Ecommerce Bookkeeping Services: Streamline Your Online Business Finances

You have a successful ecommerce business, but you're having trouble keeping up with all the specific bookkeeping requirements? Then, you should get the help of a professional ecommerce tax accountant!

Professional ecommerce bookkeeping services can help you keep track of your online business finances while also focusing on different aspects of your job. Moreover, they're crucial not only for managing your business but also for making it grow. That's why they're the number one choice of most business owners, with only 41% managing their books on their own.

Understanding Ecommerce Bookkeeping

Ecommerce bookkeeping is the process of managing and recording the financial transactions of an ecommerce business. It involves aspects such as sales recording, expense tracking, and financial reporting, and it plays a pivotal role in ensuring ecommerce businesses are keeping up with financial regulations.

Accurate e commerce bookkeeping is important because—just like traditional businesses—ecommerce businesses need to manage their finances effectively to comply with legal and regulatory requirements. In addition, it can seriously impact a business's development and scalability by, for example, influencing the interest of investors.

On the other hand, bookkeeping for ecommerce business has some unique aspects to it. E-commerce businesses typically offer a higher number of alternative payment methods, deal with digital sales channels and shipping costs, involve privacy and data laws, and often need to comply with the legal requirements of more than one country. Finally, they also tend to deal with a higher volume of sales; according to Forbes, 24% of all retail purchases are expected to happen online by 2026.

Benefits of Professional Ecommerce Bookkeeping Services

These are some of the immediate benefits of hiring e-commerce bookkeeping services:

  • Enhanced financial decision-making: You won't make good business decisions unless you have all of the facts; an ecommerce bookkeeper can guide your decision-making by informing you of what's going on with your business's finances.
  • Time and cost savings: By delegating the bookkeeping work to a professional e commerce tax accountant, you free yourself (and your team) to focus on what's truly important.
  • Compliance and tax preparation: Navigating the law can be complicated, but professional bookkeeping services make it a whole lot easier to comply with all legal and fiscal requirements.
  • Scalability: Proper bookkeeping helps attract investors, secure extra funding, and save money—all crucial aspects of ecommerce businesses looking to grow their operations.

Key Ecommerce Bookkeeping Practices for Your Business

There's no question that e-commerce bookkeeping matters, but what does it entail? These are some of its key practices:

  • Daily sales and expense tracking: The process of recording and monitoring all expenditures incurred by an e-commerce business as part of its operations.
  • Inventory management and COGS calculation: Inventory management is about overseeing the flow of goods into and out of a business, whereas COGS (Cost of Goods Sold) represents the direct costs associated with producing/purchasing the goods that a company sells during a specific period.
  • Handling returns and chargebacks: Involves the management of customer refunds, product returns, and chargebacks, which happen when a customer disputes a credit card transaction and requests a refund directly from their credit card issuer.
  • Accurate record-keeping: The "bread and butter" of ecommerce accounting services—making sure that all the books are precise and up-to-date.
  • Financial statements: Proper financial statements can guide e-commerce businesses in forecasting, performance evaluation, and fiscal transparency.

How to Choose the Right Ecommerce Bookkeeper

There are up to 24 million online stores out there, so there's a big market for ecommerce bookkeeping. E-commerce accounting services can take your business to the next level, but are they all the same? Selecting the right ecommerce bookkeeper isn't as simple as searching "Ecommerce accountants near me" on Google and settling for the first option; it takes some careful consideration, and it involves three key steps:

  1. Checking the bookkeeper's reputation: The right ecommerce bookkeeper should have a good reputation, positive reviews from past clients, and solid business foundations;
  2. Evaluating the bookkeeper's services: Not all bookkeepers offer the same number and type of services; make sure yours suits your business characteristics before making a long-term commitment;
  3. Communicating with the bookkeeper: The right bookkeeper should "speak your language," answering any questions that may arise as clearly and promptly as possible.

If you have any doubts regarding your bookkeeper's reputation, services, or level of communication, you should look for an alternative.

Advanced Ecommerce Accounting Strategies

Different ecommerce accounting services rely on different advanced strategies. This simply means that, sometimes, bookkeeping providers can offer advantages that go past the realm of "standard" bookkeeping.

Utilizing technology for automation and integration is a fine example of that, and an advanced accounting strategy that's becoming increasingly popular in the age of information. The goal is to remove human participation from the equation by leveraging technology in repetitive tasks. And it sure works, as 83% of accountants believe technology adoption is key to gain a competitive edge in the market.

Other advanced accounting strategies are advanced reporting for business insights and strategic tax planning and advisory. These aim not only to improve an ecommerce business's bookkeeping, but also to provide fact-based data, predictions, and solutions that can positively impact its future.

Common Ecommerce Bookkeeping Challenges and Solutions

Navigating ecommerce bookkeeping is easier with the help of a professional ecommerce tax accountant. Nevertheless, it's common for some challenges to arise. Here's how such challenges can be dealt with:

Managing Multichannel Sales Data

Challenge: Since ecommerce businesses sell their products on different platforms, it can be complicated to manage data coming from so many disparate sources.

Solution: Combine all sales data into a uniform platform that can sync data from multiple sources into a centralized system.

Dealing with International Currencies and Taxes

Challenge: Ecommerce businesses cater to an international audience, so they sometimes have to deal with an overwhelming number of different currencies and regulations.

Solution: Getting the help of professional ecommerce bookkeepers to make the most of multi-currency transactions while also ensuring compliance with international tax laws.

Streamlining the Bookkeeping Process

Challenge: For a layman, organizing bookkeeping processes can be daunting, let alone creating the necessary structures to make it work as swiftly as possible.

Solution: Implementing standard professional bookkeeping workflows while also investing in bookkeeping automation.

Software Solutions

Challenge: Deciding on the right accounting software or ecommerce platform.

Solution: Compare different software solutions and seek recommendations from experts in the field such as a certified ecommerce bookkeeper.

Outsourcing vs. In-House Bookkeeping

Challenge: Deciding whether you should hire ecommerce bookkeeping services externally or delegate bookkeeping tasks to someone in your team.

Solution: Carefully evaluate your ecommerce bookkeeping needs to decide on the best course of action. If your ecommerce business is making under 100 sales a month, then you can probably keep things in-house; if it deals with a sufficient volume of international sales, then professional ecommerce bookkeeping services are something you should definitely consider!

FAQs: Ecommerce Bookkeeping Insights

What makes ecommerce bookkeeping unique?

In comparison to traditional bookkeeping, ecommerce bookkeeping is unique due to its level of complexity. It involves a high volume of transactions and international operations because sales are normally international, and it also requires a decent digital structure to operate, including everything from a digital marketing strategy to safety procedures for online payments.

How can ecommerce bookkeeping services benefit my business?

Ecommerce bookkeeping services benefit your business by informing decision-making, helping to save time and costs, ensuring legal and tax compliance, and improving scalability.

What should I look for in an ecommerce bookkeeper?

You should look for an ecommerce bookkeeper with a good reputation in the industry, an appropriate number of services that are fitting for your company, and a decent ability to communicate with you and/or your team.