Welcome to the era of e-commerce accounting, where digital transactions are overtaking traditional sales. Whether you're auditing a retail chain with an online storefront or a local farmer's market where sales receipts are digital, the reality is undeniable: you're an e-commerce accountant.
It's hard to find a business that hasn't integrated some form of e-commerce. Consider how ubiquitous services like meal-delivery apps or digital subscriptions have become. Even sectors traditionally reliant on in-person engagement are now e-commerce. From service providers to small-town artisans, online transactions, digital payments and maintaining a web presence have become standard.
There's no turning back to the old ways of doing business. The diversification of payment methods and selling platforms has turned every point of sale into a complex digital ecosystem, each with its nuances in tracking sales, delivering payouts, and managing taxes.
As accountants and bookkeepers, this shift may disrupt familiar processes, but it also unveils unprecedented opportunities for efficiency and growth — as long as you have the right tools and an understanding of this new landscape.
Advantages of becoming familiar with e-commerce accounting, and risks if you don't
Embracing e-commerce accounting offers significant benefits, while a lack of familiarity can pose substantial risks.
At its core, e-commerce accounting encompasses all the traditional elements: managing revenues, sales tax, returns, discounts, etc. The perceived complexity often arises from the necessity to maintain an accurate and up-to-date general ledger.
Many practitioners fear they'll need to specialize in platforms like Shopify, Square or Amazon, worrying about their ability to interpret reports or manage all the data with their more familiar manual processes.
They may think, "I've got all this data coming in from these different places, and I've got to consolidate it all into one place, every day. Do I have enough time? Will I understand all of the platform reports? Can I get it right and still make money with the client?"
If you're doing it manually, often the answer is no; there simply isn't enough time. Without effective e-commerce accounting automation tools, many accountants struggle to grasp the intricacies of the necessary data integrations, leading to potential inaccuracies or out-of-date GL balances. This often results in hesitancy to engage with clients who are heavily involved in e-commerce.
Proficiency in this area therefore enables accountants and bookkeepers to attract and retain clients that others might avoid due to perceived complexity, turning it into a strategic advantage.
Sherri-Lee Mathers, CPB, AIA, and founder of
Moreover, specializing in e-commerce clients can become a lucrative niche, providing a competitive edge in a market where many shy away from the challenges it presents.
Conversely, those who neglect to familiarize themselves with e-commerce risk missing out on a growing client base. They also limit their practice unnecessarily, turning away potential clients they are well-equipped to serve, provided they leverage the right tools.
In essence, embracing e-commerce accounting isn't just about keeping up; it's about staying ahead and capitalizing on emerging opportunities in the digital economy.
Getting acclimated with e-commerce: key steps
At first glance, e-commerce accounting can appear daunting, particularly when learning platform-specific reporting like Shopify, Toast or Square, which is then complicated by integrations with systems like QuickBooks or Xero. But the right automation tool simplifies these complexities, allowing accountants to optimize their operations without becoming platform specialists.
Consider that advisory work, which is inherently forward-looking, requires a rapid assimilation of financial trends and data to provide actionable insights. Delays in data processing hinder the ability to offer timely advice, emphasizing the need for automation in modern accounting practices. For this reason, accountants who choose to capitalize on the growing opportunity that e-commerce businesses present, need to ensure they are leveraging best practices in all areas.
So, how do you get started?
Begin by identifying which of your current clients are already engaged in e-commerce. You might be surprised to discover that you are more involved in this landscape than you initially thought.
This step is crucial as it helps you determine the necessary automation tools to enhance your services and expand your client base, ultimately boosting your practice's efficiency, and enabling your firm to quickly scale.
Deb Hall, owner of Antidote Bookkeeping, LLC, points out, "As soon as you introduce multiple payment options on a platform such as Shopify, it gets very complicated very quickly. Money doesn't just show up the next day." She has found automation platforms to be "a huge time saver and stress reliever.
Finding the right automation platforms comes down to due diligence. Test various tools, to ensure they are tailor-made for e-commerce and capable of handling multichannel sales effectively. You can enhance your expertise by getting certified in those tools, which not only builds your proficiency but also boosts client confidence in your services.
As you implement these tools, it's beneficial to engage with peer groups. Conversations with current users offer valuable insights into their advantages and drawbacks, which are crucial for making well-informed decisions.
Embracing sophisticated e-commerce accounting automation tools transforms challenges into opportunities, enabling accountants to expand their client base and enhance service offerings. As the digital economy evolves, staying ahead means adapting quickly — and leveraging the right tools not only simplifies your workflow but also sets you apart as a forward-thinking, strategic advisor in the accounting world.
