If you’re running an e-commerce business, there’s a good chance you’re not an accounting expert. That’s not necessarily a bad thing. After all, your expertise is elsewhere!
While this isn’t immediately a problem, it can cause issues if you are completely clueless about how accounting works. If you don’t have expert accounting practices and specialized guidance specific to your industry, you could be losing a lot of money—or worse, missing out on big opportunities for growth.
Pro Tips for Any E-Commerce Business
Here are three significant tips you can use to protect your business and avoid costly oversights.
- Keep Accurate Records
As a small business, you have a lot of responsibilities—to your employees and to your customers. Maintaining accurate records may be a goal, but if it’s not a daily reality, you could be poorly situated for an audit or overpaying in taxes due to mismanaged expenses. Since the consequences of inaccurate record-keeping affect everything from cash flow to tax filings, many e-commerce companies turn to outsourced accounting. Regular and accurate record-keeping done by an expert means you can run your business with confidence knowing your books are always in order. - Maximize Your Tax Deductions
Nothing causes a headache quite like thinking about taxes. As a small business, taxes can feel overwhelming, yet not understanding the nuances of specific deductions may mean you’re paying unnecessary tax bills. When it comes to understanding deductions that benefit your business, make sure you’re looking at the whole picture. For example, you might remember to deduct your shipping costs but then forget to deduct the costs for the software that helps you manage these systems. Since deductions vary from state to state and county to county, it’s important you have a CPA that understands how to maximize deductions in your region. In the end, working with an experienced accountant amounts to one thing—more dollars in your pocket. - Base Your Decisions on Solid Financial Advice
When it comes to financial information, your gut reaction will be to focus on how your business is doing right now. Unfortunately, this isn’t always the best way to make business decisions in the e-commerce world. When you become hyper-focused on the present, you might overlook opportunities for affiliate marketing or key business partnerships that would benefit your company long-term and help you grow without adding overhead. You may think of accounting as limited to bookkeeping and taxes. However, accurate financial projections and budgeting reports are also tools to help you make key financial decisions. Using outsourced accounting gives you unbiased guidance. That way, you can avoid short-sighted decisions that may cost you more money in the long run and instead foresee smart opportunities or investments that can ultimately grow your business.
Grow Your E-Commerce Company with Management Advisory Services
Most small businesses can’t afford the high costs of a traditional full-time Controller or CFO, but outsourcing makes it possible.
Financial Expertise Without the High Cost of Salary & Benefits
By outsourcing Controller/CFO services, your business is receiving qualified and expert knowledge of its financial situation without paying the high salary and benefits of an in-house Controller or CFO. Management Advisory Services provides your business with financial advice from a highly qualified individual whose expertise goes beyond the scope of a bookkeeper or accountant.
Make Better Decisions with Outsourced CFO Services
Recording transactions is not the same as being a CFO in a company. More often, the bookkeeping provides information for the CFO to work with. Instead, the CFO’s role is meant to be more analytical rather than routine and predictable. Accurate and complete financial statements ensure better decision-making and readiness when you need to share records with important partners like employees, investors, or lenders.
Streamline Company Costs with Outsourced CFO Services
Beyond maintaining accurate financial records, outsourced CFOs provide recommendations on improving business processes and procedures that allow your business to be more streamlined. With an objective eye, find out when you need to adjust a decision before it costs you too much or how to grow through smart investments that match your business goals.
Conclusion
While you don’t need to be an accounting expert to run a successful e-commerce business, it’s important to be aware of ways to protect and grow your business. And professional accounting help is invaluable! If you found this blog helpful, you may enjoy the following blogs as well:
- 5 Essential Questions for the Growing E-Commerce Business
- How Will the Biden Tax Plan Affect Businesses?
- The Right Place at the Right Time? Lessons from 2020’s E-Commerce Winners
If you are looking for outsourced bookkeeping services in Newport Beach, San Francisco, or Walnut Creek, California, consider WCH CPAs.