickBooks Online and reconcile the resulting entries to actual marketplace payouts.
The objective is not simply to turn on an integration. We want the first A2X entries to reach QuickBooks correctly and establish a process that can continue to work each month.
Schultz & Associates offers this work as a fixed-fee A2X setup and conversion service. Businesses can use the conversion as a standalone project or combine it with our ongoing A2X accounting services.
For companies that already use A2X but do not trust the results, we can also review the existing setup. We identify incorrect mappings or reconciliation problems, correct the accounting and establish a more reliable process going forward.
When Does an Ecommerce Business Need A2X?
There is no single sales level at which every ecommerce business needs A2X. The better question is whether the existing accounting process can still produce accurate financial information as transaction volume and marketplace activity increase.
For a smaller seller with limited activity, a simple connection to QuickBooks Online may be enough. Problems often begin as the business processes more orders, sells through multiple marketplaces, or encounters increasingly complicated fees, refunds and settlement activity. The deposits reaching the bank become less useful for understanding what the business actually sold and what it paid to generate those sales.
A2X becomes particularly useful when the accounting process requires too much time to reconstruct marketplace activity after the fact. Instead of treating each payout as a single deposit, A2X provides the accounting information needed to separate sales, refunds, fees and other settlement activity before it reaches QuickBooks Online.
The decision should ultimately come down to the quality of the accounting information. If the current system makes it difficult to reconcile marketplace activity, understand gross margin or complete accurate monthly financial statements, it may be time to consider A2X.
Schultz & Associates can review an existing ecommerce accounting process and determine whether A2X would meaningfully improve it. We do not recommend adding another piece of software simply because it is available. We recommend it when it can create a better and more reliable accounting process.
Meet Our Ecommerce Accounting Team
A2X accounting services at Schultz & Associates is handled by a dedicated ecommerce team. Our team works with online sellers throughout the year and understands both the technology behind ecommerce accounting and the accounting principles that determine whether the resulting financial statements are correct.
Edward White – Ecommerce Accountant
Eddie works directly with ecommerce clients and has extensive hands-on experience with A2X, QuickBooks Online and marketplace accounting. He works with ecommerce accounting throughout the week and understands how transactions move from selling platforms through A2X and into QuickBooks.
His work includes settlement reconciliations, account mappings, inventory, cost of goods sold and the monthly accounting needed to produce complete financial statements.
Matt Wilkins, CPA – Tax and Accounting Manager
Matt brings more than 17 years of accounting and tax experience to the ecommerce team. His background includes accrual-basis accounting, complex balance sheets and the differences between financial statement and tax accounting.
He works with ecommerce businesses using A2X and QuickBooks Online and helps connect monthly accounting with the broader financial and tax issues that develop as a business grows.
Mary-Kate Sweet – Staff Accountant
Mary-Kate supports the ecommerce team with A2X and QuickBooks Online accounting, reconciliations and monthly financial reporting. She works alongside Eddie and Matt to maintain consistent accounting processes as ecommerce clients grow and their transaction activity becomes more complex.
Talk With Our Ecommerce Accounting Team
If your business is considering A2X, already uses A2X, or is not confident that your ecommerce activity is reaching QuickBooks Online correctly, we can review your current accounting process and help determine the next step.
Contact Matt Wilkins, CPA to schedule a conversation for accounting, tax and A2X accounting servcies.