April 8, 2020
How to Choose an Ecommerce Accountant for Your Online Store

How to Choose an Ecommerce Accountant for Your Online Store

Hey, it’s Patti Scharf, CPA and Co-Founder
of Catching Clouds, the leader in ecommerce accounting, and today we’re
going to talk about how to find an ecommerce accountant for your online
store. And watch until the end because I’m going to give away a free download
to, “16 Questions that You Should Ask When Looking for an Ecommerce Accountant.
Alright, let’s get started. Before you look for an accountant, you need to know
what kind of need you’re trying to fill, and you’re going to have different needs
at different stages of your business. So let’s get started with stage number one.
All right, stage number one is what I would consider kind of a startup phase.
You’re making somewhere between nothing and maybe $20,000 a month in
revenue, and you’re usually selling on maybe one channel like Amazon FBA.
Usually people in this stage are selling kind of on the side. Maybe they have a
full-time job, and they want to fire their boss, so they want this other
business to replace their income. In this stage of the game, you’re really
trying to figure out what kind of legal formation you should have, whether
you should be an LLC or maybe an S corporation. Something like that. You want to know what are business expenses that are deductible. You really want to
know the logistics of knowing how much you made overall and how that’s going to
impact you financially. So at this stage of the game, you want to get a tax
Certified Public Accountant. You want a CPA who focuses on taxes who can tell
you all the ins and outs of starting a business and what you need to know. If
you cannot afford a bookkeeper at this stage, I wouldn’t panic. That’s okay. You can check out our courses, Accounting for Amazon and
Accounting for Shopify. I’ve got links below about those. If you can afford a
bookkeeper, all the better. I would check one out, and I would follow all the tips
that we have for stage two of your business – coming up next.
Alright, stage number two is when you are making somewhere between $20,000 and
$50,000 a month. When you move on to stage 2, you are probably in a position
where you’ve quit your job. This is your full-time gig. All of your attention is
on this. You might even have a few people who are working for you, so you’ve got
employees, and you’re really concerned about cash flow because you are all-in,
baby. Like this is your deal. You’ve got to make this work, so you’re really
concerned about cash flow. You might have been doing your own books and now you’re starting to feel like you’re kind of losing grip on it. Maybe you’re too busy
doing other things and it’s gone by the wayside, and you really need to get
control over your financials. Another problem is because you’re so tight on
cash flow, you might need to take out a loan or something from the bank, and the
bank is requiring you to get financials, so you need a real bookkeeper at this
point to help you out. The good news is that there are a lot of
accountants who are starting to specialize in ecommerce. The bad news is there are a lot of accountants who are *starting* to specialize in ecommerce. A lot of them don’t quite know all the ins and outs. If you are finding that
your accounting is being done where you’re pulling in all of your sales
transaction by transaction, that should be a red flag to you that you are not
doing things the right way. I would be really careful about that. You might want
to check out the courses that I talked about before, the links are down below in
the description, or have your accountants check them out just to make sure that
you’re on the right path, because you don’t want to get too much further down
the road and then have to unravel the huge mess that’s being created by having
individual transactions pulling into your system. Another thing I would keep
in mind is that a lot of the accountants who are serving this particular size
business – they only focus on Amazon and Shopify. They probably don’t go much
beyond that, and if you ask them to do more, it may be really challenging for
them. You can easily outgrow somebody who is working at this level, so just
keep that in mind. If you see packages that they’re offering packages that are
kind of small, and they give you three tiered solutions, they’re probably doing
a very specific service where they’re giving you some kind of cleanup at the
end of each month but you’re really doing all the heavy lifting throughout
the month. Sometimes it works out great for people;
sometimes other people are like, “Heck I could do that myself.” So just keep in
mind what it is you’re getting. Ask the questions that we have at the end of
this video, and just go into everything with your eyes wide open.
Alright, so that brings us to stage number three which is really $50,000 per month and up – I would say going up to tens of millions
of dollars. You can still do small business accounting using systems like
QuickBooks Online and Xero up into the tens of millions of dollars. If you get
up to a hundred million, you’re gonna want to go check out something
like NetSuite, and then you’ll want to look for an accountant that specializes
in NetSuite. But anything in that just million to tens of millions range –
you can still look for an ecommerce accountant who’s going to keep you on a
smallish system. The companies who are in this stage of the game, they’re usually
selling on multiple channels – so three or more. I think we’ve had up to sixteen on
in our service and there are lots of moving parts. I would consider the
the companies at this stage as established sellers, so they’ve
been doing this for a while. They know what they need to know, and they’re
asking more sophisticated questions like how much are they making per channel, what’s their highest selling item, the SKU that’s
selling the most and the fastest, and how much profit are they making on each of
those. When you get to this stage of the game, a lot of accountants have
really struggled to help you because it’s so much work just to get the
information out of the different systems and scrub it up so it’s useful and so
that you can reconcile it in the accounting system. So if you have a more
sophisticated business, you’re going to need somebody who specializes in
ecommerce accounting for sure. And you’re definitely going to want to ask
the questions that we have in the list at the end of this video because they
become really, really important at this stage of the game. You’re gonna really
need a firm because you’re going to need more than a bookkeeper, more than
a controller, more than a cloud integrator. You’re going to need somebody who can do all of those different things, and that’s really hard to find in a
single person. You need a group of people who can help you out with that, and of
course, you’re not going to want to hire three individual people to handle that
work for you as an employee, It’s best to just go with a firm that can handle the
different components and deliver a full service for you. All right, so now you
know what kind of accountant to be looking out for at each different stage
of your business, but do you know the exact questions that
you want to ask? If not, no problem. Look down below in the description.We’ve
got a link to our download, “16 Questions to Ask When Looking for an Ecommerce
Accountant” that will give you both questions and answers that you should be looking for when you are interviewing your accountants. So go check that out. If
you like this video, hit the like button, share it with your friends, and be sure
to subscribe. Catch you later.

5 thoughts on “How to Choose an Ecommerce Accountant for Your Online Store

  1. Nice content. Thanks. I’m in the UK and just starting out on Amazon FBA. Have set up a company and just opened a business bank account. Now starting to look for an accountant but with ecommerce experience. Trying to get everything right from the start. I’ll take what you said on board

  2. Another great video. Got the questions and spending this month to find an accountant specialised in E-commerce in UK. Wish me luck!

    p.s. Would you recommend going for a local accountant more than ones in other citys?

  3. Ha, Awesome video.. Answered questions I was wondering about when to start and steps to take at each level of business. Thank you!

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