E-commerce Accounting vs E-commerce Bookkeeping. Any business owner, whether in the world of e-commerce or traditional brick and mortar stores, understands the importance of good accounting and bookkeeping. Without careful oversight and understanding of your financial records and data, it’s difficult to prosper and grow as a company. However, not every business owner will understand the key differences between bookkeeping vs. accounting, especially as they relate to the e-commerce world.
If you operate an e-commerce company, what do you need to know about your accounting services?
Here, we’re looking at the difference between e-commerce bookkeepers and e-commerce accountants. We highlight the essential tasks of each of these types of professionals and inspect key differences. We also take a look at outsourced accounting and how this novel approach to accounting can help your business reach new heights without sacrificing extensive time and resources from your in-house employees. If you’re looking to grow in the world of e-commerce, outsourced accounting is designed for you.
E-commerce Accounting vs E-commerce Bookkeeping.
WHAT IS E-COMMERCE BOOKKEEPING?
Bookkeeping is essential for the successful day-to-day operations of any company. Bookkeeping involves the daily recording, storage, and retrieval of financial information for a business. Most of these bookkeeping tasks take place via advanced accounting software that makes it easier to manage and navigate large amounts of data. Bookkeeping is engaged with common business transactions, including purchases, sales, receipts, inventory, and more.
Ecommerce bookkeeping responds to the unique nature of online retail and applies these tasks to e-commerce businesses. Ecommerce bookkeepers may be responsible for managing accounting software, determining how to track inventory, creating templates to track key pieces of financial data, and creating balance sheets and other financial documents.
WHAT IS E-COMMERCE ACCOUNTING?
While e-commerce bookkeeping may at first look the same as e-Commerce accounting, there are important differences to note. Ecommerce accounting is very similar to traditional accounting for businesses, but there are still some unique aspects. Ecommerce accounting refers to the collection, analysis, organization, and reporting of financial data for e-commerce businesses. Detailing financial transactions and assets, good e-commerce accounting is essential for the growth of any online company.
Essentially, e-commerce accounting (as compared to e-commerce bookkeeping) takes this role to the next level. Ecommerce accountants do more than just record and report financial data. Rather, these specialists will also interpret, classify, and analyze financial information to help you make important business decisions. In addition to accumulating and organizing financial data, accountants can also advise you on how to interpret and make the best use of this information. While accountants are generally trained to handle bookkeeping tasks, it doesn’t always work the other way around.
WHAT IS UNIQUE ABOUT E-COMMERCE ACCOUNTING?
For long-term success, you need accounting services tailored to your specific needs and industry. In the e-commerce world, your business doesn’t fall in line with traditional hours. Ecommerce companies are working around the clock, which means that tracking and managing things like inventory and cash flow become even more important. Not only that, but they also require additional resources to keep ahead of everything.
Being able to accurately analyze transactional data is also critical for e-commerce accountants. Unlike traditional retailers, most of your transactional data will most likely be found via your selling channels instead of bank accounts or credit card statements. When selling through online platforms, such as Amazon, you must account for additional fees on your sales that will affect your overall bottom line.
Additionally, e-commerce accountants need a firm grasp of how your inventory chain and process works. For a traditional store, inventory is easier to manage and track; however, with e-commerce, you may be shipping in your inventory from warehouses overseas. At times, you may never even come into contact with your own inventory, which means that having an effective inventory management plan is essential. Some seller platforms may also charge additional fees for storing your inventory. This means that having merchandise simply sitting in the warehouse can end up costing you money. Understanding how to efficiently manage your inventory flow is a key task for e-commerce accountants.
Finally, sales tax becomes much more complex when you’re in the e-commerce world. For traditional businesses operating out of the US, sales tax rates are generally stable and you only need to only account for federal and state taxes. It’s easy to record and understand these rates and how they’ll affect your finances. For e-commerce, however, you need to account for the possibility of making sales all over the world. This, of course, can make managing sales tax rates a nightmare if you don’t understand e-commerce accounting. Ecommerce Accounting vs Ecommerce Bookkeeping.
OUTSOURCED ACCOUNTING SERVICES FOR YOUR E-COMMERCE BUSINESS
If your business needs help with your accounting services, it may benefit you to look into outsourced accounting. By working with an outsourced accounting firm, your business gains access to an entire team of e-commerce bookkeepers and e-commerce accountants. Some of these firms even offer fractional CFO services to help you plan a financial strategy to help your company grow and improve.
Outsourced accounting firms generally offer the following services:
- Outsourced Accounting.
- Outsourced CFO.
- Outsourced BI.
- Strategic Tax Planning.
CONCLUSION
They say that money makes the world go round. We’re not entirely sure if this is true, but money is crucial for the long-term success of your business. Without a doubt. Ensuring that you have proper and effective bookkeeping and accounting is critical for the success and growth of your e-commerce company—no matter your business size or industry. While bookkeepers and accountants have slightly different responsibilities, both roles are important for your company to operate on a day-to-day basis, and eventually, reach new heights.
If your e-commerce business is in dire need of effective and efficient accounting services, you should give outsourced accounting a try. Outsourced accounting brings a full team of e-commerce accounting experts to your company and allows you to tap into their unmatched experience and expertise. To successfully navigate and succeed in the competitive e-commerce marketplace, your finances should be a top priority.
Ecommerce Accounting vs. Ecommerce Bookkeeping
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