Newbie accounting for eBay and Amazon sales in Sage. Please help!

[ProCab]

Good morning,

I am currently using Sage Instant Accounts (and relatively new to accounting/bookkeeping). I run a a small online business and I am not sure about the best way to account for my eBay and Amazon sales.

I have approx 1,000 sales to enter into Sage from our year ending 2012

It is probably worth mentioning that despite having 1,000 transactions to enter I'd like the practice of inputting the data manually at this stage rather than using an import tool such as Tradebox etc.

Here are my assumptions and a few questions for setting up Sage ready to enter the transactions. Any advice would be hugely appreciated. I'm rather lost:

1. Set up eBay and Amazon as customers rather than setting up each sale to a different individual customer with their address and name details?

2. Set up a bank account called PayPal. Ebay sales are paid instantly into our Paypal account. Once every few days we'll transfer this to our current account using a journal entry

3. Our Amazon sales minus the fees are held by Amazon and paid into our current account once a fortnight. I'm not exactly sure how we should account for this. Should we call our Amazon account a bank account and just transfer to our current account once a fortnight?

This is where you realise I'm a real newbie...

4. What is the best way to account for the above transactions in Sage? Presumably I don't want to be setting up individual invoices for 1,000 ebay/amazon transactions? Should I be in in the BANK screen within Sage and click RECEIPTS to enter them in a batch? The problem here I'm not assigning it to a customer, just the N/C for say, Sales A

Could anyone offer me a dummies guide to what screen I should be in and where to account for these transactions? Could you walk be through the most efficient process to:-
Account for ebay sale, payment instantly received into PayPal, fees paid to both ebay and amazon, then the transfer from paypal from our current account?

5. I'm not clear on how to account for our amazon sales (they fulfil for us as well, posting our products from their warehouse). As an example, our headline sales price for product A is £100 on amazon.co.uk. They take a 20% fee and a postage charge. Could we just account for our amazon sale as the £100 - 20% - postage fee as this is what we receive from amazon, or must we account for these costs and enter the headline sales price of £100 as a our sales value in Sage?


Thank for your help

 

[johndon68]

1. Set up eBay and Amazon as customers rather than setting up each sale to a different individual customer with their address and name details?

You can do either but, as I suspect that most of your sales will be one off, I'd just go for a single eBay and single Amazon customer account.

2. Set up a bank account called PayPal. Ebay sales are paid instantly into our Paypal account. Once every few days we'll transfer this to our current account using a journal entry

Yes - use the bank transfer option rather than manual journals as there's less chance of a mistake.

3. Our Amazon sales minus the fees are held by Amazon and paid into our current account once a fortnight. I'm not exactly sure how we should account for this. Should we call our Amazon account a bank account and just transfer to our current account once a fortnight?

Yes, set Amazon up as a separate bank account in the same way as you suggest for PayPal.

4. What is the best way to account for the above transactions in Sage? Presumably I don't want to be setting up individual invoices for 1,000 ebay/amazon transactions? Should I be in in the BANK screen within Sage and click RECEIPTS to enter them in a batch? The problem here I'm not assigning it to a customer, just the N/C for say, Sales A

Could anyone offer me a dummies guide to what screen I should be in and where to account for these transactions? Could you walk be through the most efficient process to:-
Account for ebay sale, payment instantly received into PayPal, fees paid to both ebay and amazon, then the transfer from paypal from our current account?

You have 2 choices - you can certainly post these as Bank Receipts but, as you say, they then won't appear on the customer accounts. If you want then to appear on the customer accounts then you would have to enter invoices and then subsequently sales receipts.

There is, however, no need to enter them all as individual transactions, you could, for example, enter them as weekly or even monthly summary transactions.

You'd enter the sales for the full amount (after all that's what the customer paid, any fees are incidental) and you'd then enter the fees as bank payments. If you do all these through the 'virtual' PayPal and Amazon bank accounts, what is left will be the amount that you actually received from PayPal/Amazon.

5. I'm not clear on how to account for our amazon sales (they fulfill for us as well, posting our products from their warehouse). As an example, our headline sales price for product A is £100 on amazon.co.uk. They take a 20% fee and a postage charge. Could we just account for our amazon sale as the £100 - 20% - postage fee as this is what we receive from amazon, or must we account for these costs and enter the headline sales price of £100 as a our sales value in Sage?

As before, you enter the sales for the whole amount that the customer actually pays and then any money charged by Amazon goes as a bank payment.

John

 

[ProCab]

Thank you for your excellent reply John. I'm in front of Sage now and have a few follow up questions if you don't mind.

For the ebay fees I have created nominal 6105 EBAY FEES. Amazon Fees 6106. I have also set up a code 7907 PAYPAL FEES


1. I have opted to account for the sales using as a RECEIPT in the BANK screen of Sage. I have used N/C 4000 as Sales type A. Maybe I could set up some new nominal accounts in the 4,000 range which are eBay Sales, Amazon Sales, Website Sales so I have a split of the different sales channels? Say 4004,4004,4005. Does this sound sensible?

2. I am processing all transactions within the BANK screen as PAYMENTS or RECEIPTS. Does this sound sensible? I don't see a need to use the CUSTOMER screen at all as given all my sales are online using PayPal or Amazon.


3. The business, a Limted Company started trading in July 2011 with an 18month first year, ending December 2012. I understand that unfortunately Sage doesn't accept years longer than 12m. What is my best way around this?

5. I provided a directors loan to start the company back in 2011. What is the best way to account for this is Sage? Can I charge the company interest on this loan?



Thank you. Your advice is hugely appreciated!

 

[johndon68]

1. I have opted to account for the sales using as a RECEIPT in the BANK screen of Sage. I have used N/C 4000 as Sales type A. Maybe I could set up some new nominal accounts in the 4,000 range which are eBay Sales, Amazon Sales, Website Sales so I have a split of the different sales channels? Say 4004,4004,4005. Does this sound sensible?

Yes, that is sensible.

2. I am processing all transactions within the BANK screen as PAYMENTS or RECEIPTS. Does this sound sensible? I don't see a need to use the CUSTOMER screen at all as given all my sales are online using PayPal or Amazon.

Correct, theres no need, if you don't want, to use customers at all.

3. The business, a Limted Company started trading in July 2011 with an 18month first year, ending December 2012. I understand that unfortunately Sage doesn't accept years longer than 12m. What is my best way around this?

It depends, if you have the start date currently set to July 2011 and you have entered transactions then the date cannot be changed at which point you have 2 choices:

1. Send the data to Sage to change the start date to give you the year end you need which costs, last time I checked, £175+VAT and takes 4-5 days.

2. I offer the same service overnight at half the price.

If you've not entered any transactions so far then you can change the start date - to get the end date you want, the start date needs to be set to January 2011.

5. I provided a directors loan to start the company back in 2011. What is the best way to account for this is Sage? Can I charge the company interest on this loan?

Not an accountant so can't comment on the interest but I'd set the Directors Loan as a Bank Account in Sage so you can easily transfer monies from the DLA to the bank and back again.

John

 

[ProCab]

Hi John,

Thanks again for your reply. Really useful info.

I haven't entered any real data in yet so I can change the start date to Jan 2012. What would I do with my transactions from July 2011 - Dec 2011 though?

Many thanks

 

[johndon68]

You'd enter them as normal with the correct dates, and, when you come to run the Year End as at December 2012, you'll have 18 months worth of figures.

John