Amazon Seller - Get an accountant / Do it myself?

[sraza]

Hey everyone,

Let’s start with a background and my current position, just so it helps people reply relevant to my situation.

I’m employed full time and take a salary every month and I’m now looking to start a private label Amazon FBA business on the side to earn extra income.

My UK limited company was formed on November 2018 which is currently dormant and I’m the only director / shareholder of the company with no other employees. I’m not VAT registered yet as I don’t know how well my private label product is going to do just yet.

I’m new to accounting as a whole and never been self employed / sole trader / ran a company so don’t know what to file or how to do my bookkeeping. Can you guys give me advice on doing my accounts please? Also, should I set up a payroll for myself or can I just take dividend from my limited company without paying myself a wage?

Accountants in Birmingham, UK are quoting me between £600-£800 a year with one accountant saying they will charge £400 a year. The problem is I don’t think most of these accountants have dealt with Amazon FBA, especially the £400 a year one, and I’m not sure what to provide the accountant as a report from Amazon sales either, since I’ve never made a sale on Amazon.

So what should I do? Go with an accountant or do it myself? Does anyone use an accountant in the UK that is affordable (around £400-£500 a year) and has dealt with Amazon FBA sellers?

I’ve had a look at Quickbooks / Xero + A2X but it’s a lot of money for my budget.

I’ve also looked into Kashflow + ConnectMyApps and this one seems reasonably priced, but I’d like to know if I go with this package, will it cover everything for my accounting needs? Will I be given the files from Kashflow to submit to Companies House / HMRC in the correct format?

Are there any other things to consider if I was doing my own accounts?

Thanks!

 

[Mr D]

Amazon FBA isn't any different than anything else. These days a chunk of accountants will likely have come across fulfilment companies being used. Amazon is one of many.


You could, if you really wanted, do your accounts yourself. Most limited company directors appear willing to pay someone else to do it because its more cost effective that way.
Those prices look nice and cheap. Everyone quoted me much higher 6 years ago.

Sit down with an accountant (or email them / talk on phone if distance away) and figure out if you want them having your work. You don't have to go with the first one you speak to.

Figure out with the accountant what software to use for the bookkeeping - some use free software.
Your bookkeeping should be fairly easy - every month print a monthly summary of the amazon payments and expenses (date range report) then you have 12 pieces of paper to enter on the software with income and expenses. Your other expenses you keep receipts and enter into the software.

You can if you want take a wage from the business. Its taxable. Or not take a wage - you can leave money in the company for dividends or future use.
Dividends can be taken, they have their own small tax allowance separate from your personal tax allowance your employer uses with you.

 

[Alan]

Any reason why you are doing it via a limited company? My general thoughts are that for a limited company you need to pay some one to keep you legal - HMRC says "There is no requirement for companies to use a professional accountant to prepare their accounts. However, directors should be aware of their legal responsibilities regarding accounts and if they are uncertain about the requirements they may consider seeking professional advice."
and the cheapest might be a false economy.

Being self employed, in my book, if your are under the VAT threshold, it is much simpler to keep legal. Count your income less allowable expenses - stick it on your self assessment.

As for salary / dividend, you can pay yourself a dividend, if the company makes a profit, you can pay yourself a salary even if the company is making a loss. As you are already earning PAYE you will be clocking up national insurance, so no need to pay a salary for that purpose. Of course you need to consider tax band impacts of both salary and dividend.

So in summary, knowing nothing of your need for a limited company, or your business plan, based on assumptions that you are just trying this out and your profits likely be less than £6,205 p..a. I would keep the company dormant and register self employed and claim that you won't need to pay class 2 NI

 

[sraza]

Thanks for your replies, brilliant advice and tips.

Just to answer why I formed a limited company. I decided to go with the limited company route because I am planning to expand the business services into other areas down the line, not just for Amazon FBA. So I thought I'd make it limited rather than a sole trader.

Also, for Amazon I've read that changing your seller account later can be a pain to deal with and can also mess with your Amazon listing.

That being said, the cheapest accountants who were quoting me £400 have dropped their price even more as I haggled them quite a bit. Originally they were quoting £500 p/a, but looks like they really want to do business with me. I'm inclined to try them out but if I can do it myself, I'm happy to.

I logged into Companies House Web Filing service just to get a general idea of what to expect when it comes to doing the accounts, and a lot of it doesn’t make sense to me (I only have the current values to fill in as it would be my first set of accounts):

Micro-entity Balance Sheet

Called up share capital not paid

Fixed assets
Total fixed assets

Current assets
Total current assets
Prepayments and accrued income
Creditors: amounts falling due within one year
Net current assets (liabilities)
Total assets less current liabilities
Creditors: amounts falling due after more than one year
Provisions for liabilities
Accruals and deferred income
Total net assets (liabilities)

Capital and reserves
Capital and reserves

Please confirm the statements below.

[ ] For the year ending 30 November 2019 the company was entitled to exemption under section 477 of the Companies Act 2006 relating to small companies.

[ ] The members have not required the company to obtain an audit in accordance with section 476 of the Companies Act 2006

[ ] The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of accounts.

The accounts have been prepared in accordance with the micro-entity provisions and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Date of approval of accounts
Name of the approving director
Additional approving director (if any)​

Can someone guide me through the fields please?

Are there any Amazon sellers on here that are doing their own accounts who can give me real life examples with this? I'd love to get 1 to 1 training on this, happy to pay for training.

Or are there any workshops for this kind of stuff that I can attend (online or via Skype if possible)?

I’m guessing the Called up share capital not paid will be £1 as I’m the only shareholder of the business (company has 100 shares at nominal value of £1 each) but the rest is a little confusing to me.

Looking forward to some advice in this regard too.

Thanks!

 

[Scalloway]

I’m guessing the Called up share capital not paid will be £1 as I’m the only shareholder of the business (company has 100 shares at nominal value of £1 each) but the rest is a little confusing to me.

You are guessing wrong. If the company issued 100 shares of £1 then called up share capital not paid will be £100.

There is a guide to Micro Entity accounts here

http://files.mercia-group.co.uk/Micro-Entities.pdf

This is the spreadsheet I use to prepare the accounts

https://imgur.com/gallery/CPfENkC

 

[dan19900]

Better off starting as self employed, can easily do your accounts yourself then. Can also switch to ltd when you reach the VAT threshold and start again.

 

[Mr D]

Better off starting as self employed, can easily do your accounts yourself then. Can also switch to ltd when you reach the VAT threshold and start again.

Can create problems on amazon though. Multiple people have reported delays of months, including suspension for months.
No idea if FBA stock would need recalling to be sent again on new account or if existing account changed then sold from same account with existing feedback cancelled.

 

[Pish_Pash]

Stick with your limited (as changing your trading status with Amazon later will not go well) & if one of the avenues you're goimg to also explore is B2B...being limited carries a certain gravitas (vs for example a sole trader trading under the name of "Bob's Widgets")

Amazon FBA & accountants - frankly they won't care about FBA ...in your accounts software, things will be categorised under sales, or fees/commision etc (so to an accountant it's just more of the same - they don't/won't need to know the intracies specific to FBA)