With each passing year, an increasing number of new businesses are deciding to primarily operate online. By creating an internet business (frequently referred to as “eCommerce), your business can reduce operating costs and also extend your reach to almost anywhere in the world. The future of the business world will undoubtedly take place online and there seems to be no better time than the present to establish yourself in the e-commerce industry.
However, as you would probably expect, the world of eCommerce is incredibly competitive. As the cost of doing business goes down, it becomes easier for new businesses to enter into the fray—if you hope to succeed, then you will need to effectively separate yourself from the competition.
There are many different ways that your business can offer a competitive advantage. Creating a unique product offer, targeting a niche market, and operating on an economy of scale are just a few of the common options. But one competitive advantage that is frequently overlooked is the advantage that can be achieved with an eCommerce accountant.
In this article, we will discuss some of the most valuable benefits that an accountant specializing in eCommerce can potentially offer your business. We will also discuss some of the reasons that outsourcing these services to an already existing specialist may be especially lucrative. By making an active effort to establish a competitive advantage in every way you possibly can, your business will be much more likely to achieve its long-term objectives.
What are the services that an eCommerce accountant can provide?
As is the case with accountants who primarily operate in traditional industries, there are many different ways that an eCommerce accountant can potentially help your business. Most eCommerce accounting services will offer certified public accountants (CPAs) who are not only familiar with the ins and outs of the business world, but who are also familiar with the unique challenges (and opportunities) that exist in the world of accounting.
These are just a few of the services that an eCommerce accounting specialist can potentially provide:
- Establishing your business structure: whether your business is a sole proprietorship, a partnership, or even a corporation will have a direct impact on your accounting needs. An accounting specialist can help you recognize which structure is right for you.
- Assuring your business is legally compliant: your accountant can help you prepare your taxes, maximize your tax return potential, and also assure that—if the occasion were to arise—your business could easily pass an audit from the Internal Revenue Service (IRS).
- Creating an annual budget: budgeting will inevitably be a very important component of the business cycle. Your accountant can help identify areas where you can potentially cut costs, increase revenues, and generally improve your business’ financial performance.
- Deciding when it is time to grow: adding new employees, opening a physical location, and entering into a new industry will all be major decisions. A good eCommerce accountant will be able to recognize when it is time to grow and—just as importantly—will also be able to recognize when you may need to wait.
Other services provided will vary by the specific firm you are working with. Still, it is clear that hiring an accountant is one of the surest ways you can immediately improve your online business.
What are the benefits of outsourcing your eCommerce accounting needs?
Now, once you have decided that you would like to hire an accountant there are still quite a few important decisions that you will need to make. Specifically, you will need to decide whether you hire an internal accountant to work for your company or whether you will outsource your work to a firm that handles accounting for many different clients.
If your business a multi national corporation, then there is no doubt that hiring an in-house accountant is probably in your business’ best interest. However, most new businesses—especially those in the eCommerce space—have much smaller accounting needs. There are many reasons why outsourcing may be your best option:
· Decreased cost of accounting services per year
· Ability to access the knowledge and expertise of an entire firm (rather than a single individual)
· Access to other accounting-related services
· The option to use your accountant on an as needed basis—this can be done by keeping a firm on retainer or paying them on an hourly basis
· Access to already established accounting protocols (experienced firms will likely be able to directly address the specific needs of your company)
In other words, outsourcing your current eCommerce accounting needs is an excellent way for your business to “ease into” the industry without needing any of the commitments involved with hiring an in-house accountant to work full time.
When will it be time for my new business to hire an eCommerce accounting specialists?
If your business is a sole entrepreneurship with very simple accounting needs (for example, you only have a single client), then you may be able to get away with managing your financial situation entirely on your own. However, as your business expands, your books will become considerably more complicated. When deciding if it’s time to outsource your accounting duties, ask yourself these simple questions:
· How much time are you currently spending managing your books?
· How much money could you be making if this time used more productively? (opportunity costs)
· How large is your business? This can be measured either by revenues, locations, number of employees, or number of current clients.
· Are you comfortable handling the complexities of the accounting process on your own?
Hiring an eCommerce accounting specialist will be a very personal decision. However, there will ultimately come a point where keeping managing these duties yourself is simply inefficient.
How can I find the eCommerce accounting specialist that’s right for me?
Lastly, it is important to note that there are many different eCommerce accounting firms available for you to choose from. When comparing your options, it will be useful to keep each of these things in mind:
· Look for someone who has worked with businesses similar to your own (structure, industry, size, etc.)
· Visit each potential firm’s website and read reviews from previous client
· Choose a firm that is willing to answer your questions
· Actively weigh the costs of an eCommerce accountant against the potential benefits
By taking the time to do just a little bit of research, you will be much more likely to find the firm that is right for you.
Conclusion
As you can see, there are many different ways that an eCommerce accounting specialist can help your business achieve its dreams. Because the eCommerce industry is becoming increasingly competitive, it will be important to make sure your books are being properly managed as soon as you possibly can.
