[Setup] Step 3: Choose your preferred account and tax rates

Average time to complete: 5-7 minutes
Estimated difficulty rating: Medium (Best to involve your accountant)

***DISCLAIMER***
The team at Link My Books are happy to provide users with technical assistance in applying tax rules to their Link My Books setup. We are not Tax Advisors and so our advice and suggestions on the application of tax rules cannot be construed as tax advice. We highly recommend that users seek advice from qualified accountants for their tax compliance.
***END DISCLAIMER***

Link My Books makes is very straightforward to set your accounts and tax rates preferences using our proprietary Tax Wizards.

Since the process of setting up Amazon, eBay, Shopify and Etsy accounts are different and also Xero and QuickBooks have some unique aspects too, we have broken this help article up into sections so that you can quickly navigate to the section that fits your needs.

The step by step guide linked below covers all sales channels and both bookkeeping platforms.

👉 Step by step guide with screenshots

The video guides linked below are specifically focused around each different combination of sales channel + bookkeeping platform.

👉 Video guides

Step by step guide with screenshots

Step 1 - Map transactions to an account

For each sales channel we group the many different types of transactions into around 9 main categories.

On the first step you will assign an account for each category from the dropdown menus or accept our pre-filled defaults below.

(Using our defaults will create them as new account codes in your bookkeeping platform)

👉 Tip: Most people use our default accounts as it means it's nice and easy to see which data has been sent through from Link My Books to your bookkeeping software.

👉 Tip: Throughout the setup wizard when you see the blue i icon beside something, that means that further clarification is available if you hover over it:

If you'd rather pick your own accounts to use then you can do so via these dropdown menus:

Step 2 - Confirm VAT registration status (UK users only)

Here you will confirm if your business holds any VAT registrations. We use this information to group your sales accordingly so it's important that you select the correct ones.

Step 3 - Optional product VAT groups (UK users only)

IMPORTANT

If completing the wizard after 2nd May 20223, Amazon and Shopify accounts won't see this step as product grouping is now handled automatically. Read more here.

If the products your business sells are all Standard Rated for UK VAT then you can select the top option on this page to skip setting up product groups.

If you do sell any Zero Rated or Reduced Rated goods then you should select the second option and continue to set up product groups.

Link My Books will create 3 product groups if you turn on this setting:

Standard Rated Products
Reduced Rated Products
Zero Rated Products

After the setup wizard you will be able to allocate your products to the correct groups via the Product Groups page which is contained in the Inventory menu.

You will also confirm the tax rate you wish to apply to zero and reduced rated products on this page too. These tax rates will override the main tax rate set for sales where UK VAT is due.

Step 4 - Confirm tax rates

At first glance this may look intimidating but based on your answers you have given so far plus your businesses location (which we have detected from your connected bookkeeping account) we will provide you with a set of default tax rates to confirm.

If you selected that you held at least one VAT registration then your tax rates are broken down into three sections:

Sales
Fees & Other Transactions

For more information on how Link My Books calculates VAT see this article.

👉 Tip: Remember when you see the blue i icon more information is available when you hover over it.

👉 Tip: If you are connecting a non-UK sales channel account or you selected that your business did not hold any VAT registrations then your taxes will be much simpler:

Once you have confirmed your chosen tax rates, tick the checkbox and click Confirm to save them.

Step 5 - QuickBooks bank accounts (QuickBooks users only)

Here you will select which bank accounts each marketplace deposits funds into and which bank account or credit card they charge if your seller balance goes into the red.

This will complete the setup wizard and you will be taken to your settlement dashboard.

If you have any questions about this article or feedback on how we could make it better please reach out to the support team via the blue chat icon on the bottom right of the page or via email to [email protected].

Video guides