Notes

What Does an Ecommerce Bookkeeper Do
What Does An Ecommerce Bookkeeper Do?
Juliet Aurora
May 13, 2022
5:12 pm
Estimated reading time: 6 minutes.

This is a guest blog written by our friends at A2X. Read on to the end to download a free 113 point ecommerce bookkeeping checklist that we helped to create!

“If you only keep your books for the purposes of filing taxes then you are missing the most important reason to have clean, clear financials. You can’t proactively manage what you can’t see.”

AIS Solutions
Professional bookkeepers can save your ecommerce business time and money.

Keeping accurate and up-to-date accounts is a vital part of running a resilient business. And having an expert onside as early as possible is invaluable.

So if you’re thinking about hiring one, or interested in understanding exactly what they can do for your business, you’re in the right place.

In this guide about ecommerce bookkeepers, you’ll find:

Bookkeeping vs accounting: what’s the difference?
What makes ecommerce bookkeeping unique?
Benefits of having an ecommerce bookkeeper
When to hire an ecommerce bookkeeper
A free resource to streamline your ecommerce bookkeeping
Let’s jump in.



Bookkeeping Vs Accounting: What’s The Difference?

Both bookkeepers and accountants deal with your company’s financial records. But there are some key differences between the two.

Bookkeeping
Bookkeeping is the ongoing maintenance of your company’s accounts.

This involves implementing and advising on a wide range of processes, including:

Recording and tracking transactions
Bank account reconciliations
Payroll, invoicing and debt collection
Bill management
Remitting sales tax
Budgeting, reporting and forecasting
Bookkeeping helps you to record and understand the day-to-day state of your finances.

Accounting
Accounting looks at the bigger picture.

An accountant uses information compiled by the bookkeeper to prepare financial statements and tax returns.

They also conduct analyses and make financial projections for the company’s future.

Without efficient bookkeeping, accountants will have to spend longer tidying and organizing your records rather than helping you grow and make more money.



What Makes Ecommerce Bookkeeping Unique?
There are some key challenges when it comes to bookkeeping for ecommerce businesses specifically.

Sales tax is complicated
Sales tax has become a real challenge for ecommerce sellers. Particularly for those who sell in the United States, but also here in Canada.

Every state has its own rates, and jurisdictions within them that have varying rates too. The rates you pay depend on where you’re located compared to your buyers.

And things change year on year.

That’s before we think about overseas taxes.

Transaction volumes can be huge
As you grow, so will your transaction volumes. And they’re limited only by your available inventory (and addressable market). So you could be looking at hundreds or thousands of transactions every day.

It’s great for your revenue.

But sales channels like Amazon don’t include a breakdown of fees, taxes and other costs in their lump sum payments to you.

Deciphering the data for each transaction requires specialized accounting software.

Inventory management is key but tricky
“The challenge is in keeping track of how much product you have in production, en-route, in customs, at your storage warehouse, in a shopping cart, or in a returns pile.”

A2X.
Inventory for ecommerce is a balancing act.

You’ll need to consider things like sales channels, returns and third party fulfilment fees.

Carrying too little means you’re missing out on business and customers are left waiting.

Carrying too much can cause cash flow problems.

And it only gets more complicated as you expand your product range.

But that’s what ecommerce bookkeepers are for…
It’s not easy to juggle the complexities of ecommerce bookkeeping while maintaining your accounts.

But ecommerce bookkeepers are skilled at managing these challenges.

And this is what makes them so valuable.

They’re experts in ecommerce bookkeeping so you don’t have to be.



Benefits Of Having An Ecommerce Bookkeeper
You’re required by law to keep records of the financial activities of your business.

But having an ecommerce specialist managing your accounts has added benefits for your business. Here are some, just to name a few:

Bookkeeping protects your profits
There are numerous expenses when selling online.

Production, storage, subscriptions and shipping – not to mention fees! You need to keep on top of these to ensure that you still make a profit, and you know what your breakeven is.

Efficient bookkeeping gives you visibility.

You can monitor your expenses and returns, and maintain a profitable business.

You’ll make better business decisions
Tidy accounts give a clear view of what’s working and what’s not in your ecommerce business.


This visibility makes it easier to set a profitable course for your company’s future.

Tidy books mean lower accountant fees
The time your accountant spends fixing bad bookkeeping costs you more than hiring a bookkeeper in the first place.

Use your accountant for what they do best. Have your bookkeeper manage the rest.

You’ll likely save time, stress, and money.

Your business is more attractive to buyers
If you’re considering selling your ecommerce business one day, good bookkeeping is a must.

Those who pay the best prices don’t have time to investigate untidy books.

And accurate financial records show potential buyers that your business isn’t hiding any unwelcome surprises.



Hiring An Ecommerce Bookkeeper
Can you keep your own books? Of course!

Should you keep your own books? Maybe not…

Many new business owners are lured into do-it-yourself bookkeeping hoping they’ll save a few dollars.

But as your business grows, things can get out of hand. Bookkeeping gets more complex, and manual processes are time-consuming and error-prone.

As your bookkeeping scales up, you’ll want to hire a professional.

While at-home bookkeeping isn’t a sustainable option, AIS Solutions offers QuickBooks training and support for those still in the DIY phase.

When should I hire a bookkeeper?
The sooner the better!

Having solid bookkeeping processes from the start will prevent you from getting behind. You’ll also have a clearer picture of your finances as your business progresses.

Signs that it might be time to hire a bookkeeper:
Your business is growing, along with the difficulty of your bookkeeping.
You have financial resources, but you’re time-poor.
You’re being pinged with late fees and fines for making mistakes with your tax.
You have employees and you’re not sure about payroll tax.
Options for outsourcing your ecommerce bookkeeping
There are a few options for bringing in a professional bookkeeper.

Hire an employee
You could hire a professional bookkeeper as an employee of your business.

They’ll be available for you all day every day, and they’ll get to know your business well.

However, hiring a full-time employee can be costly, and not all bookkeepers are well-versed in the ecommerce landscape.

Bookkeeping also isn’t a regulated industry, so you’ll want to be sure that you’re hiring someone who knows their stuff.

If you decide to hire a full-time bookkeeper, AIS Solutions have created a handy tool to test their knowledge.

Work with a contractor
Hiring a contractor can be more affordable and more flexible than an employee.

But flexibility can go both ways. Juggling other clients may impact your contractors turnaround times. Plus, if they’re sick or on holiday, there’s no one to take their place.

Again, you’ll need to consider who you’re hiring and their ecommerce experience.

Team up with a specialist ecommerce firm
Specialist ecommerce firms like AIS Solutions work with online sellers all the time.

They have tried and tested solutions to the challenges of ecommerce bookkeeping.

Bookkeeping firms give you other advantages.

You’ll have access to a wider range of specialist knowledge. And, you can work more efficiently and flexibly than with a solo bookkeeper.



Take Charge of Your Ecommerce Bookkeeping With Our Free Checklist


Standardizing and recording your bookkeeping processes helps you grow your business.

That’s what our Essential Ecommerce Bookkeeping Checklist is for.

We’ve teamed up with leading ecommerce accountants AIS Solutions and Ledger Gurus to help you systematize your bookkeeping.

The checklist goes into detail about the best practice bookkeeping processes for ecommerce businesses. We show you why, how, and when to do them.

You’ll have confidence that the right processes are in place. https://aissolutions.ca/bookkeeping-for-saas/ will be consistent and error-free if you follow the steps correctly.

And handing over tasks will be easy, giving you more time to focus on your strengths.

Download the checklist here.

Here's my website: https://aissolutions.ca/bookkeeping-for-saas/