There are many practical reasons for online businesses to hire a bookkeeper and accountant for e-commerce. Here are some of them:
Legitimacy
Registering your business and maintaining a bookkeeper and accountant for e-commerce legitimises your company. You are no longer a fly-by-night operation but a certified proprietor who pays taxes.
This improves your standing with customers, especially since you provide receipts and pay the correct taxes back to the government.
Improved Customer Relations
Since clients and suppliers know you are a registered business, this could lead to collaborations and promos that benefit both parties. A legitimate online business means you can register in certain states and territories to run promotions, which require permits or authority to sign off on them. Lack of such documentation could lead to penalties and distrust with your clientele.
Peace of Mind
Your clients can rest easy knowing they are purchasing from or working with a legitimate seller who covers their bases and does not involve customers in shady transactions. They can do business with you without worrying and could even be the start of a beautiful professional relationship.
Solid Business Model
Receipts and invoices of finances, expenses and other transactions give you an idea of how your e-commerce business runs. You will better understand which products sell, which don’t, what are the high-traffic and low-traffic seasons, among other data, to maneuver your company into a position of success.
Information from those documents could also help you manage your budget. For instance, if your electricity consumption for a particular month was higher than usual, you can determine what caused the small spike. If it was due to employees rendering unnecessary overtime, you could encourage them to get all their work done and go home on time instead.
If your e-commerce business is just starting, you may need a substantial loan from financial institutions to keep it afloat until it brings positive profit. Financial records and a legitimate business registration qualify your company to borrow funds. If your financials are all in order, borrowing at lower interest rates could be an offer on the table!
Accurate Forecasting
Data from your transactions can also benefit your forecasting for the next quarter or year. A bookkeeper and accountant for e-commerce can collate your financials to report on capital and operating expenses throughout a given period.
Thus, you can make informed projections and decisions about spending your budget. For instance, if marketing efforts this quarter yielded minimum income compared to the previous quarters, that could necessitate an increase in marketing efforts or a total overhaul of your promotion strategy.
Prompt Tax Filing
Another critical role of a bookkeeper and accountant for e-commerce is the aggregation of your financials for tax filing. Instead of doing it yourself, they collate your income and expenses to compute how much you owe the government and pay the amount promptly.
Thus, you won’t be penalised for late remittances or tax evasion, both of which are punishable by a fine of $33,000, depending on the number of penalty units you have reached. Not only that, but the outstanding taxes, ascribed penalties and compounding interest of missed out payments could bankrupt your business and lead to foreclosure!
Worse still is that you could be punished with two-year imprisonment, or both the fine and incarceration!
Conclusion
Bookkeeping and accounting prove to e-commerce customers how seriously you take your business. You aren’t a scammer or shady seller, but one who adheres to the law and provides valuable products and services they don’t need to worry about.
Need an accountant for your e-commerce business? Reach out to The ECommerce Accountant right now! We keep our clients out of trouble with the Australian Taxation Office (ATO) by preparing all your tax obligations so that you can focus on growing your company!