Why You Need an E-commerce Focused Accountant – A Complete Guide to Accounting for E-commerce Companies

The recent boom in the E-commerce industry has not only made the industry more popular. It has also become much more competitive. With this competition comes some complexities that E-commerce store owners must deal with. 

One such complexity is ensuring excellence in managing the financial aspects of your E-commerce business. You need to follow every rule of bookkeeping and accounting to keep track of your finances and succeed in the long run. 

But how can you do this when many other tasks call your attention? 

This is where a qualified E-commerce accountant becomes necessary to add to your team. There are many benefits of hiring a professional E-commerce accountant, including;

• Saves you time
• Access to the latest accounting and financial knowledge
• Lower tax preparation charges
• Efficiency, etc. 

Unfortunately, many E-commerce owners opt against hiring qualified E-commerce accountants because they consider it too expensive. 

But is losing valuable businesses and money because of your inexperience not more expensive? 

An E-commerce accountant offers more value than you may know, and this guide will highlight all you need to know about hiring one. 

What is E-commerce Accounting?

E-commerce accounting involves performing various accounting tasks for E-commerce businesses. These tasks range from gathering, evaluating, organising, and reporting all financial data related to an E-commerce business. 

E-commerce accounting features many methods that E-commerce companies can use to understand the financial performance of their business. 

The primary purpose of this accounting function is to provide detailed information about all financial activities happening in  the business’s daily operations. This account’s information and financial data can help managers and employees make daily decisions that’ll impact the business. 

Although E-commerce accounting is complex, it is essential and shouldn’t be overlooked. Instead, you should consider hiring an expert who can handle every aspect. 

5 Reasons Why You Need an E-commerce Accountant For Your Business

They Help To Reduce Financial Errors

Online businesses are generally prone to financial errors because of the complex nature of combining different aspects of the business. Unfortunately, these mistakes can negatively impact your operations, irrespective of how minor they are. 

They can even go as far as causing irreparable damage to your business fortune. Thus, the need to find these errors and stop them on time. Yet, how can you handle them when you don’t have the accounting expertise? 

This is where a trained E-commerce accountant shines. Professional accountants spend many years in training, learning to detect and stop even the most insignificant financial errors. 

They understand internal and external financial operations and can troubleshoot possible errors to know where they originated. Accountants can also offer advice and recommendations to stop the recurrence of small and major errors. 

They Can Help Increase the chances of Your Business getting funding 

One common reason for the failure of many online businesses to raise funding is the lack of adequate testing of funding and forecasts. You need a trained accountant to handle financial forecasts and operations from the start. 

While drawing up your business plan, an accountant helps provide the solid foundation you need. You can rely on your accountant to offer you more objective, evidence-based opinions. 

They also have the right skills to provide constructive input in critical areas. Besides, investors can trust you more when they realise a professional Ecommerce accountant has signed off on your business plan. 

They Can Save You Money and Help Improve Cash Flow 

Let’s face facts – nothing improves cash flow better than the right control over your costs. Accountants offer more than just control. They also understand the necessary accounting functions needed to keep your business afloat. 

Cash flow is the life of every business – especially small enterprises and startups struggling to survive the challenging initial years of a business. As a result, forward-thinking businesses must forecast the future and take necessary actions to ensure business survival in the short- and long run. 

Professional accountants will create and implement excellent cash management policies while ensuring reasonable credit control. As part of their jobs, accountants will plan how your business manages its operations, financial activities, and financial investments to maintain a positive cash flow.

They Provide Advice on Inventory Management 

Most E-commerce businesses struggle with inventory management. The struggle is even more intense if you sell on multiple Ecommerce platforms. 

It leaves so much mess with little time to tidy everything up. The best E-commerce accountants are trained for moments like this. They can help provide critical  advice and recommendations for the smooth management of your inventory. 

Some of the duties of an accountant in this function include:

• Creation of efficient systems for tracking inventory and sales. 
• Effective inventory control and prioritising of inventory needs
• Product information tracking 
• Recommendation of inventory technologies that integrate well 

The last thing any E-commerce store owner wants is to run out of stock when orders become too large. 

An efficient E-commerce accountant will always get ahead by using the right inventory management tool for your business and integrating it with your existing accounting software. Thus, allowing you to manage your inventory in the face of currency differences, multiplatform fees, and sales tax. 

They Handle All Cash Flow Issues While Working to Improve Your Business Efficiency

Irrespective of the size of your E-commerce store, you want to ensure you always have enough cash flow to run your operations. 

The impacts of cash shortages will always be detrimental to your business, and that’s why you must factor in cash flow during planning to improve efficiency and avoid potential problems. 

But since you’re often too busy with many things, it’s easy to overlook the tiny details that matter! 

An E-commerce accountant can help prepare cash flow reports while you focus on other aspects of your business. Their reports will help you see how your daily expenditure is trending. 

It’ll also help you know how much cash is coming into your business daily. You can always use these figures to determine whether to focus more on reducing expenses or increasing revenues. 

Final Thoughts

While most accountants will understand the issues discussed above, there’s a significant difference between an accountant trained for E-commerce and one who has never seen an Amazon earnings report. 

Hiring an accountant that lacks experience in E-commerce can cost you a lot. On the other hand, an experienced E-commerce accountant can handle many tasks to keep your business afloat. Some of these tasks include;

• Spotting problems before they develop and offering suggestions to stop them
• Helping you make financial plans to keep your business going now and in the future 
• Financial statement analysis, etc. 

It is important to hire a qualified E-commerce accountant on time before it becomes too late and you lose out on meaningful business opportunities.