Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
You've just opened up a small ecommerce business, and things are moving quickly. You're making sales and keeping track of inventory, but you can't seem to find the time to keep up with your bookkeeping. So you decide to look for an ecommerce CPA.
With tedious tasks like advanced reporting, automated tax calculations, and streamlined order management, having a professional makes it easy to stay on top of your bookkeeping and grow your business.
Whether you are just starting or have been in business for years, the right ecommerce CPA can help you achieve your goals. But with thousands of CPAs out there, how do you know which person is the best for your business? Once you've hired them, what duties and goals should they tackle to help your ecommerce business succeed? This article will show the importance of hiring a credible expert to help manage your business and how to get the best one.
An Ecommerce Accountant vs. A CPA Ecommerce Expert
Most people loosely use the terms accountants and CPAs interchangeably when they aren't the same. For example, a CPA, also known as Certified Public Accountant, is an accountant. But not all accountants are CPAs. Interestingly enough, according to NASBA, only 30–45% of accountants in the US are CPAs.
Here are the three main differences between ecommerce CPAs and ecommerce accountants:
Licensing
To practice certain accounting tasks, CPAs must pass the licensure exam. But even before that, accounting students who want to become a CPA must complete 150 college credit hours plus hours of advanced accounting, core business courses, taxation, and auditing.
After passing the boards, CPAs must continue to take comprehensive tests and stay up-to-date with accounting-related laws and principles as they continually change.
Auditing
CPAs have to verify financial documents such as statements of financial health. It is their duty to see that all accounts are correct and accurate so that statements released to the public and the IRS show the accurate position of the business.
CPAs, like lawyers and doctors, take an oath to act as fiduciaries, meaning they are duty-bound to act in the best interests of their clients. While you may hire an accountant with the best intentions for your business, you'll have to trust solely on their word.
Taxes
Tax compliance, such as filing for tax returns, is one of many responsibilities both CPAs and non-CPA accountants can take care of.
Nevertheless, it is worth noting that passing the CPA in one state doesn't make you a CPA in other states or countries. You still need to pass the licensing exam in that area to do certain accounting practices such as auditing. However, hiring a CPA will give your ecommerce business an edge since an accountant who has passed licensing exams should always be up-to-date with taxation laws and codes.
Important Responsibilities of an Ecommerce CPA
Ecommerce CPAs are simply CPAs specializing in working with ecommerce businesses. Aside from basic accounting and financial duties, they need to:
- Managing invoicing, account receivables, account payables, etc.
- Oversee inventory and cost of goods sold
- Perform internal auditing
- Prepare timely financial statements for the month- or year-end reporting.
- Interpret and prepare reviews, projections, and forecasts for online strategies
Ecommerce CPAs are legally bound not to offer audit and consulting services to businesses in the same line as this would create a conflict of interest.
When to Hire an Ecommerce CPA
Hiring a professional is a tough decision for your online business. Here's how to figure out if you need an expert for your company:
Your Taxes are Too Complex to Handle
Sales tax, tax return, tax laws—how do you calculate and file them all? Do you even need to file them even if you transact sales online? How about overseas or multi-state sales? If you have these questions and don't know the answers to them, it is time to hire professional accounting services.
When You're Starting Your Business
Starting your business is very messy and confusing. Thus, having an expert to lay the foundation, such as setting up your accounts online or integrating the right accounting tools for your business, can help you succeed.
When You Need Auditing
As we mentioned, only CPAs can audit both internal and governmental auditing. Thus, if the IRS asks to audit your business, your CPA is qualified to represent your ecommerce business.
Key Factors to Hiring the Best CPA for Your Ecommerce Business
Adding a professional to your ecommerce business will help you deal with your finances efficiently. Ecommerce CPAs are more qualified and capable than accountants, but you don't just need the title and the license that comes with the person. Here are other qualifications to look at before hiring a CPA.
Experience in Ecommerce
We highly suggest you hire a CPA that has experience working with an online business and not just the usual corporate CPA firm. In addition, they must be computer savvy and have applied knowledge of ecommerce platforms and accounting software that can integrate inventory management and sales tax in a flash.
Availability
Everything is now virtual, including accounting services. But despite remote services and hectic schedules, you should still be able to reach your ecommerce CPA whenever you need them. Your business deserves quality attention and action.
Cost
Because of the extra effort of passing their license and gaining incredible knowledge, hiring an ecommerce CPA costs more than hiring a non-CPA. Of course, there are even more added costs if they have work experience in the business, other accounting jobs, and other factors that contribute to how well they do their jobs.
We suggest that you look for a CPA who can give you a billing structure that fits your budget. Because at the end of the day, you need a CPA who can improve your business and its overall financial health.
Hire Unloop Today
So, you've decided to hire a CPA for your ecommerce business. Congratulations! Recruiting a reputable ecommerce CPA is one of many important financial decisions that will greatly affect your business flow and success.
At Unloop, we know the ins and outs of hiring a great CPA for your ecommerce business. We've outlined the key factors to look for and some important responsibilities of an ecommerce CPA. Don't worry if you feel overwhelmed by all this information or just don't have time to vet candidates yourself. Our team at Unloop is passionate about helping businesses such as yours succeed, so you can focus on what you do best: running your online business. Give Unloop a call today!