An e-commerce accountant is an essential component of any e-commerce business. Having an experienced and knowledgeable accountant to provide financial guidance and advice can be invaluable to the success of any business.
Moreover, an e-commerce accountant can help you understand the complexities of taxes, financial regulations, and other financial matters related to running an online business. They can offer sound advice on managing your finances, maximising profits, and minimising risks.
They can also provide financial help in setting up payroll and tracking customer payments. In short, an Ecommerce Accountant is a must-have for any e-commerce business looking to succeed and grow.
Here are ways how an accountant for an e-commerce business can help you:
Keep Up with Tax Laws
E-commerce business owners frequently consider sales taxes and corporate income taxes. As a result, you must take into account both of the following when dealing with sales taxes:
Sales taxes levied by the state (collected in 45 states and the District of Columbia).
Regional sales tax (collected in 38 states).
Refunds By Retailers
Chargebacks occur when a customer informs their bank that a transaction is being contested because they believe it is fraudulent. However, the "friendly fraud" losses suffered by e-tailers range from 40% to 80% due to this sort of fraud.
All chargebacks should fall under the heading "Returns and Allowances." Include the chargeback fee if there was one as a business expenditure if there was.
Use Proper Record Keeping Techniques for Your Online Shop
Keeping correct books of accounts that represent your company's financial status is the practice of accounting (for yourself and anyone else who asks).
You must keep track of each claim because you self-report your income and taxes to the government. So, the following records must be maintained for your e-commerce company's accounting:
Bills, invoices, and receipts.
Voided and returned checks.
Tax forms 1099 and W2.
Bank account statements and credit/debit card statements.
Account statements from digital wallets used for payments.
Revenue information from the software your online business uses.
These documents must be maintained on file for a minimum of three years. Does it appear to be a lot? Paying more for cloud storage might be preferable to be penalised if you can't support your financial claims in an audit.
Pay the Sales Tax In Full
You must maintain meticulous records to prove that you have added sales tax to each client invoice. Your local tax authorities require that you finish all of these records before the deadline. Although there may be variations from state to state, fillings typically occur around the middle or end of each month.
Verify Again the Tax Rates You Bill Consumers Are Accurate
Depending on your e-commerce platform, you may manually enter the applicable sales taxes into the checkout form or allow the system to handle it based on the buyer's delivery address. The second choice is less prone to errors.
Pay Quarterly Company Taxes That Are Estimated
An e-commerce company must make quarterly estimated tax payments if it anticipates owing more than $1,000 in taxes at the end of the year. The IRS determines your obligations, which bases prices on the calendar based on the most recent return.
Separate Reimbursements From Chargebacks
Chargebacks and customer refunds are two distinct expense categories that necessitate separate documentation.
Trade-In Shops
At e-commerce stores, you should be prepared for the potential of one or more return policies:
Store credit: Add the first transaction to the accounts payable area and list it as a cost.
Complete refund: After the product is returned, enter the transaction for the refund under "Returns and Allowances" and subtract it from your revenue.
Conclusion
An e-commerce accountant is a must-have for any business operating online, as they provide a range of financial and accounting services that are critical for the success of an online business.
A qualified e-commerce accountant can provide valuable insights into your business's financial performance, help you identify areas of improvement, and ensure that your financial records are accurate and up to date. They can also help you manage taxes, analyse data, and create financial reports to help you make better decisions for your business.
Ultimately, an e-commerce accountant can help you ensure that your online business runs efficiently and successfully.
The ECommerce Accountant offers the services of one of the best accountants in Melbourne. Contact us to learn about our reliable e-Commerce accountant services!