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how to do accounting for dropshipping

Published on: January 14 2023 by pipiads


yo, what's up, guys? it's your boy, jordan, back with another ecommerce video and i got some awesome stuff to tok to you guys about in this video. in this video, we're gonna actually be toking about how to track your profits and stay on top of your bookkeeping. this is one of the most important parts of your business and a lot of people barely tok about this, probably because it's not sexy, is boring and it's not something that is enjoyable to do. but if you don't manage your books properly, it could be so easy for you to end up losing money, and I know that's happened to me firsthand. so I figured this video was essential to bring to you guys. so look, anyways, we're gonna get right into it. but if you'd like to quality my content, give me a thumbs up and hit that subscribe button down below. also, join my facebook group. there's over 5,000 people in there so you can network and meet up with other ecommerce entrepreneurs. but hey, enough of that, let's get right into the video, all right? so, like I said, bookkeeping is literally one of the most important aspects of your business. it's not something that is going to make you more money, right? it's not something that you do and immediately see a result out of, but it's one of those things that if you don't do it, your entire business could crumble and fall beneath you. and the thing is there's a ton of ways out there to manage your bookkeeping and do it. and that's kind of what I wanted to make this video about, what has worked best for me and what I would suggest to you in your position as an ecommerce entrepreneur. so what I was first starting: I had taken my business and we were just testing products and spending money on ads and spending money on Aliexpress, and it was just money, money, money going everywhere, losing money each day, making money a little bit on one day, and the thing is I wasn't tracking it at all. there was nothing where I could look and see: hey, we made this much profit today. hey, we lost this much money. so all that I was looking out was the number of my bet count and if it was good, there was money in there, I gave it a thumbs up. if I was like negative or starting to lose money, that was a bad sign. and the thing is, while sure, this may be an OK way to manage your finances, if you do it like this, especially at scale you're going to fill your business is not going to be successful, you're going to make no profits and it's not going to be something that is sustainable. so I highly suggest- even if you're not making profits yet, even if you're not making good money yet, that you stay on top of your bookkeeping from day one of starting your business. I'm toking that first ad, that first campaign you launch. you need to write down: hey, we spent $40 on this specific day and we got one sale, so we spent $7 on out of the Express, and that way you can look back on your whole entire month and say, look, this is the profits that we've made and it makes it so much easier for yourself and for your state of mind that you can scale your business heavier. or you need to know when to kind of pull back and make some adjustments to what you're doing. so what are the best ways to manage your bookkeeping? so in the past year been kind of going through a ton of different options and I have two huge suggestions for you guys trying to figure this out. so the first one is for the people who are just getting started out, the people who are just making a little bit of money, maybe not making any money at all, just spending money on ads and spending money for filling orders. what I suggest to you is to set up and Excel or Google spreadsheet now. on this spreadsheet you're gonna want to include all of the expenses of your business and all of the revenue streams of your business. so, for example, the way that mine looks, I'm gonna pull it up right now and I'm gonna read out two columns. I'm not gonna show you guys my books because I don't really want to do that, but I'm gonna read to you the columns that I'm using on my specific documents. alright, so on my document, I've put in the date, the gross revenue, the discounts. so when somebody comes to your store in charges with a discount, I put that on there because you want to account for everything. I put the returns for that specific day and then I do a net revenue column. so it's all those values added up and subtracted to equal the net revenue. from there I do the cost of goods sold, I do the ad spent and I do the transactional fees and then right after that, that's gonna put an equation to where I can fill in my net profit and I can see the exact profit margin of how I'm doing. so this isn't an exact one. that is mine, but this is like a template that I've set up, so I'll pop that up on the screen right there you guys can see exactly what I'm toking about and you will be good to go. but that's what I suggested- that people just getting started out- and you can take that and you can input that manually each and every day just to stay on top of everything and be good to go. now, for those who are starting to grow and scale their businesses, I have a better suggestion for you guys. I found this awesome service that I've been using a ton recently. it's called bench and essentially what it is is. it's not that expensive. each month, you have a whole entire team of bookkeepers come and manage your books every single month. they log in to your PayPal, your bank accounts, your Shopify accounts and they track everything individually and they input it into a bunch of different reports that you can view each day and each month to stay on top of your finances. and this has been a game changer for me. I've been using the service for the past month and a half now and it really allowed me to give some more insight into how my business is actually performing month over month, which is something that I had before with the document, but it wasn't as organized and delivered to me in such a good fashion. so I'm a huge advocate for bench now. I think it's an awesome service and it's something that I really suggest that you guys look into. if you are starting to scale your store, maybe if you're doing about 500 to 1k plus a day, this is when I would start looking to get into a software like this, because they make the process hands-off for you, so you don't have to focus on it at all. you don't have to spend any time at all each month bookkeeping. you just need to look at the documents every month and stay on top of it. also, another big plus for them: I kind of got screwed over doing taxes last year. this is the first time my doing it myself with bench. they'll actually take your documents and they'll present it for you so you can take it and just hand it over to an accountant for tax season. so honestly, guys, I think it's an awesome service. I think it's something that you could look into. so if you're interested in like figuring out more about bench, I've put a link like down below to check it out and maybe you guys could sign up see if you like it, and I think they also give you like a free month of service if you sign up. so highly, suggest that you guys give bench a go. I've just started using it recently, but I have friends that also do big numbers that use it and they stand by it heavily. so it's kind of a newer service. I figured I would make this video now. I kind of put you guys on and tell you what's working best for me. yeah, guys, so that pretty much wraps up how I'm doing my bookkeeping. I use bench. now. bench, like I said, has been great for me, but prior to using bench, I used to input everything manually and stay on top of that, and me personally, I'm kind of a lazy person. from time to time I can get a little unorganized with various points in my life. so having a team of people dedicated to doing this has made everything easier. so if you're just getting started, get your spreadsheet, do it yourself. that's going to be the best value for you. but once you start scaling, just get a team, get people doing it for you so you don't to focus on that and to focus on the income-producing activities that are gonna make.

How to get dropshipping accounting done right

hey guys, since this video, I'll tok about how to make your drop shipment accounting a simple right and how to manage it without any issues, and I'll tok about specific platform that you can use for that purpose. so, basically, the platform this you can utilize for make all of your accounting very streamlined, right. so if you don't want to have any tax issues, if you don't want to have any IRS issues, if you don't want to have any accounting issues and waste like tons of time for this, you know, and that's specifically you know, if you're doing the booth volume with your drop shipping business, this platform is for your notebook, exactly. you know how you you can utilize it, how you can basically get the full advantage out of it and how to simplify it and say you can probably, you know, do your some your bookkeeping alone or you can work with someone, but if you want to build like a massive business, you have to delegate. you have to basically free up your time from those. you don't like lower value tasks and was it like? so accounting this task, which is like low value but at the same time, is very important right. so you want some professionals to handle it right and you have to. you have to delegate, right. so you must delegate it, because you know if you do it manually, just you just not the most effective use of your time, and I would say like 20k per mass is a good trash hole for investing into professional accounting services, maybe even earlier, right? so if you have a company, if you have LLC, then you definitely need you know how pooses and why I recommend bench. so branch is a service that I recommend for a bookkeeping right, for accounting, and it integrates directly with Shopify, which is awesome, right. so all of your, all of your transactions, all of your sales, like, integrate directly with bank. so all the accounting is very, very easy to do. and also, you get the dedicated like Account Manager, right. so whatever the plan, you can see all of their plans here. all right, so every plan comes with a dedicated book bookkeeping team. by the way, if you want to sign up for bench, there is a link below this video that you can use to sign up. you get like a free trial, so basically to work with you through 1 months for free, though basically help you out as much as possible, and you didn't, you didn't even have to pay for it, right? so just click on link below: sign up for this, you know, free trial with them. if you, if you're looking for this accounting service, if you want to free up your time from this, right so they get like this service. they have dedicated bookkeepers right, just for you. they have a drill humans, right, people who are, you know, do this like 24/7. so, like I always think about anyway, where it's like you have to focus on something that drives the most, you know, factor and the rest of other things, just keep people that do this stuff like 24/7. so, for example, if you do your own like video editing, it's not smart use of your time. you have to give your video editing to to someone who does it like 24/7, who's very good at it, right, so the same with accounting, right, so they're team. like imports, advanced statements. they like categorize transactions and prepare financial statements for you every month, right, so basically, simplify everything for you. they work in-house and their response was in one business day, which is like good communication, like everything can get sorted very fast. so, financial data: they provided financial data, master, financial statements and expanse overviews. so, instead of like just plugging it yourself, from what different sources? just you just use the service. they do do all for you. you just review it, see what may be like expenses you can eliminate, maybe some things you can adjust, and basically have the full, full picture of your business right and at a glance. visual reports help you to see the big picture and give you actionable insights to help you grow your business and you assume, basically, you'll never be in a dark anymore. right, so you can see here basic about how it works, right, all of their, all of their, like, all of the business insights you can see here, like cash, right, like real-time flow, a real-time cash flow tracking. right, so everything is provided in the reports. like this, very like powerful, very easy to understand. so it's just amazing. like powerful financial reporting bookkeeping software. like everything is very like they have. they have like closer demonstration you can see, basically it's very, it's very like straightforward. so this software basically simplifies a lot of those things for you that you would just you would be spending a lot of time for, right, so basically how it works. they introduce you to the dedicated bookkeeper, right, so once you sign up, don't get to know your business. show you how badge works and, yes, sir, ever seen they need from you and that each month your bookkeeper imports your business transactions and gets to work on your book, book books and if they need anything from you they'll get in touch right. so you have this like transparent to communication first for what they do, what they do best. you do what you do best like tell your ads managing your business, hiring people like, and they just you know this part is just taking you know care of right so easily you can easily track business help with real time and mostly financial reporting at tax time. they sent, as they send you everything you need to file right. so no like gathering you know, like resources from different sources, exporting you know statements and stuff like that. so everything do you need like they'll just provide you so you can file your tax returns, get one-on-one support when you need it right and bench also gives you like dedicated bookkeeper supported by a team of in-house experts, and they're there to take you know tedious like financial, admin and bookkeeping stress off your plate for good, right. so all of these services guys, um, again, there's like there's like free trial. use them, you can try it out, see if it's like good fit for you. there's a link below this video that you can use to sign up for this service. if you like it, you stay with them. if not, you know it's fine, but I'm sure you'll like it. that they have- they have a lot of services- is one of the is like America's largest bookkeeping service. right, it's like they. they have. they have a lot of customers, specifically ecommerce businesses, so I highly recommend them. click on the link below. sign up for this service is just free. up your time, especially if you already like having good traction with your business. just get it out of your plate and spend the time on what matters most. my sweet guys, if you're looking for helped, you know, scaling your business to the next level. how cuz your facebook ads, help with your ecommerce store conversions, overall, help with our infrastructure, then I click on the link below- there's a link in the description why- for a free strategy session with my team where we'll help you to basically scale your business to the next level. if you're a good fit and we'll be working together on this, and then, if you liked this video, please let me know what you think in the comments. subscribe to my channel. I'll be. I'll be sharing basically services and things that I have found valuable that you know you can you utilize for yourself so you can free up your time. you can make more money and you can, you know, make your business more efficient. so click on subscribe button. subscribe to my channel. I'll see you guys in the next video.

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Amazon FBA & Dropshipping Accounting A to Z

what's up, champs, welcome it to today's video. my name is Sharon Peterson, I'm a full-time, seven-figure Amazon seller, and today I'm going to save your life and I'm going to take the stress of accounting and bookkeeping off of your plate. this is something that a lot of Amazon sellers face. a lot of e-commerce sellers, entrepreneurs, small business owners deal with their accounting, their bookkeeping. how do you track your expenses? how do you make sure you know that you're profitable? how do you file your taxes? how do you do this stuff? and a lot of times it stresses new business owners, and I was in the same situation. I did not know what to do, and so today I finally found the solution, and I'm gonna show you step-by-step how to it: delegate bookkeeping to someone else. that is not going to break the bank, and it's not a 2x, it's not QuickBooks, it's not fetcher, it's not helium 10 profits, it's something even better. so I'm really excited about today's video and, before we dive into it, I just want to welcome everyone that is new to the channel. if you guys have not yet subscribed, go down to smash the subscribe button, like this video, and drop a comment down below for the YouTube algorithm. it would really help me out and I just want to say thank you guys and, without further ado, let's dive into the video. okay, so I want to start off by telling you guys a story so that you guys learn from my mistakes and you don't make the same mistake that I just barely made. okay, it's a disaster. I'm embarrassed to even explain what happened to me, but there's two morals to the story and I'll kind of break it down. so, 2019: I scaled my business I was doing really, really well, and one thing that I did not do well was bookkeeping, keeping track of my expenses, accounting and all of that stuff. it was something that stressed me out. it was something that I was like I'll do it later. and at the end of the year they came tax season, January. I go to my CPA and I'm like, hey, I need to file my taxes. so I give him my stuff. and, long story short, it took him a ton of time to go through and basically file my taxes for me, because I did not do it for the previous year. so instead of it costing me $500 for him to file my taxes, it ended up costing me over $2,000 for him to take his time to get everything organized and prepared. so that was the first lesson. I did a horrible job of tracking my expenses and I wasn't doing it properly. I was using software tools that was basically useless and it wasn't helping me. so fetch her helium, ten profits, those nests, those aren't necessarily accounting software tools, and I learned that the hard way. so that's the first thing that I learned is, don't be using these software tools that that you think are just gonna solve your problem, because it didn't. I learned the hard way. don't do that. the second thing that I learned is I wasn't tracking all of my expenses, and these software's weren't either. there's a lot of FBA fees, a lot of other expenses that I was unaccounted for, and at the end of the year that was a total of $40,000 that I should have written off. and I'm going to do it. I'm gonna amend my, my tax return, which basically means I'm gonna go back to the government and say, hey, I actually didn't make that much. I need to subtract $40,000 and that's going to put twelve thousand dollars of tax savings in my pocket. at a 30 percent tax bracket, $40,000 is about ten, twelve thousand dollars. so I made that massive mistake. so those two mistakes, literally. if I would have caught that and if I would've had to pay my CPA that much money- that's $15,000 that I literally just wasted because I didn't do my bookkeeping properly and I I wasn't tracking the things that I that I should have been tracking. so I it's been a nightmare and I know there's a lot of Amazon sellers that are in the same situation. so what I want to do is break down a new solution and, like I said, it's not a 2x, it's not QuickBooks, it's not fetcher, it's not him ten profits. it's a better tool that's even cheaper and I'm gonna show you. so the first thing that I want to point out is, obviously you're trying to do it yourself. it's a lot of time, it's a lot of headache and hassle. you're gonna come tax season, you're gonna pay your CPA a lot more than you should have, when it should have just been done right, and doing it right isn't going to break the bank. so I'm gonna show you guys exactly what that is. so we're going to come over here and dive in my screen and, as you guys can see, this is a 2x and I just want to show you guys the pricing plans of the different alternative softwares that you could be using to keep your bookkeeping and accounting in tracked, and a lot of people were telling me: oh, use a 2x, so it's gonna cost me 69 bucks a month, depending on how many orders. so between 69 to 139 bucks every single month. and then you need QuickBooks to integrate into that and my plan was 70 bucks. so just those two services was over $150 and that's not including someone doing it for me. I still have to go and think and worry about it and decide: okay, how do I categorize this or how do I do this or how do I do that? it's, it's stressful. so I had those two. and then also there's fetcher or helium 10 profits, which are great tools just to know your profitability, but for accounting purposes and to file taxes, it is not the solution and it's something that you really can't do. I like being able to see the profits on a daily basis. yes, that's great, but don't do it for accounting. so these three services- a 2x, QuickBooks and fetcher- I was using and that's basically like $300. I was paying every single month and my accounting was still not done. I still had bookkeeping to do. I had to go every single week or every single month and do with the accounting and the sad part was I was doing it, so I was paying for these softwares services and I wasn't even doing my accounting. and yeah, I could pay someone to go do it. and let's say: take someone, I hire someone, it takes them two, three hours a week, so let's say eight hours a month at 25 bucks an hour. that's what? three hundred dollars or whatever they, whatever the math adds up to be. so, between these tools, hiring someone to do it, six hundred, a thousand dollars, dish to get my bookkeeping done per month. I could do that. but there's a better solution and it's right here and I'm so glad and you guys can hear my voice. I'm very passionate about this because this is something that I've been stressed out about. I've struggled with it and now I have the solution and you guys need. you need to do this because if you don't, you're going to make the same mistakes that I made and I don't want you guys to make those mistakes. so right here, their solution is called bench. they do all the bookkeeping for you at an affordable price and I'm going to show you guys the prices that they have and it's kind of crazy how they offer what they do. but basically they handle your entire bookkeeping a hundred percent on autopilot. I don't have to think about it. when I wake up every single month I know that it's getting done and at the end of the year they prepare all the profit and loss, the income statements, everything and they send it directly to my CPA and I don't have to think about it and that's why I love it. so what I did is I signed up for the service. I took three phone calls. the first was the discovery- discovery call, kind of explaining my business and what's cool, as they specialize in e-commerce and Amazon FBA businesses, so they know exactly how Amazon FBA fees work, they know exactly how the business is structured and a lot of CPA and accounting and bookkeeping friends don't quite understand that and they specialize in this and it's affordable. so that is the the best thing about it. and right here you can click on the link down below I'll dive into a little bit more depth. but you're basically going to start a free trial, so you get one month free of bookkeeping. they're gonna go back there, do your bookkeeping and they're going to tell you basically kind of where you're at and wh.

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Dropshipping Accounting (How To Manage Tons Of Transactions)

so how do you manage a ton of waters or especially drop shipping on Aliexpress, because if you're doing like 10- 20 dollars a day, you're literally bank statements going to have just tons of orders. so this is an issue everyone goes through. this relationship I used to go through. this is an issue a lot of my students and just everyday people having to deal with and I don't know what to do. then I haven't seen anyone post a solution or answer to discretion on YouTube, so that's exactly what I got to give to you guys. so basically, what you want to go ahead and do is either one- okay, so we should not have mentioned in the clip I'm going to show you guys soon- is if you use apps like the essence d xtr, where you basically combine your whole order. so if you have 21s for that, you'll combine it all into one eggs. actually I just paid one going to pay a payment for there's 20 orders saying you pay like 300 bucks and that's it. you'll just have one are the expression section, but 300 dollars. but you know I want to give you guys some more solutions just in case that doesn't work out. so here's a good, proper program showing you guys how to go ahead and manage- or your expression, sections when doing Shopify dropshipping. yeah, the main thing I want to tok about was the accounting stuff because, like I- I imagine even with you know the limited sales I have had, like it's- it's becoming a hassle with all these like individual Aliexpress purchases. so what is what I like the best practikes for that? perfect, so yeah, so there are two solutions. so solution number one appears: have a separate credit card and just for Aliexpress borders. so you could- you know that's pretty straightforward- have a separate card because now that every time you pay that off- I'm not counting, you just look at the end of the month how much you paid off of that credit card. it all is cost of goods because you know that you don't use that. cut off any other issues, and that's option one. and when the accountants need a in-depth breakdown of what happened with that $3,000 invoice at the end of the month, send them the export of that credit card and all have everything. you don't have to sort of look through it and look to see if there's any other expenses. you need a truck just because it's only used for all Express. so that's motion number one. no, option number two is: once you find a winning product, you would first start by working with the supply itself and asked them to do bulk CSV fulfillment. so you go ahead and you know, send them an associate with 30 orders for that day and they'll go ahead and add up those 30 orders out of the shipping cost for the countries on the excel. they'll give you an invoice for, say, $300 for that day's worth of goods and then you just have to pay one invoice that would say our Express third day, rather than have 30 small transactions in card. so that's option number two. but the option number three is you work with a pager where eventually you'll work with the agent that can fulfill several different products for you and they'll go ahead and send me invoices for everything, for all your orders. you just have to pay the occasion directly and that's just one transaction. yes, when you're testing and you'll get one or two off, one or two, one of orders for, like random items that you're testing that you're your agent can help you with, because there's just a one-off product, they're not gonna go ahead and bulk order it just to help you fulfill that one order. you will have to use your credit card for those in one of the orders but what you can do if you want accounting to me, neither it just refund those one-off orders for a product that you test a day for it could be a winner but only got like two, three unprofitable- just briefed on this- three orders, daven, bother fulfilling it, and that I don't know. you might not want three random small I Express transactions on your card and that's one way to avoid that. so those are the multiple different things you can do to really take your accounting much cleaner. that that makes sense. and when you, when you do get a winner, is it is the? is it day? is it like you? you pay the supplier daily, correct, sometimes you could work with at the door per week, usually if it's all expressed directly, like you, just continue with me. the current supply, onyx, partikular, better price. you'll be sending them and make so. she ate every day or every second guy, but every day is preferred because every work being behind, that's how you go ahead and handle those transactions. pretty easy to straight to the point. so there's a multiple different solutions that you guys can use. let me know if they work for you. drop in the comments below. do you do any Bob fulfillment? let me know before we have today journalist. uh, by now Phyllis Otis witness. but now that all of the courses or consoling cause of me, the one is here because I'm a qualified to do shop Kampala almond extract. hit the subscribe button. I'll be picking the best comment, every single video of that. I've got so an amazing day. let me see class tomorrow with much more valid peace.

How to do Taxes in Dropshipping- Complete Guide for 2022

all right. so in this video we're going to tok about how to do taxes with drop shipping. okay, it's a really big topic and it's really important to understand that. it's actually very important to understand this topic only after you start making sales. so if you're just starting out, if you have absolutely no idea about drop shipping, if you never have ran a store yet, don't think about that at all. okay, there's people who figured it out already. so it's possible to do it properly and you shouldn't worry about. all right, this is not going to work out for me and i have to know all the legal things before i even get started. if you haven't gotten started yet, then, number one, this video is not for you. and number two, don't worry about all the tik stuff. okay, at some point after you start making sales, you should actually start worrying about it, because it's actually pretty important to the property. so here we're going to tok about how to do it properly and what to what to focus on. all right, so the very first thing i have to mention is i am not a legal accountant, so i cannot officially advise you to do anything, so this video is going to be only based on my experience. don't take this video as a legal foundation. you should get a accountant or a person who knows what they're doing, all right. so the number one thing for taxes is: it's going to be pretty easy to to do all the tax statements and to do everything properly. if you have collected all the receipts, if you have done everything properly, if you know how much profit you made, how much loss you made, how many fees you paid, how many refunds you had, all those little things will be important and they're gonna screw everything up for you if you don't do it on a consistent basis. everything which goes into accounting is important to understand. that you should not do it in the very end and, with and like with everything, you should constantly do it as a process, okay, and at some point after you start making decent money, you can have a person who's going to calculate the things for you, and it's going to make things much easier for you, okay. so, number one: do everything properly. understand how much expenses you had, how much profits you made. all of that is going to be crucial to make it proper. and also, every single expense has to have a receipt, okay, and this is a thing which i've learned the hard way. in the beginning. i didn't collect any receipts, i didn't do anything. and what is really important to do and what's also pretty easy to do: every time you pay something, it doesn't matter if it's facebook, it doesn't matter if it's your supplier, it doesn't matter if it's a shopify app or shopify subscription- just have a folder where everything is going to be in one place and you do understand where the receipts are okay, and then, if that's already going to be ready, you're just going to give it to the accountant and everything is going to be done so much easier. the other thing is you need to have an invoice for every single person who bought from you. okay, so there's tons of softwares. in germany, we use sevdesk and it's basically a shopify app which makes invoices for every single customer which bought from you. okay, so it's going to be automatik. you don't have to do it manually and it's pretty simple to use, to set up. however, you do need to have it because if people from the government or the people who get your taxes, um, will want those, those invoices, they will need them for sure. all right, so you, officially, are obligated to have them at some point if somebody asks whenever, at a random time, that can actually happen like three years down the line, and they want receipts for 2019, okay, and then you're going to be in big trouble if you don't have that nice organized folder and yeah, that's basically important. also, two very specific things i want to tok about here is number one: get one supplier, and it's going to be so much easier if you only work with one supplier. i added this crucial mistake to keep working with aliexpress and with like a bunch of different suppliers for the first like three months of me doing well in dropshipping- okay, and that was a huge problem later on in accounting, because aliexpress is a pain in the ass for accounting and it's going to be a really, really annoying process. if you had like 20 000 orders, all right, so it's going to be a big, big problem. if you do not like real numbers on aliexpress. it's going to be annoying. so what you should have instead is one agent which is going to be an all-arounder. that person is going to have all the products you're selling and he's basically going to be the supplier which you go for always, okay, and later on you have maybe one more warehouse which you also pay, and that's it, but it's important to have this overview and not have 10 different suppliers, because it's going to be so annoying. and i had this huge issue and it took me like a month or so- and we were basically three people which were full-time working on this- to me- to work it out and do it properly, because it was just such a mess because i didn't care about anything. i didn't do anything properly and after that i felt it. so now i know it should actually be done in the in the first place and you shouldn't wait for it so long. however, keep in mind that accounting feels very productive, but in reality, it's not productive at all from a money making perspective. okay, so you're not going to make more money through accounting. however, it's just going to make your life easier in the long term and also it's going to help you not lose a lot of time at one point, because at that point you're not going to be able to make any money if you don't have any time investments at all for anything else than this accounting thing. okay, so keep this in mind: that accounting is important. you should do it one by one. however, do it only in your free time. after all, the really important things are done, okay. so all the money making activities should be always a priority, no matter what it is. and after that, after all of this is done, the next thing: in your free time, you should actually focus on the accounting. and if you do 30 minutes per week of accounting, you're probably going to be good, all right. it's like 30 minutes per week, one hour per week max, and it's gonna be off all right. however, if you don't do that for like four or five months, it's gonna be a really big problem, and i cannot emphasize this enough because it was such a huge issue for me personally and i had a really, really bad experience with that in a way like it's. it was just insane, okay. and also, if you hire freelancers, you need to understand that those freelancers- if you don't hire them through upwork or through a platform where it's super easy to get the, the receipts and the invoices, then it's going to be also a problem. if you just privately hire a person, they have no idea how to do anything and you don't really ask them for receipts and for invoices, they're not going to give them to you. and the same thing goes for the suppliers: if you don't ask the supplier for a receipt and an invoice. they're not gonna give it to you, okay. they're not gonna actively go to you and send you everything. you need to go to them and ask them: hey, every time you send this, please give me this as well. and if they don't, you have to constantly remind them, put it in folder, etc. and the last thing i want to mention here is facebook ads. so there are scenarios where you lose access to a facebook account and then all the receipts are gone. okay, so that can be a real issue. and if you have some kind of really strong block on that facebook account, you're not going to be able to access any receipts and any invoices and any anything basically at all. okay. so it's really important to keep that in mind and constantly download those receipts- obviously don't be paranoid about it- and do it every day. you basically have to have a report with all the things which facebook- uh, you paid facebook- and you have to have those receipts in a separate folder. it's super simple to g.

Shopify Drop-shipping Taxes Breakdown (With an accountant)

yo top guys, welcome back to another video, and in this video we're going to be covering taxes. lately on my channel, there's been a trend where I just post like 30 to 40 minute video on a specific topic, like Facebook Ads or branding or whatnot, and I haven't had a video like that on taxes. on top of that, I know that there's not even a lot of videos on taxes regarding dropshipping, taxes and how to do it. even the videos that are out there, I feel like most of them aren't real or up-to-date, and I figured that I could probably get some better information if I interviewed somebody that's specialized in dropshipping only and that obviously had an extensive accounting background. so that's exactly what I'm going to do. that being said, I'm not gonna waste any more time. let's get ready for Miami and let's go out there and interview. wait, we got to get ready. hold on, all right, beautiful Miami. we have to prove what we're doing. so in the last video, I went to the stores after we did market research and validated all the products that were sold out there in quarantine. so for this video, I found it only fair that we flat to Miami and interview probably the best accountant when it comes to drop shipping or e-commerce, at least the most well-known. she works with a lot of people I know he knows how to save money on taxes. he knows everything. he's the man I asked you guys for all your questions that you had on taxes on the channel and now we are going to answer all those questions. today we're gonna go in-depth and pretty much this is going to be an all in all tax video. I think we're about to go get a boat right now. we're gonna go and meet him inside right now and we will see you guys there. [Music]: sugar coming more. say in the 911. pull up in a boy shake. I ain't never losing. see from what these [ __ ] say. as you can see, we're not in my bedroom. we are actually on a boat in the Miami canal, Boca ratone, about 45 minutes north of Miami. this is Chris Revere. Chris, I'm just gonna let you introduce yourself. so I'm Chris Rivera. I am an accountant that specializes in e-commerce. we do tax accounting. you know CFO services for EECOM businesses specifically. vast majority of my clients are actually dropshippers, so I have a ton of experience in the space. before I specialize in e-commerce and had my own business, I was actually working at Ernst & Young, which is a big, poor accounting firm, one of the top four accounting firms in the world. so I was there for about six and a half years left there and I started my own business immediately and eventually, during my journey I stumble across EECOM and decided that I wanted to become more niche and and focus on a specific type of client. at first that was a generalist, so I did cryptokurrency companies, real estate- you know, you name it. but again I stumbled across EECOM. actually, my first econ client was Jared gets was very well known or you know all the things he does in the space and really when I saw all the success that he had- and you know I notiked that there were other people in the space that were equally as successful and doing big things as well. so I decided, you know, maybe this is my opportunity to kind of build a niche for myself and and focus on those types of companies. I know you're toking to Scott Hills II and you were able to save him quite a bit of money and you've actually been on this channel. you guys toked about that too. Scott story is a really, really good one, the same type of issue that I'm sure a lot of your followers are also running into where a lot of accountants don't understand the e-commerce space. that really is a huge problem. yeah, exactly so. in Scott's case, he had a bookkeeper that was really, really smart and knew what they were doing, but they were seeing Facebook charges on his bookkeeping reports and they thought it was, you know, personal spending. they thought he was buying stuff on Facebook, whereas everybody knows in the space you know, you use Facebook Ads to scale your business. yeah, so obviously you know if your bookkeeping is wrong and your profits are wrong- and we'll get into this a little bit more later, I'm sure- but your cat, your taxes, what you pay to the government, will be drastikally incorrect if you get your profits wrong. what happens is when you generate more than twenty thousand dollars in sales, those companies are legally obligated to tell the IRS how much money you're making. so basically, what I recommend is, once you cross $20,000 in sales through any single payment processor- whether it's Shopify or Shopify payments, I should say- or PayPal or stripes, etc. then you'll need to report that income on a tax return. so that's really when I recommend that you set up an LLC. to be clear, LLC's aren't super expensive to set up. there's a lot of cheap lawyers out there. they can do them very cheaply. you know there's companies like Legal Zoom that for a couple hundred bucks you can get a legal entity set up. but this is my whole spiel on legal entities, because a lot of times when you're just starting out as an entrepreneur, you know paying $300 for a legal entity might seem very expensive. but the reality is that if you have that itch or that knack to be an entrepreneur now, chances are that's never going to go away. so just having a business entity in place that gives you legal protection in business is a good idea to have, whether it's you use it now or it stays dormant and you start up a business again two years down the road. so I just think if you're interested in entrepreneurship, it's a good idea to have an LLC to always have in your back pocket. it varies on the country that you live in, but we'll tok about the us, for example, although many of the countries have very, very similar tax regimes to the US. but basically what happens is going back to what I was saying before. once you cross $20,000 in sales and, let's say, PayPal, PayPal is going to tell the IRS like: hey, you know sev has $100,000 in sales. you know, expect the tax return. so now the IRS is expecting a tax return. okay, if you don't report a tax return with those sales, the IRS is basically going to make a business decision. like you know, is it worth it to chase this guy down for back taxes if you don't file a tax return? so basically, if you file no tax returned, the IRS is gonna have evidence that you made sales and they have no record of those cells in your system, in their system. so basically what happens is if you pay nothing, don't file a tax return, you know you may get a letter in the mail saying: hey, you owe us X amount of dollars and they completely estimate the number. so don't freak out if you ever get a letter from the IRS that's like: hey, you owe $20,000. iris really has no clarity into your numbers unless you file a tax return. when they send you the letter, they'll send you what they estimate your taxes are and then they'll hit you with penalties and interest, report your actual income to correct it. as any good accountant will tell you, it depends a couple things. number one: something you should look out for is when you sell a store. there's two ways that you can tell your store: you can tell the business entity or you can sell the store itself. generally speaking, what I see in the space is people are selling their stores and perhaps even their ad account, or, if they have a very good, seasoned, vetted PayPal account, that might also be part of the deal as well. it's very likely that you do have to pay taxes when you sell your business. the good news is- and again this is for Americans that I'm toking about- the foreign people all have their own rules, but in the US there's been official tax rates for you if you sell your business and you own it for longer than a year, so that's one good thing. if you're selling your business, absolutely consult with an accountant. it's it's almost like a trend that I see in a space that everyone's saying I gotta have an LLC for every single sorta that I have, and I personally I disagree with that because it can become disorganized, you know, maintaining a bunch of different busine.