Bunbury Bookkeeping Service - Bunbury WA 

Accounting & Bookkeeping Guide for eBay Sellers and Xero 
eBay and Xero

Xero and eBay Sellers

It doesn’t matter what business you have you must on top of your income and expenses so you know whether your business is running profitably or not.

I am going to discuss what records you need to keep and the processes you need to follow in order to keep your accounting costs low and to ensure you are on top of your financials.

If you are a new business owner, then email me and I will send you a FREE expense tracker which will allow you to record all of your business costs. Then we will run through Xero which is an online tool to keep a track on your expenses and income.

There are a lot of other alternatives out there also.

I would only suggest to use the expense tracker if you are not making any income yet. This will then help you to record all of your expenses in certain categories that you can give straight to your Accountant at the end of the year which will save a lot of time. Don’t forget to record every expense with regards to your business – no personal expenses.

Xero.com online. Once your business is earning income and you have too many transactions, it is time to move to an online accounting/bookkeeping software that will do all of the heavy lifting for you. As already mentioned, there are many out there including free software, but I am going to show you how to use Xero online. I am a very experienced user of Xero and I know it's capabilities and it works perfectly for eBay sellers.

To summarise Xero, you link your eBay and bank account and every time a transaction goes into your bank account then Xero will pick it up. Over time with Xero it will automate your expenses and it does this by remember the last transaction that looked the same from your bank and it suggests the last used expense account. Then you just press OK. If you have 50 transactions a day, then this will be a real time saver for you. It also does the same for sales you have made.

Once your business is generating sales, Xero will save you a lot of time. Xero is a fantastic tool. At the end of the year Xero will tell you how much your total revenue was, how much your costs were and what your profit was. It really is a fantastic tool and an easy way for keeping on top of how much money you are making.

If you are an active eBay seller then Link My Books will make things easier for you again. Link My Books, to put it very simply, acts as a middle man that tells your accounting software, like Xero, exactly what the deposit that you have just received from eBay is.

For example, you have been making sales and you receive a deposit into your bank account from eBay, say $500.00. Xero will look at that deposit but it will not know how many sales that amount of money relates to, how much you have paid in fees in terms of eBay costs, how many refunds you have had to make, how many reimbursements you have had to make, etc., which is all really important when it comes to understanding not only how much profit you have made but how much you have paid and collected in the form of GST.

Link My Books will hook up to your eBay account and every time a deposit is made by eBay, Link My Books will check how much does this relate to in terms of sales and revenue, how much stock has it cost this seller, how much money has this seller paid in terms of fees, how many refunds have been made, etc., and this all happens automatically so you don’t have to do anything. It takes Link My Books seconds to do this and if you were to do it manually, some experiments show it would take 20 hours a month. So I would highly recommend this tool.

There are a number of similar tools out there. The most famous one is A2X but the price is considerably higher than most.

So to recap, Link My Books will summarise all the transactions you have made and it will post them to Xero which is great. Link My Books is great but if you are not selling you don’t need this when you don’t have any income.

If you are a new seller with expenses only – start with my Expense Tracker and keep a record of all of your costs.

Once you start growing, selling and more costs, upgrade to Xero. Also, using Link My Books will be the easiest when GST is involved.

The bookkeeping process will be done automatically and you will get the information to your Accountant in a format they can use saving you costs.

If you have any questions with eBay, accounting or bookkeeping process or Xero please email me.