Virtual Accounting Services for E-commerce & Online Retailers

Accurate and timely e-commerce bookkeeping is crucial for e-commerce businesses, as it fosters compliance and supports efficient operations. Improper bookkeeping practices can be detrimental. For example, inventory purchases are not fully deductible at once; they are deducted gradually as items are sold and recognized as "cost of goods sold." Without proper tracking of inventory costs, the IRS may disallow your deductions, potentially increasing your tax liability.

E-commerce accounting services and e-commerce bookkeeping services help your business understand the profitability of your inventory and turnover rate, among other important metrics. This aids in inventory management and your business’s overall financial health. They empower you to make critical data-backed decisions, including which items to stock, cash flow optimization strategies to fund inventory, improving margins by evaluating supplier costs, and estimating additional warehousing or fulfillment services to meet demand throughout the fiscal year, among other valuable insights.

Sales tax implications are common challenges e-commerce businesses face. Depending on how much you sell to a particular state, you may be responsible for sales tax in multiple states, even if you're not physically located there. This common bookkeeping challenge is referred to as an “economic nexus.”

We don't connect to any e-commerce platforms or marketplaces. Instead, we securely connect to over 14,000 banks and credit card institutions. Payments made through payment processing platforms such as Stripe are typically deposited into a bank account that appears in your books. Providing a report from Shopify, Stripe, and other prominent platforms to your full-service bookkeeper allows them to reconcile these amounts in your books efficiently.

Sales tax compliance necessitates regular monitoring, as each state has distinct filing requirements and deadlines. We closely monitor sales tax obligations and file sales tax on your behalf using state sales reports.

Our accountants have advised thousands of e-commerce business owners, including eBay and Walmart sellers, with nuanced, strategic tax support, generating important financial insights. This extends to a diversity of scenarios. For example, inventory costs are recognized as a business expense once the inventory is sold. But what happens if you purchase two identical items for resale at two different price points, say $10 and $15, and you sell one of the two. What costs would you use? In this instance, your accountant, experienced in e-commerce, would present your options on whether to use FIFO or LIFO methods to change the cost of goods sold in a way that is favorable to your operations.

1-800Accountant helps your e-commerce business improve its profitability by taking a strategic approach to your operations. Your designated accountant or team will engage in financial forecasting, revenue analysis, cost and cash flow management, among other tried and true methods, to ensure the long-term profitability of your e-commerce business.

1-800Accountant's full-service online bookkeeping solution promotes compliance, supports operations, and focuses on core metrics essential to e-commerce growth. This includes inventory tracking and COGS calculations for your e-commerce business. Without proper inventory tracking and COGS calculations, the IRS may disallow deductions you'd otherwise be eligible for, likely increasing your tax liability.

1-800Accountant addresses returns, refunds, and chargebacks for your e-commerce business by adhering to accounting standards to ensure compliance, regular financial tracking to ensure accuracy, and a consistent reconciliation schedule to ensure all of your returns, refunds, and chargebacks match your business's financial records.

ClientBooks, our proprietary e-commerce bookkeeping platform, currently supports accrual basis accounting. This method records transactions based on when a product or a service is exchanged. Revenue transactions are recorded by your bookkeeping team on the date that a customer becomes legally obligated to pay you for providing a product or a service. Expense transactions are recorded when you become legally obligated to pay for a product or service received.

1-800Accountant's Client Portal is your centralized hub to upload and store essential financial documentation and income tax returns, transmit messages to your designated accounting team, and access financial dashboards and reports impacting your e-commerce operations in real-time. These important, up-to-the-minute insights empower you to make critical business decisions.

1-800Accountant can help your e-commerce business prepare for funding, loans, or valuation in numerous ways. This is achieved primarily through maintaining compliance, strategic, long-term tax planning, while ensuring overall financial transparency. This way, your small business will attract the investment or loan you're targeting. If valuation is a greater concern, the value of your business will be more realistic and reflective of market norms and conditions with the help of the in-house experts at 1-800Accountant.