Dropshipping Accountant

Dropshipping is not new to our society. Its popularity increased in 2010 when the Chinese market became more accessible with the introduction of Aliexpress in the market. Also, setting up the eCommerce website has become smoother with the introduction of Shopify which was introduced in 2010.

The cost and risks in setting up the online dropshipping business reduced drastically which was a ray of hope for the entrepreneurs and other small business owners who wish to enter the eCommerce world. now in 2021, dropshipping is very common.

So, what is dropshipping? It is the method where the seller will sell products to their customers without holding any stock. In the dropshipping business, they rely on the supplier to store and fulfil the customer’s orders. After a customer checks out or pays for the product, they place the dropship order with the supplier who will then take over the complete fulfilment process.

Ecommerce Business 1

Building successful dropshipping business:

If you are someone who has already established the business that carries the inventory, then you can also use the dropship as an additional fulfilment method for further improvement of the business. For example, let’s say that you are selling loose tea leaves and have set up inventory warehouse and logistics solutions.

To fulfil the orders, you can use dropshipping to offer the products that compliment your primary business without the need for investing in the warehouse. Here are some ways dropshipping help the business grow:

  1. Ability to test the new products – While running a business you might think about expanding your catalogue or you may look at adding additional accessories that complement the main product. You can utilize dropshipping to test the customer demand for those products without over-committing.

This process will help you save both money and warehouse space since you don’t have to find new space to store the products. On top of this, you can avoid the money locked in the products that might not get you profit. You can get all these advantages without compromising on order fulfilment and payment processing.

  1. Lower shipping cost – As the business grows bigger, you may encounter with international transactions since you will have clients from different parts of the world. With dropshipping, you can enjoy the flexibility and low shipping costs that it offers to ship products worldwide. The dropship supplier will serve as an additional base to fulfil the orders especially when the customers are located in other countries.
  2. Compensate when there are unexpected fluctuations in the orders – If you face irregular order volumes or an unexpected spike in demand for the product then dropshipping will be used to further complement the business in fulfilling the orders at these times. With the business supported with dropshipping, you can continue fulfilling the demand for the product without any delay or expensive express shipping charges.
  3. Cut down the storage costs of products – If you deal with the products that need special attention such as high-value products or the products that require special storage conditions then you will spend more money for their storage.

Instead of investing in the costly warehouses that are equipped to protect and store these products, you can just use dropship to outsource storage. As they are already equipped with the facilities to store these products properly and this allows you to save money renting the new warehouse or buying a property where you can set the required storage facility. Ultimately, you will save money while fulfilling the orders on time with the dropship.

Dropshipping & accounting:

Dropshipping – As discussed earlier, it is the easiest, quickest and cost-effective way to start an eCommerce business. One can start an eCommerce business even without a proper storage facility with the help of dropshipping. The dropshipping accounting solutions will also help you ensure that the accounting is made simple and cost-effective.

Dropshipping will be a perfect choice for the eCommerce store and one can even test new products in the existing store. Above everything, it is a time-saving choice, which means you don’t have to spend special time on accounting which will eat your time.

While working in this flexible and creative industry, it’s essential to employ the services of an innovative and forward-thinking accountant. The dropshipping accountant will be up-to-date in terms of technology and software development. They will also be experienced in the eCommerce business and dropshipping accounting.

Alan Chen

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By the end of this Strategy Session, you will have a clear understanding of the next steps you can take for your business to take advantage of the tax deductions you are missing out on.

Just like technology is used to eliminate the need for costlier storage costs and many more, the accountants will also use the technology to eliminate the need for the employees for manual data entry.

online dropshipping business

Potential hurdles that can be solved using an accounting software:

  • Integrating with the drop-shipping platform – While using the dropshipping platform through Aliexpress or any other similar platform you will be probably using Shopify or other related platforms. In this case, using the accounting software which is designed for eCommerce such as Xero will be very helpful. It will automatically feed the transactions to the accounts which include the dropshipping transactions.
  • Accounting for VAT – VAT on the dropshipping supplies can be challenging and tricky especially when you sell internationally. Hence seeking advice from a professional dropshipping accountant will save headaches in managing and editing accounts. The accounts are generally forward-thinking and will investigate about your requirements to provide the best services. They will offer the best VAT guidance which will provide you with outstanding obligations.
  • Transaction history –Keeping track of the transactions is important since you can easily see how much amount is spent and earned in the business. If you are already busy, then the accountant will help you track all the transactions properly and make them easily manageable.

Accounting solutions for dropshipping business:

The dropshipping accountant will handle all the complicated and time-consuming tasks for you. They will not only help you increase the savings but also handle any legal issues quite easily. Here is how they can help you:

  1. Tax issues – There are many tax challenges that may arise when you are exporting products to different countries. The accountant will handle the international taxes properly and successfully help you in paying the right tax without spending an extra penny from your hands.
  2. Manage invoices – This is where the experience in using the cloud-based software to integrate the systems is invaluable. The accountant will customize the accounting system based on your requirement and integrate all the data to generate invoices.
  3. Inventory management – The software used by them will be the perfect tool that has 24/7 real-time access to the inventory. It will let you quickly and easily identify which products are selling quickly and will alert you with any potential cash flow issues before it becomes a headache to you.
  4. Virtual office – While the accountant will love to meet you, but you may operate the business from anywhere in the world. Hence, the virtual office and the use of the best accounting software will enable you to seamlessly look after your finances without any disruption in your business.


Dropshipping has become an extremely popular eCommerce business that deals with multiple customers, suppliers, marketing and couriers. Hence, it can be easier to lose track of the accountancy and tax obligations. The right dropshipping accountant will provide full accountancy services so that you can concentrate more on improving the business and get relaxed from handling other financial issues.

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