Handling your own books may be the only option when you first open your online store, but as you grow, you need to free up your time and get help with more complex bookkeeping and accounting issues. So, how do you know it’s time to seek help from an expert? Watch the video linked below or keep reading to learn 5 signs to help you determine when it is time to hire an e-commerce accountant.
Click on the video below to watch: When is it time to hire an e-commerce accountant?
5 signs that it may be time to hire an e-commerce accountant
Whether you’re doing the books yourself or working with a general accountant or bookkeeper, at some point it’s going to hold you back from growing your e-commerce business and taking your profits to the next level. That’s because e-commerce accounting can be very complex for the do-it-yourselfer. It’s also very specialized and new, so most accountants aren’t familiar with the nuances either.
There are a lot of things that add to the complexity of handling the financials for an e-commerce business, including having multiple channels and multiple payment processors. Then you’ve got a whole myriad of apps that will integrate with QuickBooks, some successfully and some not very successfully. So, let’s go over some important things you should know to decide when the time is right to hire an e-commerce accountant.
#1 – Clear view of your profits
First, you’ll find you need a clear view of your profits. Perhaps you’ve been working on your financials just so you can do your taxes. Many new business owners do that for the first couple of years in their business. But as your business grows, your goal should be to get a clear view and understand your gross margins and your profitability.
When you understand gross sales versus fees, deductions, and other things, you can use that data to manage your business and make critical decisions to improve your profitability.
#2 – Track inventory and cost of goods sold
The second sign that you may need to hire an e-commerce accountant, is that you want to track inventory and cost of goods sold, correctly. This ties back again to a clear view of your profitability. When you know what your inventory is and what your cost of goods sold is, you’ll know how profitable you are and you’ll also know how much money is tied up in your inventory.
#3 – App integrations
Next, you may need help with app integrations. Perhaps you’ve connected QuickBooks Online to an app, – maybe an inventory app for example – and it’s bringing in the wrong data. It may be doing a data dump and bringing in all sorts of detailed transactions that you don’t need to track in QuickBooks. Or, maybe you want to streamline some manual processes but you don’t know which app to use or how it would integrate with QuickBooks. This is when you want to hire an e-commerce accountant who understands QuickBooks Online, as well as app integrations, and whether an integration is a good idea.
#4 – Track and manage your sales tax liabilities
Fourth, you find that you need to track and manage your sales tax liabilities. Sales tax is a very complex issue and there are a lot of rules to keep up with. Have you heard of economic nexus? Do you know that you could have exposure to filing sales taxes in other states? There’s a lot to keep up with here, and a good e-commerce accountant can help you navigate these very complex sales tax issues.
#5 – Messy financials that need cleaned up
The fifth sign that it’s time to hire an e-commerce accounting professional is when your financials are a mess and you need them cleaned up. I specialize in helping creative online sellers clean up their books and work on their monthly financials. A few of the areas we help them clean up are sales, cost of goods sold, expenses, inventory, sales tax liabilities, payroll liabilities, and a whole lot more. The goal is for you to find an e-commerce accountant who can help you have meaningful, reliable financials that give you a true picture of how your business is doing.
Closing
After reading through these 5 signs to determine when it is time to hire an e-commerce accountant, you might be saying to yourself, “I think I can figure this out myself. Can’t I just do my own books?” Well, if you were to do your own books – even if you were to do them correctly – would that be the best use of your time? Shouldn’t you be spending your time on activities that will maximize your profits? As a business owner, your goal is to spend your time on the activities that will bring you profits and increase your cash flow and not worry so much about working on the financials.
So where are you on your business journey? Are you still working on your own books? Are you looking to hire an e-commerce accountant? Or perhaps you’re already working with an e-commerce accountant? If you are looking for some tips on DIY e-commerce accounting, click here for a complete list of my e-commerce related blog posts. I also encourage you to join my FaceBook community: 5 Minute Bookkeeping with QuickBooks Online, where you can ask your peers and accounting pro’s your most pressing questions about e-commerce accounting. Finally, click here if you would like to learn more about my e-commerce accounting services, or to book a free discovery call to see if we’d be a good fit for working together.