Written by Stephen Beard, Managing Director of Plyo Bookkeeping, a Vancouver-based bookkeeping firm.
Who is this software for?
A2X is an e-commerce software designed to help integrate major e-commerce sites (Amazon, Shopify, eBay, Etsy, Walmart and BigCommerce) directly with cloud-based accounting software such as Quickbooks online and Xero. E-commerce presents accounting challenges because there can be a high number of transactions, multiple sales channels and multiple currencies. In addition, critical elements of transactions are usually missing from the final payout that a seller received into their bank account, as companies like Amazon and Shopify will deduct card fees and some taxes at source. In this review, we’ll delve into the features, benefits, and potential drawbacks of A2X for Amazon.
Key features & Ratings
The A2X Amazon integration enables automatic syncing of sales, fees, and other financial data, reducing the need for manual data entry. The integration steps are very straight forward and the process of pushing information into your accounting system is also intuitive.
To fully set up the system you’ll need to map your Amazon categories to your accounting software’s chart of accountants. Fortunately A2X can automatically create all of these accounts in your accounting system for you, so it’s easiest to just let A2X set up the recommended accounts for you. At this stage you will need to set up the tax rates associated with each Amazon category. Unfortunately, A2X is not capable of supporting the complex Canadian GST/HST/PST tax structure – so you have to record transactions exclusive of tax. This means that a monthly or annual adjustment is still required for tax.
E-commerce businesses dealing with international transactions will appreciate A2X’s robust multi-currency support. It automatically converts and records transactions in the local currency, simplifying reconciliation and financial reporting. Critically, it knows the final amount deposited or charged to your bank account by Amazon, meaning that it always converts the foreign currency transactions using the correct exchange rate – so no time-consuming manual corrections are required later on.
Detailed Transaction Breakdown
A2X provides a granular breakdown of each transaction, including sales, fees, and taxes. While it can’t correctly categorize the taxes, it does put them into a holding account on the balance sheet, meaning that your P&L is correct, regardless of whether you’ve done the required manual adjustment for GST/HST/PST. This level of detail is invaluable for businesses aiming for a comprehensive understanding of their financial performance and expenses.
On top of this, it can capture additional information in the form of classes. For example, an Amazon seller who sells in multiple countries can automatically have those sales classified by country, and this information is then posted directly into your accounting system. This allows you to then review your P&L by region.
The app automates the reconciliation process, linking transactions to corresponding bank deposits. This feature means that it should just be a single click of the button to match the posted journals in your bank reconciliation process.
Inventory and COGS
A2X allows you to enter standard COGS into the system for the SKUs you sell on Amazon. A2X can then generate a journal which estimates the inventory costs of the goods you sold for a certain period. This is a great feature, especially when combined with the use of classes, as you can allocate COGS to a specific region or product line – enabling detailed gross profit reporting.
Amazon FBA Support
A2X is particularly well-suited for businesses utilizing Amazon’s FBA (Fulfillment by Amazon) service. It accurately accounts for FBA-related fees, making it easier for sellers to understand their true profitability.
Overall the A2X interface is modern, streamlined, and intuitive. However, there is still a learning curve, especially in the set-up stage. It’s worth taking the time to do the free training to get the most out of the software.
A2X offers a range of prices for Amazon, starting at $19 USD per month for up to 200 transactions, and rising to $139 USD per month for up to 10,000 transactions.
A2X is a powerful tool for e-commerce businesses looking to simplify their accounting processes. Its seamless integration, accurate transaction breakdowns, and automation features make it a valuable asset for businesses of various sizes. While there might be a learning curve and a subscription cost to consider, the benefits in terms of time savings, accuracy, and comprehensive financial insights position A2X as a reliable choice for e-commerce accounting.