In 2015, global retail on e-commerce platform was 7.4% and is expected to grow to almost 22% in 2022. Thousands of entrepreneurs have moved their business to e-commerce platforms in the recent years. Accounting is the hardest part of a business. However, your cash management and other accounting activities will decide whether the business grows or breaks down.
There are accountants for e-commerce businesses available in the market. They are professionals with years of experience who have worked closely with your industry. They can help you start an e-commerce business, file tax returns, manage overseas taxes, and manage cash flow.
Here are some ways to hire a accountant in london for your e-commerce business is beneficial:
Accountants will help you start an e-commerce business.
Individuals would like to act as independent traders and earn a salary from their profits by selling a product. Here you don’t need to have a physical facility, and any room in your house is the office. Take your business to any online platform and make your phone your personal assistant.
But, an accountant will always recommend you to choose a limited company. It can be difficult to operate and expensive to maintain. However, you pay less tax on the profits made. Moreover, if there is a dispute in the company, you are not sued by the law, but by your company.
Accountants suggest to businesses which type of accounting to choose.
There are two types of e-commerce business accounting systems:
- Cash accounting
- Accrual accounting
Cash accounting is the most basic form of accounting used in small e-commerce businesses. Any cash flow in or out of the business is recorded in books. You can track the amount of money in your accounts. Plus, you don’t have to pay your income tax for payments not received on your tax return.
But, it becomes difficult to track the actions you owe as no transactions are made and no records are available in the books.
When your business begins to grow, accountants recommend accrual accounting. All your income, expenses and sales are recorded, even when no transactions are made with your bank account.
Accountants run your business.
It is difficult for the owners to regularly maintain the database. But, it is an accountant’s responsibility to categorize all transactions, establish a budget, ensure timely taxes, accurate recording of data, and distinguish between returns and chargebacks.
To start a business, you have a lot of responsibilities and it is difficult to stick to the budget. Accountants manage your cash flow and track unnecessary business expenses.
They create financial statements that give you a clear picture of profits and losses in the business.
E-commerce is associated with return policies and chargebacks. A business should record this data under “Returns and Allowances,” and accountants can help owners track it.
Accountants reduce business operating costs.
As the business grows, operating costs also increase. Home offices are turning into workstations, more employees and inventory are needed, all of this costs money. An accountant can create a budget based on your current financial situation and your business needs.
Moreover, you can outsource all your accounting tasks to a firm. By doing so, you save money on accountants, in-house accountants, tax advisors, financial planners, etc.
Accountants, do your taxes.
If your company’s turnover exceeds the primary tax threshold, you must register for VAT. Businesses need to record this information regularly and accountants process this data.
There are several other taxes that a company must file on time. Tax returns require accurate data for every transaction made in the business.
Some e-commerce companies sell internationally, where they have to pay customs fees, VAT, etc. An accountant can help you manage all of this.
An accountant has the technical skills and experience to take your business revenue to the next level. They can advise you on the latest trends, government rules and regulations, auditing, tax rules, etc.
Although small e-commerce businesses do not need hire accountants, it is a must for large companies. As the size of the company increases, the financial structure becomes complex, as do the financial activities.