When you’re a brick and mortar store, tax and other accounting issues are simpler because you’re dealing only with your area. E-Commerce is trickier because your customers come not only from all over the United States but potentially from other areas such as Canada and abroad.
When you’re dealing with so many issues, you need someone that specializes in e-commerce accounting. It’s specifically designed to deal with the needs of people who have online stores and all the issues that go with that.
We’ll examine why you need e-commerce accounting and how it makes running your business easier and more successful.
Dealing with Sales Tax Liability Every state has different sales tax requirements and for an e-commerce site that can be a nightmare. This can be intensified if you have an Amazon store and use fulfillment by Amazon because they have distribution centers all over the country. Some of your inventory can be in Illinois and the rest can be in Nevada. How can you keep up with paying sales tax? You need to collect and provide sales for any sales made in those states.
E-commerce accounting can help you with filing your taxes and collecting taxes from your e-commerce store. Without it, you could end up in legal trouble or need to pay additional taxes because you haven’t filed correctly.
E-Commerce Accounting for Inventory Management Having a single online store is challenging enough, but what if you’re selling products from multiple platforms? Perhaps you have a website, an Amazon store and sell on Facebook or Instagram.
You need a way to keep track of your inventory from its creation to the final sale. You can have inventory sitting in a warehouse and not know if you can sell it. You need a strong foundation of accounting to have a successful business model.
Financial or tax surprises can cripple a business, so maintain your accounting for online business including managing your inventory for accounting purposes.
Track High Volume Purchases with Ease If you’re a brick and mortar store, you have an idea of how many transactions in a day because there is a limited number of customers that can enter your store in a day. An online store can deal with 10,000 transactions in a single day or more.
They may be small value transactions, but high volume. Standard accounting solutions can’t keep track of such high volumes without crippling your accounting platform. E-commerce accounting can handle these types of transactions with ease.
You also deal with returns, refunds, and other issues that impact the number of transactions you deal with each day.
Do I Need E-Commerce Accounting? E-commerce accounting isn’t your standard business accounting. It’s designed to deal with the specific issues and problems that online stores face when it comes to keeping track of tax, inventory, transactions, and more.
Standard accounting software and businesses cannot handle these issues and it can end up costing your business. Whether you’re a small business that gets a dozen sales a day or a larger business that deals with thousands of transactions, you need specialized accounting. If you want to learn more about e-commerce accounting, then please contact our experts today.