What to consider while choosing an eCommerce bookkeeping service provider?

eCommerce bookkeeping service provider

It is evident that eCommerce bookkeeping services can prove to be too expensive for startups in the eCommerce business. The nature of bookkeeping in eCommerce business is quite complicated as it differs from the regular bookkeeping services one provides. One can expect a detailed level of bookkeeping involved with every online store. Small businesses seldom need the granular financial data provided by an eCommerce bookkeeping service provider. But when an eCommerce business grows, the granular financial details matter and often prove to be the pivotal aspect of success.

The need for an eCommerce bookkeeping service provider is enormous since several online businesses are clueless about managing their records. The faulty bookkeeping process is bound to affect their business negatively. Hence, eCommerce businesses need to understand the basics of eCommerce accounting before hiring a bookkeeper for their business.

While hiring an eCommerce bookkeeping service provider, one needs to assess their knowledge and expertise with different criteria:

  • Experience with multiple sales channels
  • Awareness about payment gateway and online payment channels
  • Familiarity with the latest accounting software for eCommerce like QuickBooks, Xero
  • Understanding of inventory management
  • Technical expertise in handling online systems

Choosing Potential Bookkeeper for your eCommerce Business

Choosing potential bookkeeper could become tricky for any eCommerce business knowing that the needs are unique and complex. Hence other than the aforementioned criteria, one should have a thorough understanding of why bookkeepers need to be conversant with payment gateways, inventory management, and sales channels.

  • eCommerce accounting relies on the financial transactions happening through sales channels, and not through banks. For most businesses, commercial transactions shown in bank statements is the entire data they need. By recording deposits as revenue, most inexperienced bookkeepers understate the income and put in information erroneously. This practice could hurt the business in the long run. An ideal eCommerce bookkeeper will dig through all kinds of sales channels for recording the accurate financial data without errors. They are likely to utilize tools that pool financial data from the platforms to well-known online accounting software like Quickbooks, Xero.
  • Additionally, their knowledge about online payment processors is crucial to collect payments as there are fees involved here. Hence, it is essential to opt for reconciliation of payment processor tracking information with relevant sales channel reports periodically. Their expertise with online accounting software like QuickBooks or Xero comes in handy when working with online systems. These solutions include provisions to calculate sales tax, payroll processing, inventory management, and the like.
  • An eCommerce bookkeeper should be aware of gross profit margins that determine how much an online business can spend on marketing, hiring new personnel consultants, and set out a budget. The accurate record of revenue and COGS based on every SKU is essential to determine the budget as well as gross profit margins. The inventory mentioned on the balance sheet should also signify the value of the product. The inventory value should reduce based on sales of any product.
  • Since eCommerce revolves around technology, an eCommerce bookkeeping service provider should be tech-savvy and also have a strong understanding of the trends of online businesses and the basic principles.

Finding an ideal eCommerce bookkeeping service provider will reduce the hassles involved in any eCommerce business. All the info must be handy for the company to grow profitably. In time, your business would soon need an advanced eCommerce accounting system with multiple features and functionalities. Additionally, the advanced systems need professionals with know-how on handling sales tax compliance, product profitability, inventory management, COGS, and more. Hence, choosing the right eCommerce bookkeeping service provider is crucial to the consistent success of your online business.

KiRi Accounting is a dynamic accounting and bookkeeping firm that has consistently delivered innovative eCommerce bookkeeping services to its clients. Contact us today to know how an eCommerce bookkeeping service provider can provide advanced bookkeeping solutions to help your e-store to grow and expand its operations and profitability.

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