Updated: Dec 12, 2019
Accounting is one of the essential elements in any given business, including your e-commerce business. It matters more than you would think and is the key to successful online selling, especially when you consider how accurate financial data is crucial to decision-making. This includes having a clear overview of transactions as more than 50% of e-commerce sales consist of third party customers, which may pose some risks and trading issues when it comes to tax preparations.
Many online sellers don’t consider the need for an accountant until the time comes to pay taxes. Of course, occasional sellers who want to sell their old phones or tablets won’t need an accountant to keep their cash flow in check. However, a growing business will soon need guidance from a professional as settling statements becomes harder to manage the more extensive your business grows.
What do E-Commerce Accountants Do?
An accountant or certified accountant (CPA) is responsible for looking after the financial health of a business, along with preparing for tax returns and ensuring your business complies with tax laws. This includes looking at trends, discrepancies, gathering end-of-year financial statements, as well as going over deductions and credits. To that end, here are more reasons why your e-commerce business needs an accountant:
1. Track Your Fulfilment by Amazon (FBA) Fees
FDA is a program that is highly beneficial for smaller businesses as it allows you to store your products in Amazon’s fulfilment centres prior to delivery. The tricky part about this, however, is that FBA requires you to register and submit tax returns on top of tax filings.
2. Cash Flow and Income Tracking
Selling physical goods means your business has a higher marginal cost, which makes income tracking crucial than ever to stay on top of your company’s cash flow. If you don’t want to lose track of the numbers, outsourcing an accountant that specialises in the field of e-commerce business should fit the bill seamlessly.
The accountant’s responsibility involves regularly reconciling books on a weekly or monthly basis to ensure that all the cash flow - meaning the money spent and received, accurately matches the account’s records. This enables accountants to create an analysis and report on the status of your financial health, which should help guide business owners to make well-informed decisions in the future.
4. Inventory and Expenses Tracking
E-commerce accountants can ease the load off your plate by tracking and managing your online shop’s inventory. This includes organising operating costs and the total amount of goods sold. Transactions made with other sellers or businesses are also on the record, no matter how large or small it is, to ensure accurate, correct, and complete management of financial data.
3. Help with Tax Preparations
Taxation is a crucial requirement of any business, and one small mistake can lead to costly problems for your company. In that regard, bookkeepers help you stay up to speed with your monthly bills and keep essential records, receipts, and documents that you may need for your tax statements.
Beyond making timely tax preparations, they will also help you with finances that you may not understand, such as working knowledge of accounts payable and receivable.
If you’re looking for an ecommerce accountant in Australia, get in touch with us today for a free consultation!