A lot of traditional small businesses are considering giving ecommerce a shot. Business owners everywhere are just starting to recover from the effects of previous years' lockdowns. Revenue is slow, and foot traffic may be less now than in the previous years. So businesses have to meet their customers where they are.
Ecommerce is where the action is. But many small business owners can’t transition, much less see how an ecommerce accountant can help them. So let Unloop set the record straight on what kind of accountant you need.
The Non-CPA Accountant
Usually viewed as entry-level accountants who are within the 1–3 years of their career pre-CPA license. Not that this is the rule: some accountants have plenty of experience even without the CPA suffix.
To be considered a non-CPA accountant, a person must earn a degree in accounting or any commerce-related field such as business and finance. Then, they must practice accounting duties and be employed by a business.
The general function of an accountant for ecommerce business is summarized below.
A vital process in financial accounting is recording every business transaction with financial impact—that's bookkeeping. In most cases, bookkeepers regularly do this accounting function, although an accountant can also do it on top of other accounting-related duties.
Financial Statement Preparation and Reporting
Once they're done recording the business transactions in a given accounting period, they can prepare the financial reports. Income statements, balance sheets, and cash flow statements are staples in any business with a formal accounting system.
An accountant can balance the books, prepare the financial statements, and report them to the small business owner or the manager once done.
Budgeting and Financial Planning
After financial statement preparation and reporting, financial planning may follow. The accountant can analyze the numbers in the statements, conduct analysis and set a budget for business expenses depending on the estimated future revenue.
Internal Business Audits
Accountants have to ensure that everything they put down on the books complies with accounting standards. Otherwise, this may impact crucial areas of their client's business, such as taxation and financial management.
So they check the accuracy of the books and internal accounting processes to ensure the numbers adhere to principles and the systems are conducive to producing them.
General Business Consulting
It makes sense that an accountant will have a lot of insights about a client's business. They are the professionals who see the numbers behind the money-making machine. They are qualified to advise on a business's financial policy and strategy.
Things like cutting down costs in certain areas, product price increases, optimum inventory level, and taxes are only some of the things you can consult with a non-CPA accountant.
The CPA Accountant
These accounting professionals are beyond the 1–3 year mark and have earned a Certified Public Accountant (CPA) license.
Accountants with CPA in their names can do most if not all of the functions a non-CPA accountant can do with the addition of other exclusive tasks.
Audit Financial Statements
CPA accountants can represent a firm (government or private) to audit the financial statements of a small business or institution formally. This is to ensure that the data complies with the rules and standard practices of professional accountants.
This is important for tax purposes. Additionally, it's also important for a business's stakeholders, especially in businesses that are publicly owned.
Prepare and Sign Off on Tax Return Documents
For a tax return to be honored as legitimate, a licensed ecommerce tax accountant needs to sign off on the tax files used to remit the business's obligation.
The licensed accountant can also opt to prepare tax documents for their small business clients. This ensures that all the recorded amounts in the tax forms are compliant and correct.
In some entities, such as corporations, an accountant must have a CPA title before qualifying for a comptroller post. The job involves overseeing the accounting system of a business.
A CPA accountant must coordinate different complex functions to ensure everything is compliant. For example, they manage accounting payroll, accounts payable and receivable systems, inventory, and the accounting aspects of business administration.
While non-CPA accountants can also do consulting, the one given by a CPA is of a higher level. This is the effect of having exclusive functions that give them more opportunities to broaden their business insights.
Consulting with a CPA could mean more than just general business policies. They can participate in accounting systems planning, updating, and transition—whether it's for an accounting firm or a privately owned business about to go public.
Business owners can also consult them for company formation and more sophisticated investment and taxation strategies to increase equity value and bottom-line profit.
Ecommerce Accounting Services Have CPA and Non-CPA Accountants
Ecommerce business owners are unlike traditional businesses. They have certain accounting and finance needs that require a combination of CPA and non-CPA accountants.
Some outsourced accounting services like Unloop have a mix of accountants with years of experience catering to ecommerce businesses. We can offer big and small ecommerce sellers the following functions.
Accountants and bookkeepers know how to use online accounting software such as QuickBooks Online. Plus, they know how to use the software for online sellers participating in online marketplaces such as Amazon and Shopify.
They can also utilize different third-party apps to ensure the software is well integrated with the ecommerce platform of your choice. This makes recording transactions a breeze.
A team that offers accounting services can automate applications for bills and invoice payments along with the accounting software. As a result, financial obligations get paid upon the owner or manager’s approval.
This accounting service will help you better manage your ecommerce business's cash flow while ensuring they are acknowledged and recorded in your business’s books.
Specialist ecommerce accountants know how to work with different inventory systems in ecommerce platforms. Apart from that, they also use different inventory accounting methods to ensure you get the right valuation and cost of goods sold-an important thing to get right when getting your net revenue.
An ecommerce accounting specialist also knows how to work with your employee timesheets. They can collaborate with you or your human resource staff to find out the status of each of your employees so they can record the correct salary or wage expense amount.
This benefits employee morale. They get paid the correct amount based on their employment status and rates. This also helps you better calculate your business tax deductibles.
Accountants specializing in ecommerce understand the different taxes your online business has to pay. They understand where to find them and how to set up a collection system within the ecommerce platform, so you don't have to.
They can help you collect the right sales tax and ensure your accounting records are spotless and internally audited before filing a tax return.
Get a Team of Non-CPA and CPA Ecommerce Accountants
Whether you're transitioning to ecommerce or have started your business in the online marketplace, getting a team of specialized accountants is best. Unloop is one such team.
We have a pool of non-CPA and CPA accountants that have worked with several ecommerce businesses for years. We can do the services above. Of course, consultations are also a part of what makes Unloop awesome, so give us a call at 877-421-7270 or check out our ecommerce services now.