Finding an accountant who actually understands the ins and outs of the e-commerce industry can be difficult. How can you figure out who to trust? What knowledge should they have? We completely understand the struggles which is why we’ve put together this article to help you. Let’s go through how to do your due diligence when hiring an accountant.
Often, business owners underestimate the impact an accountant can have. The right accountant can provide unique insights into improving your business. In the world of e-commerce, it can be helpful to have an accountant who specialises in Shopify or your specific sales channel. These accountants better understand the financial and technological ecosystem of your business.
- Do you need a bookkeeper as well as an accountant?
- What qualifications does the accountant have?
- Does the accountant specialise in your e-commerce platform?
- Are they using cloud accounting and other cloud software?
- Does the accountant understand international tax obligations?
- Can the accountant advise you on inventory management?
- What should the accountant be doing once they’re hired?
- Key takeaways on accountants specialising in e-commerce
Do you need a bookkeeper as well as an accountant?
Whether or not you need a bookkeeper or accountant, or both, usually depends on what stage your business is in. First of all, a quick rundown on the difference between a bookkeeper and an accountant: A bookkeeper records and organises your finances whereas an accountant will analyse these records and give financial advice.
If you’re in the early stages of your e-commerce business, maybe it’s still a side hustle or you’re still working by yourself, you can generally manage your own bookkeeping by using a couple tools. However, it will be useful to have an accountant that helps with tax returns. At this stage, an accountant specialising in e-commerce isn’t necessary but is beneficial for business growth.
Once you’re dedicating all your time to your business, maybe you even have employees under your wing, having an accountant becomes significantly more impactful. Working with an accounting firm who specialises in e-commerce will help you level up your processes. Accountants in this space can guide you through how to make bookkeeping easier as well.
Finally, for established e-commerce businesses with multiple sales channels or massive sales volumes, an accountant becomes pretty much necessary. They can help to drill down on what’s performing well and what’s not. At this stage, entirely outsourcing your bookkeeping makes sense as well. This gives you more time to focus on your core business.
What qualifications does the e-commerce accountant have?
One of the first things business owners should look out for, regardless of the industry you’re in, is whether or not the accounting professional or accounting firm you’re hiring has the right experience and qualifications. First and foremost, are they certified? For example, a Certified Public Accountant (CPA) or Chartered Accountant (CA) are two recognisable qualifications.
Next, since we’re looking for a specific type of accountant, check their portfolio of clients and see if there are similar businesses. Have they positioned themselves as experts in e-commerce? Of course, a lot of this will be marketing fluff which is why it’s important to validate their expertise by going through this list of questions.
Does the accountant specialise in your e-commerce platform?
Each e-commerce platform and sales channel has its own unique challenges. It’s absolutely crucial that your accountant understands how these all work. If you’re using multiple sales channels, your accountant needs to be able to manage numbers from different sources that may work differently. Ask them about their experience. They shouldn’t be learning as they go.
Are they using cloud accounting and other cloud software?
You’re running an online business and need an accountant who understands the online space just as well as you do, if not more. As expected, one of the most important online tools an accountant should be an expert in is cloud-based accounting software. Benefits include; access your books from anywhere, get real-time information anytime, build a cloud-based ecosystem.
When we say a cloud-based ecosystem, we’re talking about building a stack of apps (known as an app stack or tech stack) that are all based in the cloud and can communicate with each other. For example, your accountant should understand how to effectively integrate your sales channels with your accounting software.
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Looking for an accountant with an expertise in the apps you use? Browse our directory of accountants who specialise in specific apps. You can sort by different e-commerce platforms and sales channels, accounting solutions and more. See if there’s one in your location or one who works remotely.
Does the accountant understand international tax obligations?
One area that not all accountants will be able to understand is international sales taxes. The different obligations for sales taxes around the world can get extremely complicated for e-commerce businesses. Be ready to ask potential accountants about their experience managing international taxes for e-commerce businesses.
Can the accountant advise you on inventory management?
Inventory management and tracking isn’t the first thing we think of when we think of an e-commerce accountant. However, inventory is a massive part of your books. Your accountant should be able to fully understand how inventory management software works and how it integrates with accounting software.
What should the accountant be doing once they’re hired?
The process isn’t entirely done after you’ve chosen your accountant. After working with them for a while, you’ll want to double check that they’re meeting all your standards. If there are issues, you can discuss them with your accountant or even choose to start looking for someone who might better fit your needs. Questions to ask yourself:
- Is my accountant maintaining my books on a daily or at least weekly basis?
- Can I access real-time information on my inventory and finances?
- Can my accountant tell me which sales channels, categories and products are performing the best?
- Can my accountant advise on inventory solutions, invoicing solutions etc.?
- Does my accountant understand all relevant processes happening in my business?
Key takeaways on accountants specialising in e-commerce
The number of accountants specialising in e-commerce has been increasing rapidly as e-commerce itself has grown. With many of these accountants and firms being able to do your accounting remotely, you have more choice than ever. Make sure to take your time comparing services offered, expertise and relative price.
If you’re interested in the e-commerce accounting industry, we recently interviewed Illumin8 and Ecommerce Accountants. They share how they’ve built their expertise over the years and how to figure out which firms just have great marketing as opposed to the firms that actually offer great services.
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