An ecommerce accountant can help your business in many ways, from handling the financials to ensuring that your tax situation is in order.
You might be thinking that you are doing pretty well on your own. Sure, the business is growing and cash flow isn’t an issue.
However, where there’s cash flow, there’s also paperwork – lots of it.
Think of all the things that need to be taken care of on a daily basis. You have to handle customer invoices, payments, supplier invoices and payments, as well as ensuring that your books are in order.
It’s a lot to keep track of and it can be tough to do everything on your own. That’s where an ecommerce accountant comes in.
Why Use an experienced Ecommerce accountant
While there’s nothing wrong with generalists, ecommerce is a completely different beast.
In the beginning, most ecommerce store owners may manage their own accounts.
It’s typically the most cost-effective option, and it’s a wonderful method to keep track of your business.
When your firm expands into foreign markets, or establishes new ones where different regulatory standards apply, the need for working with an ecommerce accountant grows.
Several factors will influence when you decide to bring in an accountant. Generally, the biggest concern is whether you’re making enough to warrant investing in help.
Free 30-Min Strategy Session
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.
But why dealing with these types of accountants is different?
1. They know the ins and outs of ecommerce taxes
Unless you’re a taxes enthusiast, you probably aren’t up to speed on the most recent tax rules. Tax laws can work in your benefit or against you depending on your circumstances.
An ecommerce accountant knows all about the tax laws that apply to online businesses – and they can help you make sure you’re complying with them and assist you in planning throughout the year so that you take full advantage of your deductions.
As your business starts to take off, the paperwork will start piling up. You have invoices from suppliers and customers, statements from banks and credit card agencies – not to mention tax forms.
An ecommerce accountant can be a huge help here because you can leave all the paperwork to them and focus on running your business.
2. Save you from costly mistakes
In addition to doing your taxes correctly, an ecommerce accountant can help you avoid common financial mistakes that small businesses often make.
This includes things like improperly writing off expenses or not taking advantage of savings opportunities.
It is important to make sure your books accurately reflect your business’s financial situation.
3. Financial planning
The goal of financial planning is to figure out how a business will pay for its strategic objectives and goals.
Good financial planning is essential for any business, but it’s especially important for ecommerce businesses.
An ecommerce accountant can help you develop a budget and track your expenses so that you’re always aware of how much money you’re making.
He’ll be able to assist you with tracking your expenses and revenue, as well as planning for future development.
They can also help you set up systems to make bookkeeping easier on a day-to-day basis.
4. Cash flow
Many small business owners that are starting up their own online stores do not realize the importance of managing their cash flow effectively.
This can lead to losing money unnecessarily or even facing bankruptcy if growth is too rapid and there’s not enough capital to sustain the business after expansion.
Cash flow is one of the most important issues for an ecommerce business.
After all, if you don’t have enough money to pay the bills, everything grinds to a halt.
An ecommerce accountant can help ensure that you’re keeping track of your incoming revenue and your outgoing expenses.
They can also help you develop a cash flow projection so you can see how your business is doing in the short and long term.
5. Financial reporting
Financial reporting is the process of communicating financial information about a business to its owners.
An ecommerce accountant can help you develop accurate and timely reports so that you always have a clear picture of your business’s financial health.
These reports can include things like balance sheets, income statements, cash flow reports and budget projections.
One of the main duties of an ecommerce accountant is to keep track of your business’s financial records.
This involves recording all income and expenses, as well as preparing invoices and tracking payments.
An ecommerce accountant can help you set up a system for bookkeeping that makes the process as easy as possible.
6. Maximize your profits
The goal of accounting for an ecommerce business is to get the most value out of it while paying as little in taxes as possible.
An ecommerce accountant can make sure you are minimizing expenses where possible but also making smart decisions about what you should and should not be investing in.
They can help you make the most of your profits so that you’re able to grow your business at a healthy rate.
Bringing on an ecommerce accountant is a big decision, but it’s one that can pay off big time for your business. When you’re ready to take your business to the next level.
7. They can act as a Virtual CFO
If you’re not ready to hire a full-time accountant, an ecommerce accountant can often fill in as a virtual CFO.
This means that he or she will be responsible for providing financial advice and assistance to your business on a regular basis.
This is an excellent choice for small and medium-sized businesses that are just getting started or want to take their business to the next level.
8. Apply for loans
An ecommerce accountant who understands the mathematics of loan applications can put together a proposal that makes it easy for financiers to see where their money is going and why your company needs it.
They can explain your business’s projected cash flow and provide other information that makes it clear to lenders why they should get involved.
A good ecommerce accountant can make the process of getting a loan much easier and can help you secure the funding you need to take your business to the next level.
9. Trustworthy sources of support
According to the American Institute of CPAs, accountants are the most trusted advisor for many businesses, more than family, friends, attorneys or financial planners.
Furthermore, over 80 percent of respondents said that their accountant knows their business well or extremely well.
Ecommerce accountants are so crucial since they have an unbiased perspective. They don’t have the same prejudice as friends or family, and they aren’t linked to your firm the way employees are.
They have a stronger incentive to see your company thrive since they are invested in its success.
So, now we’ll talk about how to pick your accountant and find the right fit.
Should you hire Specialists or Generalists?
Should you seek out an accountant that specializes in your field, or can any accountant help you with anything?
Accounting practices are generally similar across sectors, so any competent accountant can provide you with a lot of assistance in your company.
However, a specialist can provide further information. This is especially true if you operate in an field that is complicated or changing rapidly (like ecommerce).
For example, lawyers are subject to different rules than other professional services, so an accountant who focuses on legal matters would be perfect.
If your company sells goods or services over the internet, a specialist will be able to assist you understand the intricate sales tax issues and suggest applications and tools to help you run it more efficiently.
Consider it like a doctor’s visit. Your family doctor will most likely be able to assist you with the majority of your requirements, but when you need surgery or want an expert opinion on a medical problem, you’ll want to see a specialist.
There are some key questions to ask your ecommerce accountant before starting:
Do you have experience with businesses like mine?
Whether you’re seeking for an expert in the field or someone who has considerable experience with a company that’s comparable in size to yours, this question may help you evaluate how well your accountant understands their stuff.
Free cash flow is one such example. As an industry-leading firm providing ecommerce accounting services, we know what it takes to succeed in today’s competitive marketplaces. We are solely focused on ecommerce accounting and have assisted many online retailers to achieve their goals.
What services do you offer?
It’s easy to keep track of everything when you have this many options. I’ve already mentioned bookkeeping and accounting services. Someone may also be required to give tax preparation and planning, advisory, or payroll services.
Not all accountants provide all of these services, so double-check that they can do them all before hiring them.
Can I reach you with questions when they come up?
How do you connect with your clients? And how often? There’s nothing more inconvenient (for both sides) than mismatched expectations of communication and assistance.
If you need to contact your accountant frequently, but they expect only to speak at scheduled monthly meetings, you won’t get the kind of help you require. Make sure you’re on the same page.
How can they help me run my business better?
Accountants and bookkeepers aren’t limited to simply entering numbers into boxes. This is your opportunity to discover how proactive your accountant is, as well as whether they’re ready and able to work with you for the benefit of your business.
If you’ve been struggling to manage the finances for your ecommerce business, it may be time to hire an experienced accountant.
They know how taxes work in this space and can save you from costly mistakes that could cost you more than just money.
An Ecommerce accountant is also a great partner when it comes to financial planning, cash flow management, or reporting obligations. Plus they act as a trusted advisor who will help maximize your profits so you can reach even higher goals faster!
Book a free call with one of our experts today if any of these sound like challenges affecting your company- we want to chat about what we can do together.