Top 8 Things That An eCommerce Accountant Can Do For You

The eCommerce industry is highly competitive and complex. While there has been an extreme boom in the industry, it has only left eCommerce business owners distraught. They have to manage every aspect of their business with excellence, especially eCommerce accounting. It is hard to manage the accounting aspect when you have many other tasks to complete. Following the rules of bookkeeping and accounting for your business is crucial for keeping track of your finances. Hiring an accountant for your business is not always a top priority. However, there are many benefits, whether it is to ensure your accounting paperwork is correct or help expand your eCommerce business. An eCommerce accountant can be an invaluable resource to you, as they specialize in handling the accounting and finances of a company. They can offer everything from bookkeeping services to complete financial management and control.

The problem is that many business owners consider hiring an eCommerce accountant too expensive. However, hiring an eCommerce accountant is not just about cost but also about the value it offers and its role in the growth of your business. To understand the benefit of hiring an eCommerce accountant, you must first understand eCommerce accounting and how it differs from traditional accounting.

What is eCommerce Accounting?

eCommerce accounting is an accounting concept that helps eCommerce companies track their business transactions accurately. This type of accounting has many methods that the eCommerce company uses to understand its business performance better. The primary purpose of eCommerce accounting is to provide information about the activities that happen in the eCommerce business’s daily operations. It provides the financial data and other necessary information that managers and employees need to do their jobs better.

There are many complexities associated with accounting for an eCommerce business. Since the costs of goods sold, inventory, and merchandise purchase are all variables, it is not easy to forecast what you will owe at the end of the year. This can lead to many challenges in creating accurate financials that comply with GAAP. Without accurate reports, it can be challenging to gain visibility of your company’s financial performance. Not just this, most successful eCommerce businesses are operating their business on multiple eCommerce platforms and shipping to different countries. This makes the taxation and management of inventory more complex.

8 Things that An eCommerce Accountant Can Do for You

It is hard to believe that you need to consider so many complicated financial aspects of an eCommerce business. Running a successful online store is more than just picking the right product mix and getting the lowest possible prices – you also have to deal with taxes, payroll, worker’s compensation insurance, cash flow, credit card processing fees, and more. We will introduce how an eCommerce accountant can simplify your life as an eCommerce business owner.

1. Help with Product Costing
   Product costing is a complex task for an eCommerce business as the pricing is not simply based on the cost of goods sold or historical costing. There are multiple factors to consider, like competitors’ pricing, eCommerce platform fees, discounts, etc. An eCommerce accountant can help you calculate the cost of goods sold, the average cost per unit, and net product costs after considering every aspect that could impact the bottom line while staying competitive in the market. An eCommerce accountant has the knowledge and expertise needed to figure out the best way to set your product up to meet all requirements. This could include pricing, shipping, insurance, and anything else that might affect its cost.
2. Providing Advice on Inventory Management
   Inventory management for an eCommerce business is a big hassle, and if you are selling on multiple eCommerce platforms, it will only add up to the mess. An eCommerce accountant can help you create a system for tracking inventory and sales, making it easier to know when new stock needs to be ordered. This type of information is critical for maintaining an accurate inventory count. Otherwise, there is always the risk of running out of stock if your orders are unforeseeable or too large. An efficient eCommerce accountant can advise you to adopt the right inventory management tool integrated with accounting software, enabling you to manage your inventory without struggling with different platform fees, currency differences, or sales taxes.
3. Providing Assistance in Projecting Sales Volume
   A knowledgeable eCommerce accountant can help you estimate sales volume by looking at historical data and anticipating future sales, further helping you understand the risks of your products. They will consider cost, competition, and customer service to assess the risk. If there is a high risk, they can help you find ways to reduce it. An accountant with some eCommerce experience can help you develop a plan to increase your sales. They’ll also be able to provide strategies for improving your profits, managing inventory, and staying on top of taxes.
4. Handling Cash-Flow Issues and Improving Your Business’ Efficiency
   Businesses need to ensure that they have enough cash flow to run their operations. You might find it hard to pay your employees and keep necessary supplies stocked if you are short on cash. For your business to be successful, it’s essential that you understand cash flow to improve efficiency and avoid potential problems. An eCommerce accountant can prepare cash flow reports to help you manage your business. These reports will help you see how much money you’re making and spending. You can then use this information to determine if you should be focusing more on increasing revenue or lowering expenses. Additionally, cash flow reports are used to estimate the amount of tax that should be paid.Useful Read:

   Healthy Cash Balance Which A Business Should Maintain

5. Helping with Tax Preparation
   An eCommerce accountant can help with taxes by calculating the tax implications of purchases. They will also be able to identify any deductible tax helping you to reduce your tax implications. Being an eCommerce accounting specialist, they can help you with deductibles specific to eCommerce businesses.
6. Ensure HMRC Compliance
   HMRC compliance is imperative to ensure you don’t pay more tax than necessary. Tax law can be tricky, and there are many rules that a non-accountant may not know about. HMRC will investigate any business for non-compliance, giving you more considerable fines if they find anything wrong. It is vital to have an accountant who makes sure HMRC compliance is always up to date to avoid this.
7. Save your money
   Accountants can provide insight into what is happening with your company. An accountant’s goal is to help you get back as much as you can of what you put in. This is achieved by reviewing your expenses, income, and taxes so that they are all accounted for. They will adjust your tax return, which may decrease the amount of taxes you need to pay each year. And most importantly, they will ensure your accounting process is seamless and accurate, helping you save money on penalties and fine
8. Save you time
   One of the main tasks that an eCommerce accountant can do for you is to save you time. They will work behind the scenes to ensure all your accounting needs are met. By having this support, you will be able to spend more time doing what you enjoy and less time crunching numbers.

To conclude, keep in mind that there are many tasks that an eCommerce accountant can do for you and your business. An experienced e-commerce accountant can often spot problems before developing and make suggestions on how to fix them. The important thing is to hire one early on to avoid the need for a heavy workload when it becomes too late.

One more thing you can do while hiring an eCommerce accountant is outsourcing instead of hiring in-house personnel. Outsourcing your eCommerce accounting can be one of the best decisions you make for your business. Whiz Consulting has seasoned eCommerce accountants who can help you deal with your bookkeeping and accounting for your eCommerce business. Outsource today so that you can focus on your core business activity while our experts take care of the accounting process. If you plan to hire an eCommerce accountant or want to know more, speak to us.