Amazon America can be an attractive platform for companies aiming to reach consumers and expand their operations in global markets. However, success on this platform isn't confined to just product quality and customer service. Managing your financial transactions and reports accurately is equally crucial. Accounting standards in the U.S., typically referred to as Generally Accepted Accounting Principles (GAAP), are determined by a set of standards and principles. At TAM Accounting, we aim to explain the importance of establishing a GAAP-compliant accounting process for e-commerce companies operating on Amazon America.

Compliance with U.S. Accounting Standards for Amazon America Sellers

Revenue Recognition: According to GAAP, a business recognizes revenue when a product or service is delivered and payment is received or is likely to be received. Sellers on Amazon America are required to recognize revenue from the moment a product is delivered to the buyer.

Inventory Accounting: Sellers must follow GAAP rules to determine how they value their inventory and when they apply depreciation. This ensures that costs incurred during the process of purchasing, storing, and selling products are accurately calculated and reported.

Calculating Expenses: Amazon sellers must accurately track and report operating expenses according to GAAP principles. These expenses include Amazon sales commissions, shipping and handling fees, advertising and marketing costs, and more.

Financial Reporting: GAAP requires businesses to prepare and present certain financial reports, such as balance sheets, income statements, and cash flow statements. Sellers on Amazon America need to generate such reports that accurately reflect the financial status of their businesses.

Tax Accounting: Sellers on Amazon America are required to do their tax accounting in compliance with federal and state tax laws. This includes accurately recording and reporting taxes collected and paid.

Adherence to U.S. accounting standards is critical for companies operating on Amazon America. By following GAAP principles, you can accurately reflect your financial status and avoid legal issues. However, complying with these standards can be time-consuming and complex.
At TAM Accounting, we simplify this process for companies operating on Amazon America. Whether you're a new company or are expanding an existing business, we are happy to assist you with our professional accounting services.