The Basics of Bookkeeping for New Resellers:
A Step-By-Step Guide
Starting a reselling business is an exciting journey filled with the thrill of finding great deals and making profits.
However, bookkeeping is often the least glamorous—yet most critical—part of running a successful business. Keeping accurate records isn’t just about staying organized;
it’s about understanding your business, maximizing deductions, and staying compliant come tax time.
Here’s a detailed guide to mastering the basics of bookkeeping as a reseller :
When you mix personal and business finances, you create unnecessary confusion. By opening a separate business bank account, every transaction—whether it’s a sale, a supplier payment, or a subscription fee—is clearly distinguished.
This separation makes tracking your business performance and preparing for taxes infinitely easier. Plus, it gives your business a more professional image.
Bookkeeping isn’t just about recording numbers—it’s about organizing them so you can understand your cash flow. Create categories for your income (e.g., product sales, shipping revenue) and expenses (e.g., inventory costs, platform fees, shipping costs, marketing).
When you categorize transactions consistently, you gain insights into your business’s profitability, allowing you to see which areas might need adjustment.
Not all bookkeeping methods are created equal, and the “best” system is the one you’ll actually use. Are you old school? A simple spreadsheet may work for you.
Prefer automation? Consider software like Xero, (I do NOT recommend Quickbooks or any aspect of the company Intuit ever). Start simple and stay simple. My workbook is a simple and cost effective method that also includes business building tools for eBay. When you categorize transactions consistently, you gain insights into your business’s profitability, allowing you to see which areas might need adjustment.
Procrastination is the enemy of good bookkeeping. Set aside time—weekly or bi-weekly—to sit down and record your transactions. Staying consistent ensures your records are accurate and complete, and it saves you the headache of scrambling to organize everything during tax season. Need accountability? I have a 30 minute live YouTube call the first Wednesday of each month as well as a TWO 2 hour bookkeeping calls inside my membership on the first Wednesday.
Inventory is one of the biggest moving parts in a reseller’s business. Know exactly what you have and what you’ve sold. I highly suggest using a SKU system and having it be the last photo in each listing. This is a redundancy measure to help eliminate lost items.
Use tools or spreadsheets to track your average inventory costs. By staying on top of inventory, you can prevent having a death pile, avoid running out, and better understand which products are your top performers.
This might be the least exciting part of bookkeeping, but it’s one of the most important. Resellers often forget that taxes aren’t automatically deducted from their income like they are for traditional employees.
As a rule of thumb, set aside at least 25-30% of your profits for taxes. Open a separate savings account specifically for this purpose to avoid dipping into your business funds.Use tools or spreadsheets to track your average inventory costs. By staying on top of inventory, you can prevent having a death pile, avoid running out, and better understand which products are your top performers.
Reconciling your business bank account ensures that your records match up with what’s actually happening in your account. This helps catch errors, spot fraudulent activity, and ensures that your bookkeeping is accurate.
Plan to reconcile your accounts at least once a month to stay on top of things. If you use your bank statement to help with your bookkeeping in addition to receipts this will become an easy step.
Your profit and loss (P&L) statement is your business’s health report. Regularly reviewing your P&L allows you to see if your business is making money and where you can cut costs or improve efficiency.
Don’t just focus on revenue—look at your expenses too. True success comes from maximizing your profit margins. If you are using my accounting workbook, then there is a mini P&L within as well as a visual for projected income.
By following these steps, you’re not just keeping your books in order—you’re setting your business up for growth and long-term success.
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