Category Archives: Q&A

How to Run “End of the Year” Inventory & Sales Reports for Tax Purposes

year-end-reportsI admit the topic of “end of year reports” is not all that exciting, but it’s very necessary… in fact, if you don’t do this right it could have some negative impacts on your business.

No matter if you sell on Amazon as a serious income stream or as an occasional hobby, you’re still required to report your income to the IRS. It’s important to know that there are several reports you should be sure to send to your CPA (or whoever is doing your taxes).

Before we go any further I want you to know that I am not a tax specialist or giving you any tax advice. I highly recommend hiring a CPA who is knowledgable of online sales and all the tax implications. Today, I’m only showing you how to get the reports that you need to add to all of your other 2016 tax documents.

dec-31-calendarOk, there is one report that you MUST run on December 31st (or at the very latest, early in the morning on January 1st). This report will let you know how much inventory you have still stored at Amazon at the end of the year. The reason you need to run this report on December 31st is because, as far as I know, Amazon does not currently have an easy-to-use report that tells you what inventory you had in their FBA warehouses on specific dates in the past. The only way to get an accurate printout of the inventory you are rolling over into 2016 is to run this report on December 31st or early on January 1st.

Screen Shot 2014-12-23 at 12.09.38 PMTo pull this report, follow these simple steps:

  1. Log in to Seller Central.
  2. Hover your pointer over “Reports,” and then select “Fulfillment.”
  3. Under Inventory, click on “Amazon Fulfilled Inventory” on the left side of your screen. you might have to click “Show more” to find it.
  4. Click on the “Request Download” button.
  5. The report status column will state that this report is “In Progress” until it’s completed.
  6. Once the report is completed (usually a minute later), a “Download” button will appear. Press it.
  7. Your report is now downloaded to your computer as a .txt file. Open up the file.
  8. Screen Shot 2014-12-23 at 11.11.07 AMThe text is hard to read, so select all the text (Control A for PC users or Command A for Mac users).
  9. Open up an Excel type spreadsheet and paste the text you just copied. The data will now be more organized.
  10. Save the file with a name like “2016 Amazon Year End Inventory.”

Note: Do not print this document out. If I would have printed my document out, it would have used 784 pages. That’s because the document also contains all of the items in your inventory that are sold out and are at zero quantity. If you rarely (or never) delete any of your MSKUs that you no longer use (because you’re sold out and don’t plan on selling again), then you may have a file even longer than mine. So don’t print the file, but do save it and email it to your CPA (or whoever is doing your taxes).

Other reports on the same Reports/Fulfillment page that your CPA would probably like to see are the following:

 – Monthly Inventory History – Found under Reports, then Fulfillment, then Show More, then Monthly Inventory History. Click on the Download tab and run this report for the full year (choose “last 12 months” for the report time period) and it will show you a monthly breakdown of what you sold each month.

Screen Shot 2014-12-23 at 12.08.03 PM– Received Inventory – Found under Reports, then Fulfillment, then Show More, then Received Inventory. Click on the Download tab and run this report choosing “last 12 months” as your time period. This shows what inventory items Amazon received from you this year.

Note: As with the “Year End Inventory” report, be sure to move the report over to a spreadsheet program (like Excel or Google Sheets) so that it’s easier for you or your CPA to read.

When you run these reports, don’t forget to choose “last 365 days” or “last 12 months”  for your report dates. You want the reports for the whole year, not just the current month.

Screen Shot 2014-12-23 at 11.04.28 AMYour CPA would also like to see a report of your sales, fees, and income from Amazon. The way to find and run this report is a little different than above, so here is how you do it:

  1. Log in to Seller Central.
  2. Hover your mouse over “Reports,” and then select “Payment.”
  3. Click on the “Date Range Reports” tab.
  4. Click on the “Generate Report” button.
  5. Select Report Type: Summary
  6. Select Date Range: Custom
  7. Enter in the date range you want. For tax purposes enter “01/01/2016 – 12/31/2016”
  8. Click “Generate” to get the report started.
  9. Once the report is ready, it will be available to download.

Note: If you are running this report before December 31st, then the report will not be ready to download until January 2nd. Set a reminder somewhere to come back and download the report on January 2nd. If you are running this report after January 2nd, then it should be ready to download in a few minutes.

Get all of these reports to your CPA ASAP. You really don’t want to be late on getting the tax process started. Again, if you don’t have a CPA, I highly recommend getting one as soon as possible. It’s costly, but you want to be sure your numbers are right, and you want a professional to do the work that would eat up way too much of your time if you did it yourself.

Of course, these aren’t the only numbers you’ll need to give to your CPA. They will also need to know your cost of goods (you logged your receipts, right?) and any other business-related expenses that will deduct from your sales numbers.

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Ok, 2016 is almost over. What other things are you doing during the last week of the year in order to prepare for 2017? I’d love to hear what you’re up to this week!