What Ecommerce Retailers Wish Their Accountants Understood
Accountants are your business’s backbone. They help you understand where you currently stand financially, how far you are from achieving that goal and what you need to do in order to remain at the top. A business functions for the core purpose of making money, performing essential tasks achieving organizational strength by leveraging profit margins and service offerings.
The internet has given birth to a new type of business, which took the world by storm and is now easily beating retail giants. Ecommerce retail stores are born global businesses, that dedicated their resources into facilitating a larger client base connect and make purchases from the comforts of their homes, office, the bus stop or anywhere else. Giants such as Amazon have concurred the retail environment, understanding the needs of patrons and successfully satisfying their entire purchase experience by limiting the hurdles that revolve around purchasing goods of all kinds on a daily basis.
Earlier, one could buy book and electronics online. In today’s day and age, you can buy apparels to groceries all through the tap of a button. You no longer need to carry the heavy bags of your latest shopping spree in to your car and then back home all things are now delivered to your home or office.
Due to this mega boost in the Ecommerce industry, businesses that have not adopted an online presence have become and are becoming obsolete. Unfortunately, however, many ecommerce retailers undermine the importance of ecommerce accountants and how having the right people can actually save them a great deal of trouble and can even become the biggest Asset for such a store.
This article discusses what things you might miss out when you try to manage your ecommerce store’s accounting and its books.
Remain Prepared for Tax Time
The biggest fear of all businesspeople is tax time. A real testing time, where days and nights are spent in front of a screen, or in a shoe box going through receipts and crunching numbers. Unless of course you are, smart and actually invest in an ecommerce tax accountant, bookkeeper or tax expert. Understandably, many business owners opt out of getting an accountant on board the initial days of their business. These technologically advanced days have enabled humans to let their cars drive themselves, how bad could it be for a virtual accountancy firm such as Monily to be handling your business’s books and keeping you tax ready. You can save yourself a great deal of pain and unneeded diversions by entrusting your books to specialist that will help you get ready for tax time. Many part time accountants that are employed by many ecommerce stores generally hold off from tax preparation and charge additionally to get their taxes done.
Your business depends upon multiple processes happening at the same time, throughout the year. Your books and tax preparations should also be the same, and are to be maintained in a similar manner.
Merchant accounts are essential for all ecommerce business owners. Having an accountant that thoroughly understands the process of getting one, and is able to help you through the process of successfully applying for one is essential. A merchant account basically enables you to be able to accept payments and charges for your products virtually. Generally, through debit or credit cards, which allows you to accept reoccurring credit transactions done by customers. In order to be eligible for one you need to have a positive credit rating, transparent transaction history and the ability to understand and forecast your books in a representable manner.
An ecommerce store without a merchant account or the ability of performing online transactions is generally undermined and considered as untrustworthy.
Cash flows and Revenue Cycle
Understanding how much to keep and how quickly to get a new inventory, is closely related to the amount of money you make at the end of the day through those transactions. This is what dictates when it is the best time for you to put up a sale, how much of a percentage to offer clients and what you take home from these sales. No business on earth gives discounts for the sheer love for their clients, there is always a financial motive lingering underneath somewhere. How your cash flows, how many receivables and payables you have determine a great deal about the standing of your business and also help carve out future strategic steps that you need to take.
A good accountant will help you understand your account standings as well as your actual profit margins; this will empower you to take decisions crucial to your business at time critical situations. How soon your revenue cycle flows back in, is also determined through this process.
An accountant is your business’s best friend, which is probably more than understood by all progressive business owners. However, their influence and need within Ecommerce retailers is furthermore vital. As essential processes such as acquiring a merchant account and establishing a consistent revenue stream along with maintaining books and getting your retail store tax and audit ready, are imperative for the success of all such businesses.