Chartered Accountants

Significance of an Accountant for Online Businesses

Online businesses are not just an option anymore; being present on the web is a necessity for any business in this era. When it comes to running an online business, the pros easily outweigh the cons, yet it is not entirely challenge-free. For instance, the business owner has to stay abreast of accounting and bookkeeping details of the business all the time.

Common accounting challenges for online businesses

Challenges that arise with the absence of online identity verification, competitor analysis, shopping cart, customar loyalty, returns and refunds, shipping, or simply data security – tackling these obstacles may look simple, yet these things can make or break your online business. Therefore, it is essential to have some professional knowledge regarding all the digital marketing and sales before investing in an online store. Things can easily go downhill, and if you don’t know the whole picture, finances can get out of hand. The good news for all of us is that there are accountants who are willing to offer their guidance and professional help to make our journey towards a successful online business easier!

Breaking down reports

Reports play an essential role in learning about the gains and losses of any business; they also help in assessing the overall standing of the business. If you don’t know the statistics, you are soon going to be hit from out of nowhere! With online stores such as eBay and Amazon penetrating the online market, the competition is indeed very tough. Business owners need technical know-how, as all these progressive stores use very high-tech and versatile methods for report generation. If you use different methods and platforms, there is always a possibility that things might end up messier and trickier to manage. It is here that accountants come in most handy since they are well versed in interpreting reports and can take a big burden off your shoulder. Paul West, Director of Strategy, Training & Acquisitions at AVASK Accounting emphasized this need in these words:

“It’s vital that ecommerce businesses understand the options available for reporting provided by the various selling platforms to obtain correct information. For example, there are so many different Amazon reports. An accountant specialising in ecommerce can make sure that you’re using the right one”.

He also further clarified:

“Financial reporting allows you to view the areas of your business that are profitable and make relevant business decisions. eCommerce is fast-moving and requires sellers to quickly adapt to remain profitable. Entrepreneurs require transparency and easy access to their accounts so they can make quick business decisions”.

Juggling tax regulations and legislative changes

One advantage of being an eCommerce seller is having the opportunity and luxury to store stock and items, and then send them wherever they are needed. This means online sellers can keep things economical, make faster deliveries, and have an overall improved supplier relationship. However, things are not as black and white as they seem from a distance. There are hidden taxes on where you choose to store your goods, especially if you are selling in multiple countries it is a must to stay vigilant. On top of that, European governments are carrying out and applying swift legislative changes to e-commerce rules and regulations. A massive change can be observed as governments are becoming more aware that they should implement firm checks and controls on ecommerce sellers to guarantee tax payment.

Currency conundrums

One significant and beneficial outcome of e-commerce is the opportunity to sell all over the world. This also means that foreign income is coming in many forms. Although losses in currency exchange may seem minor and insignificant initially, they can quickly add up to make a handsome amount. Professional accountants can help business owners as they can use their knowledge and propose ways to bring such losses to a minimum. A currency account can come in handy for any online seller who is expecting payments in various currencies.

Take an accountant on board

Growing your business and building it up to the level of an established e-commerce platform is a great opportunity. However, a smart business mind will always understand the situation clearly and see the bigger picture. Keeping in mind the swift rise of technology usage in all spheres of life, we can easily see online businesses becoming the norm of the near future. Also, the fact that these technologies are becoming increasingly user friendly with every passing day, it is clear that people who invest in any business that offers online sales are going to be in a better situation. However, it also means that the competition amongst the companies who are making online sales will increase much more. The other side of the coin should also be taken into consideration that how a business is going to sustain in the wake of increasing competition.

Accounting for online businesses

Thus, for online businesses, it is crucial to have someone professional with excellent knowledge to manage your sales. Such an addition to your team will provide a safety net for your online business. Smart accountants of today opt Xero for a complete package. Xero integration with e-commerce websites such as Shopify and Woo-commerce are a testament of its success in this domain. In addition, Xero can also be conveniently integrated with Inventory Management Systems such as Unleashed, Dear and Cin7. So no matter what platform you use for conducting your online business, a XERO certified professional can take care of all your accounting needs. To summarize, whether your online business is flourishing already or you are still at the starting step, it is essential to have an accountant who works with you side by side. Such an individual must have full knowledge about the technicalities of online selling and cross-border tax implications.

Hire a virtual accountant

The best part of the scenario is that you don’t need to hire a full-time accountant in your office.  To save expense, you can hire a virtual accountant who can help you avoid investment mistakes and provide valuable information in financial matters. An accountant will also help in the management of your time, from ensuring that inventory levels are reconciled to recording all cash received for orders. Such a financial advisor will keep money matters in check, and make regular audits of all the sales. If you are unaware of any professional accountant, contact Alpha Pro Partners to find a reliable accountant professional with vast experience in all kinds of online businesses.