Accounting is a profession that, in many ways, has stayed the same for well over a century. However, the advent of eCommerce businesses has brought new complexities to accounting work, and has even led some bookkeepers and accountants to specialize in eCommerce accounting. While you may not be an accountant yourself, you will need to understand the ins and outs of eCommerce accounting to determine if an eCommerce accountant is the right choice for you and your business.
And if you’re new to eCommerce accounting, you’ve probably got a lot of questions. For example, what is an eCommerce accountant? How does eCommerce accounting differ from traditional accounting? Do you need an Amazon accountant or similar specialist for your online business? Finally, is there a tool that can automate your eCommerce accounting for you?
In today’s guide, we will answer all of these questions and more, so let’s get started!
In some ways, an eCommerce accountant is exactly what it sounds like: an accounting professional who specializes in bookkeeping and accounting for online businesses. However, this doesn’t really tell you much about what an eCommerce accountant does and why they’re a necessary addition to many organizations. The reason that eCommerce accountants can be necessary is that eCommerce platforms have many nuances that are specific to the business of selling online.
For example, most brick-and-mortar stores don’t have to worry about the costs of selling on a specific online platform like Amazon, eBay, or Walmart. Businesses that sell in a specific location also have different tax obligations, often ones that are simpler and far more straightforward. Even reporting profits and losses is unique to eCommerce businesses, as you may sell on multiple channels and need to reconcile all of this data.
These are just some of the issues that an eCommerce accountant is cognizant of and knows how to manage. An eCommerce accountant understands the unique circumstances and financial implications of running an online business and has the knowledge and experience to help you navigate your books with confidence.
Determining whether or not you need an eCommerce accountant depends on various factors specific to your business. You’ll need to do a full cost-benefit analysis of acquiring an accountant and determine if your business actually requires an accountant or simply needs automated accounting software that you can use on your own.
Here are a few factors to consider when deciding if an eCommerce accountant would be right for your business:
● Bookkeeping Needs - Do you have complex bookkeeping and accounting needs? Do you struggle to reconcile the numbers from multiple selling channels on your own? Do you worry that you’re not maximizing profits due to a lack of proper bookkeeping? If you answered “yes” to any of these questions, then an eCommerce accountant could be a good solution for your business.
● Tax Complexities - As previously mentioned, taxes can be a little more complex and nuanced for eCommerce businesses. You might sell in areas with different tax rules, including different countries around the world. Managing these tax obligations can be time-consuming and stressful, especially if you’re unsure how much you owe or to whom you owe taxes. An eCommerce accountant can take all that stress away by managing your business tax filing on your behalf.
● Increased Accuracy - Even accountants can make mistakes, but they are far less likely to make mistakes than the average business owner. If you want to have greater confidence that the numbers you see are 100% accurate, it may be worth the time and money to seek out a qualified eCommerce accountant.
● Personalized Advice - One of the greatest benefits of an eCommerce accountant is getting personalized advice for your business. They can go through all of your books, review your P&L reports, evaluate your inventory and sales, and give you educated and actionable advice to improve your business.
● Risk Management - Finally, eCommerce accountants can help you identify and mitigate potential financial risks before they become an issue. This can include a wide range of risks, from fluctuations in your industry to changes in regulatory compliance.
Something that many business owners don’t understand about accountants is that they can only work with the information you give them. If you hand them a pile of disorganized numbers that are mismatched and do not sync with your accounting software, they might tell you to come back when you have things a little more organized. Even accountants cannot wave a magic wand and turn a mess of numbers into clean financial reports. Fortunately, this is where ConnectBooks comes into play.
ConnectBooks can organize your eCommerce bookkeeping and prepare everything so that an accountant can step in and do the rest of the work. Here are just a few of the benefits of using ConnectBooks before reaching out to an accountant:
● One-Click Data Syncing - Automatically integrate your accounting software (like QuickBooks or Xero) with your eCommerce platforms to ensure that every single transaction is synced with 100% accuracy.
● Real-Time Transaction Updates - ConnectBooks keeps your transactions updated to the second, ensuring that your accountant is always working with the most recent and relevant information. This can be especially useful if you’ve dealt with sluggish accounting software in the past.
● Detailed Reports - ConnectBooks produces detailed and customizable reports to evaluate profits, losses, expenses, inventory, and much more. These types of reports make it even easier for an accountant to give you actionable advice for your business.
● Automated Fee & Expense Tracking - Keeping track of fees and expenses across different eCommerce platforms can get confusing, especially since each platform has unique fee structures. ConnectBooks automates fee and expense tracking so that you don’t have to, making your accountant’s job even easier!
● Bank Reconciliation - ConnectBooks ensures that the transactions you see on your selling channels match the money that’s actually deposited to your bank. This is an extremely important feature for accountants, as they will want to know where every single penny is going and ensure that every fee, expense, and purchase is accounted for.
● Inventory Management - ConnectBooks keeps track of your inventory to let you know when certain items are low and even predict what your future orders should look like (based on past purchase history). This is yet another feature that can help your accountant give you advice to improve the profitability of your business.
● Tax Code Categorization - ConnectBooks can help your accountant manage tax compliance by automatically categorizing transactions based on relevant tax codes for each purchase. This simplifies the process of collecting and remitting sales tax, and ensures that your business stays compliant with the most updated tax regulations.
If you decide that an eCommerce accountant is the best solution for your accounting needs, it’s imperative that you find a quality accountant. Fortunately, we make it even easier to find an eCommerce accountant and online business expert in minutes! By combining the knowledge of a trained eCommerce accountant with the automated power of ConnectBooks, you can greatly enhance your business for the future.
Do you want to learn more about eCommerce accounting? If so, reach out to the experts at ConnectBooks today!
