Question 1

Why is bookkeeping important for e-commerce businesses?

Accepted Answer

Accurate and timely bookkeeping is crucial for e-commerce businesses, as it fosters compliance and supports efficient operations. Improper bookkeeping practices can be detrimental. For example, inventory purchases are not fully deductible at once; they are deducted gradually as items are sold and recognized as cost of goods sold (COGS). Without proper tracking of inventory costs, the IRS may disallow your deductions, potentially increasing your tax liability.

Question 2

How do proper bookkeeping and accounting services help e-commerce businesses?

Accepted Answer

E-commerce accounting and bookkeeping services help your business understand inventory profitability and turnover rate, among other key metrics. This aids in inventory management and your business’s overall financial health. They empower you to make critical data-backed decisions. This includes which items to stock,  cash flow optimization strategies to fund inventory,  improving margins by evaluating supplier costs, and estimating additional warehousing or fulfillment services to meet demand throughout the fiscal year, among other valuable insights.

Question 3

What are common bookkeeping challenges e-commerce businesses face?

Accepted Answer

Sales tax implications are among the most common challenges e-commerce businesses face. Depending on how much you sell to a particular state, you may be responsible for sales tax in multiple states, even if you're not physically located there. This common bookkeeping challenge is referred to as an “economic nexus.”

Question 4

What e-commerce software does 1-800Accountant connect to (Shopify, Stripe, etc.)?

Accepted Answer

We don't connect to any e-commerce platforms or marketplaces. Instead, we securely connect to more than 14,000 banks and credit card issuers. Payments made through payment processing platforms such as Stripe are typically deposited into a bank account that appears in your books. Providing a report from Shopify, Stripe, and other prominent platforms to your full-service bookkeeper allows them to reconcile these amounts in your books efficiently.

Question 5

How does 1-800Accountant manage sales tax compliance across different states?

Accepted Answer

Sales tax compliance necessitates regular monitoring, as each state has distinct filing requirements and deadlines. We closely monitor sales tax obligations and file sales tax on your behalf using state sales reports.

Question 6

How does 1-800Accountant handle multi-channel sales (e.g., Amazon, Shopify, Etsy)?

Accepted Answer

Our accountants have advised thousands of e-commerce business owners, including eBay and Walmart sellers, with nuanced, strategic tax support. This generates important financial insights and applies across a range of scenarios. For example, inventory costs are recognized as a business expense once the inventory is sold. But what happens if you purchase two identical items for resale at two different price points, say $10 and $15, and you sell one of the two? What costs would you use? In this instance, your e-commerce accountant would present your options on whether to use FIFO or LIFO methods to change the COGS in a way that is favorable to your operations.

Question 7

Can 1-800Accountant help e-commerce companies improve profitability?

Accepted Answer

1-800Accountant helps your e-commerce business improve its profitability by taking a strategic approach to your operations. Your designated accountant or team will engage in financial forecasting, revenue analysis, cost and cash flow management, among other tried and true methods, to ensure the long-term profitability of your e-commerce business.

Question 8

Can 1-800Accountant track inventory and calculate COGS?

Accepted Answer

1-800Accountant's full-service online bookkeeping solution promotes compliance, supports operations, and focuses on core metrics essential to e-commerce growth. This includes inventory tracking and COGS calculations for your e-commerce business. Without proper inventory tracking and COGS calculations, the IRS may disallow deductions you'd otherwise be eligible for, likely increasing your tax liability.

Question 9

How does 1-800Accountant handle returns, refunds, and chargebacks?

Accepted Answer

1-800Accountant addresses returns, refunds, and chargebacks for your e-commerce business by adhering to accounting standards to ensure compliance, regular financial tracking to ensure accuracy, and a consistent reconciliation schedule to ensure all of your returns, refunds, and chargebacks match your business's financial records.

Question 10

Does 1-800Accountant offer cash and accrual accounting? Which is best for e-commerce?

Accepted Answer

ClientBooks, our proprietary e-commerce bookkeeping platform, currently supports accrual basis accounting. This method records transactions based on the date a product or service is exchanged. Revenue transactions are recorded by your bookkeeping team on the date that a customer becomes legally obligated to pay you for providing a product or a service. Expense transactions are recorded when you become legally obligated to pay for a product or service received.

Question 11

Does 1-800Accountant offer real-time financial dashboards or reports?

Accepted Answer

1-800Accountant's Client Portal is your centralized hub to upload and store essential financial documentation and income tax returns, transmit messages to your designated accounting team, and access financial dashboards and real-time reports impacting your e-commerce operations. These important, up-to-the-minute insights empower you to make critical business decisions.

Question 12

How does 1-800Accountant help e-commerce businesses prepare for funding, loans, or valuation?

Accepted Answer

1-800Accountant can help your e-commerce business prepare for funding, loans, or valuation in numerous ways. This is achieved primarily by maintaining compliance and implementing strategic, long-term tax planning, while ensuring overall financial transparency. This way, your small business will attract the investment or loan you're targeting. If valuation is a greater concern, the value of your business will be more realistic and reflective of market norms and conditions with the help of the in-house experts at 1-800Accountant.

Accounting Solutions for E-Commerce & Online Retailers

Financial services for e-commerce professionals

Full-Service E-Commerce Bookkeeping

Every E-Commerce Deduction Claimed

Tax Preparation and Filing for Online Retailers

Full-Service E-Commerce Bookkeeping

Every E-Commerce Deduction Claimed

Tax Preparation and Filing for Online Retailers

Why you should choose 1-800Accountant

Your accounting team helps maximize online sales

E-commerce deductions ensure you keep more

Year-round e-commerce support

Packages & pricing

Core Accounting

Core Accounting

Packages & pricing

Save the most with financial services for your e-commerce retail business. Get started with an accounting expert today.

Customer spotlight

Frequently Asked Questions

Why is bookkeeping important for e-commerce businesses?

Why is bookkeeping important for e-commerce businesses?

How do proper bookkeeping and accounting services help e-commerce businesses?

How do proper bookkeeping and accounting services help e-commerce businesses?

What are common bookkeeping challenges e-commerce businesses face?

What are common bookkeeping challenges e-commerce businesses face?

What e-commerce software does 1-800Accountant connect to (Shopify, Stripe, etc.)?

What e-commerce software does 1-800Accountant connect to (Shopify, Stripe, etc.)?

How does 1-800Accountant manage sales tax compliance across different states?

How does 1-800Accountant manage sales tax compliance across different states?

How does 1-800Accountant handle multi-channel sales (e.g., Amazon, Shopify, Etsy)?

How does 1-800Accountant handle multi-channel sales (e.g., Amazon, Shopify, Etsy)?

Can 1-800Accountant help e-commerce companies improve profitability?

Can 1-800Accountant help e-commerce companies improve profitability?

Can 1-800Accountant track inventory and calculate COGS?

Can 1-800Accountant track inventory and calculate COGS?

How does 1-800Accountant handle returns, refunds, and chargebacks?

How does 1-800Accountant handle returns, refunds, and chargebacks?

Does 1-800Accountant offer cash and accrual accounting? Which is best for e-commerce?

Does 1-800Accountant offer cash and accrual accounting? Which is best for e-commerce?

Does 1-800Accountant offer real-time financial dashboards or reports?

Does 1-800Accountant offer real-time financial dashboards or reports?

How does 1-800Accountant help e-commerce businesses prepare for funding, loans, or valuation?

How does 1-800Accountant help e-commerce businesses prepare for funding, loans, or valuation?

Financial services for e-commerce professionals

Full-Service E-Commerce Bookkeeping

Every E-Commerce Deduction Claimed

Tax Preparation and Filing for Online Retailers

Full-Service E-Commerce Bookkeeping

Every E-Commerce Deduction Claimed

Tax Preparation and Filing for Online Retailers

Why you should choose 1-800Accountant

Your accounting team helps maximize online sales

E-commerce deductions ensure you keep more

Year-round e-commerce support

Packages & pricing

Core Accounting

Core Accounting

Packages & pricing

Save the most with financial services for your e-commerce retail business. Get started with an accounting expert today.

Customer spotlight

Frequently Asked Questions

Why is bookkeeping important for e-commerce businesses?

Why is bookkeeping important for e-commerce businesses?

How do proper bookkeeping and accounting services help e-commerce businesses?

How do proper bookkeeping and accounting services help e-commerce businesses?

What are common bookkeeping challenges e-commerce businesses face?

What are common bookkeeping challenges e-commerce businesses face?

What e-commerce software does 1-800Accountant connect to (Shopify, Stripe, etc.)?

What e-commerce software does 1-800Accountant connect to (Shopify, Stripe, etc.)?

How does 1-800Accountant manage sales tax compliance across different states?

How does 1-800Accountant manage sales tax compliance across different states?

How does 1-800Accountant handle multi-channel sales (e.g., Amazon, Shopify, Etsy)?

How does 1-800Accountant handle multi-channel sales (e.g., Amazon, Shopify, Etsy)?

Can 1-800Accountant help e-commerce companies improve profitability?

Can 1-800Accountant help e-commerce companies improve profitability?

Can 1-800Accountant track inventory and calculate COGS?

Can 1-800Accountant track inventory and calculate COGS?

How does 1-800Accountant handle returns, refunds, and chargebacks?

How does 1-800Accountant handle returns, refunds, and chargebacks?

Does 1-800Accountant offer cash and accrual accounting? Which is best for e-commerce?