Outsourcing Bookkeeping Services in USA: Is it the Right Decision for Ecommerce Businesses?

The Importance of Ecommerce Business Bookkeeping

Ecommerce businesses spend heavily on customer acquisition and marketing efforts to drive sales and establish a flourishing clientele. If this spending isn’t regulated with effective budgeting and diligent expense tracking, expenses are bound to exceed earnings. Cash flow mismanagement lies at the heart of ecommerce failure – a threat that can be averted by investing in professional bookkeeping services in USA.

At (Insert name), we have helped innumerable ecommerce entrepreneurs who attempted to take the DIY excel route to avoid paying for business bookkeeping services. Relying on spreadsheets or even accounting software isn’t enough unless you possess the financial acumen and savviness of a seasoned bookkeeper.

Common Ecommerce Bookkeeping Errors

In our experience serving the ecommerce sector, we’ve noticed some common errors that can lead to serious financial setbacks.

Let’s take a look at these mistakes and their implications:

• Neglecting accrual accounting and focusing more on cash accounting – a simple choice that reduces financial reporting tasks but leads to inaccuracies and distorted financial reporting. Rapidly growing ecommerce brands that rely on cash accounting struggle with transparency and misleading financial data.
• Using manual databases and excel spreadsheets leads to inaccuracies as tech-savvy software and management tools actively weed out errors and highlight discrepancies.
• Underestimating the importance of a detailed and tailored chart of accounts with multiple categories leads to inaccurate financial reports.
• Overestimating profits, inventory and cash flows due to lack of clarity over fees of third-party platforms like Amazon and eBay.
• Failing to manage and track inventory leads to inaccurate valuations and overstated profits.
• Omitting recurring expenses like custom duties, shipping costs and returns leads to overstated profits and undervalued stock.
• Chaotic bookkeeping processes and failing to update financial reports regularly sets the stage for systematic and eventual financial ruin. Ecommerce brands that neglect business bookkeeping struggle with financial setbacks and legal penalties.

Before we dive deeper into the perils of neglecting business bookkeeping, let’s explore the ecommerce solutions offered by bookkeeping services in USA.

What is Full Service Bookkeeping for Ecommerce?

Ecommerce business bookkeeping processes tend to be much more complex than managing the finances of a brick-and-mortar store as multiple legislative and technical elements come into play. Ecommerce brands must diligently track all transactions with accurate records of expenses, sales and receipts, alongside maintaining transparency over their cost of goods sold, marketing expenses, payroll and operational costs.

It’s common for ecommerce entrepreneurs to rely on QuickBooks and Xero – a major culprit behind financial setbacks because these tools aren’t equipped to handle the financial complexities of the ecommerce sector. Engaging professional bookkeeping services in USA allows ecommerce entrepreneurs to make well-informed decisions supported by financial data and accurate projections.

Professional bookkeeping services ensure ecommerce businesses operate with an accurate and regularly updated chart of accounts (COA), providing clarity and transparency on every single business transaction.

Let’s take a closer look at the services to understand what is included in bookkeeping services for ecommerce businesses.

Expense Management

Business bookkeeping services involve diligent expense tracking and management to ensure every cost is accurately recorded in the right category. These expenses include marketing costs, inventory costs, and operational expenses among others.

Inventory Tracking

Ecommerce businesses must actively track their inventory with detailed accounts on cost of goods sold (COGS) to regulate inventory expenses. Seasoned business bookkeeping experts help busy entrepreneurs understand cost implications by providing accurate and detailed inventory records.

Monitoring Revenue & Sales

It’s common for ecommerce startups to struggle with categorizing revenues and sales growth in a detailed chart of accounts, resulting in confusion over sales growth and profitability. Professional bookkeeping services in USA provided tailored chart of accounts to reflect the ecommerce brand’s unique operations, such as monitoring sales through Amazon and Shopify. These financial documents are instrumental in forecasting and performance analyses.

Financial Planning & Reporting

All businesses must maintain monthly and quarterly financial reports, primarily balance sheets, profit and loss (P&L) statements, cash flow statements and inventory sheets, to ensure transparency and support well-informed future planning. Tailored bookkeeping services allow ecommerce entrepreneurs to gain valuable and actionable insights into cost reduction, boosting profitability, sales growth and utilizing key financial metrics to support sustainable growth.

Ensuring Legal Compliance

Ensuring legal compliance is considerably simpler for brick-and-mortar stores operating in one location, ecommerce brands must comply with the laws of various states. Ecommerce entrepreneurs deal with highly complex taxation climates as they are subject to tax laws from various states and regions. Online brands selling nationwide or region-wide must engage professional bookkeeping services in USA to simply tax management and ensure legal compliance.

Engaging reliable business bookkeeping services is more than hiring an accountant; it’s a crucial investment to support sustainable growth by setting solid financial foundations and building economic resilience.

The Advantages of Outsourcing Bookkeeping Services in USA

Outsourcing accounting and bookkeeping services in USA allow ecommerce entrepreneurs to focus on core initiatives like brand development, product enhancement and growth. Ecommerce brands that neglect financial planning and cost reduction struggle to survive in today’s fast-paced digital ecosystem.

Engaging competent bookkeeping services in USA allows ecommerce brands to grow and develop economic resilience with complete control over their financial performance and key performance metrics.

Let’s examine the advantages of outsourcing business bookkeeping services in more detail.

Strategic Cost Reduction

Ecommerce brands can save thousands of dollars by engaging bookkeeping services in USA as seasoned professionals are well-equipped to support strategic cost reduction. Most entrepreneurs don’t outsource bookkeeping services to reduce expenses only to spend much more on hiring in-house accountants or taking the DIY route.

Instead of setting up an in-house finance department, outsourcing bookkeeping services allows brands to dedicate more funds towards core business goals. Ecommerce brands that outsource bookkeeping and administrative roles can spend more on training, product development and marketing efforts.

Saving Time & Creative Energies

Most ecommerce brands are a labour of love, initiated by creative minds focused more on the products their selling as opposed to financial and legal complexities. Financial management, a crucial aspect of business survival, is often overlooked and neglected as ecommerce brands focus more on advertising and scaling.

Outsourcing accounting and bookkeeping services in USA allows entrepreneurs and senior managers to save time and creative energies from mundane and repetitive administrative chores. Instead, entrepreneurs can channel their creative energies towards refining value propositions and enticing their audience with exciting advertising initiatives.

Professional Support & Financial Guidance

Majority of ecommerce businesses do not afford to recruit seasoned accountants and financial experts, resulting in a lack of financial oversight necessary to navigate economic complexities. Hiring an entry-level accountant to track expenses and file taxes doesn’t uplift businesses with financial savviness and data-driven projections.

Working with bookkeeping firms in USA empowers ecommerce businesses with a wide host of advantages stemming from the guidance of seasoned financial experts. Professional bookkeeping services in USA typically operate with tailored solutions designed to satisfy the unique and complex financial needs of an ecommerce brand.

Each brand operating in the ecommerce space is unique in terms of its product portfolio, target audience, geographic operations, legal compliance requirements, inventory needs and payroll processes. It’s important to work with competent bookkeeping companies in USA offering a wealth of experience in complying with the SOPs and legal requirements of the ecommerce sector.

Instead of training an in-house accountant, engaging business bookkeeping services allows ecommerce brands to benefit from the financial expertise of seasoned professionals. Entrepreneurs can rely on expert consultant to handle financial setbacks, economic upheaval and taxation complexities.

Embrace Advanced Financial Practices & Tools

Outsourcing accounting and bookkeeping services in USA offer the advantage of gaining access to advanced financial reporting tools and seasoned accounting expertise. Ecommerce entrepreneurs can enlist the support of professionals well-versed in recent industry trends with access to the latest accounting technologies.

Professionals providing ecommerce bookkeeping services in USA must readily embrace technological advancements and stay abreast with changes in the regulatory environment of different states and regions. Having a team of seasoned professionals at your disposal will free up various resources, eliminating the stress of being involved in administrative and financial tasks.

Entrepreneurs no longer have to keep track of legal changes in tax reporting processes or worry about monitoring third-party platform expenses.

Transparency with Easy Access to Financial Records

The most significant advantage of outsourcing accounting services for small business is indeed the ease of accessing financial records and utilizing data-driven insights in executive decision making. Most ecommerce entrepreneurs are unable to utilize the full potential of their financial data in day-to-day decision-making and growth-centric plans.

Outsourcing accounting and bookkeeping services in USA allows entrepreneurs access to accurate and transparent financial data with regular analyses to support various business goals. Most bookkeeping firms in USA go beyond simple bookkeeping, equipping ecommerce brands with analytical resources to reduce costs and drive efficiency.

Financial forecasts, sales reviews, cost analyses and inventory reports help ecommerce brands make strategic decisions with predictability analyses to support profitable outcomes.

Easy Taxation Handling & Preparation

Ecommerce entrepreneurs dread taxation handling because their dealing with a highly complex web of taxation laws, depending on the states and regions chosen for their operations. Enlisting the support of bookkeeping companies in USA is crucial to ensure accurate tax handling and compliance with all taxation laws applicable.

Failure to accurately handle taxation matters can lead to various legal and financial complications, threatening the survival of an ecommerce brand. Ecommerce entrepreneurs are strongly advised to entrust taxation matters to the capable hands of seasoned bookkeepers well-versed in legal matters. These professionals help brands avoid penalties and take advantage of tax exemptions to reduce their yearly tax bills.

Steering Clear of Financial Fraud & Misconduct

Entrepreneurs who venture into the ecommerce space with little or no corporate experience of managing a legally registered company often fall prey to fraudulent practices and misconduct. The ecommerce space facilitates entrepreneurship by providing digital infrastructure, but it doesn’t eliminate the regulatory environment where entrepreneurs must comply with local and international laws.

In fact, ecommerce businesses must comply with more legal complexities and overlapping state laws compared to brick-and-mortar stores. Without the guidance of a seasoned expert, entrepreneurs struggle to comply with stringent laws and unknowingly engage in financial misconduct.

Many ecommerce entrepreneurs fall prey to financial fraud while seeking simpler ways to handle taxation and prepare financial reports. Outsourcing bookkeeping services in USA eliminates the risk of unknowingly committing fraud or falling prey to a fraudulent financial service provider.

Bookkeeping firms in USA typically equip their clients with legal and tech-savvy protections to safeguard ecommerce brands and their customers from fraudulent practices.

Driving Growth with Efficiency

Enlisting professional support with outsourced bookkeeping services in USA allows ecommerce brands to grow with enhanced efficiency. Small businesses struggle to manage the costs associated with in-house accounting departments, employee training, absenteeism and turnovers. In contrast, outsourcing to bookkeeping firms eliminates the complexities of payroll management while enriching the company with experienced financial talent.

When you have a team of professionals managing everything, from tracking expenses and sales to managing inventory and costs of goods sold, all processes are bound to be highly efficient and streamlined. Entrepreneurs can focus more ecommerce resources on product enhancement and ensuring timely deliveries to strengthen customer loyalty and acquire new customers.

Supporting Data-Driven Decision Making

Bookkeeping is more than just recording transactions and preparing ledgers; it lies at the heart of accurate financial reporting to gain data-driven insights into a brand’s performance. Ecommerce entrepreneurs fail to track a massive number of costs that impact sales but aren’t directly linked to their websites.

Engaging bookkeeping services in USA is instrumental in supporting business decision-making and ensuring accuracy and transparency. Seasoned professionals serving across bookkeeping firms in USA provide data-driven insights and predictive analyses to support executive decisions, like tapping into a new market, increasing advertising spending, adding more products or providing free shipping.

These insights are crucial in ensuring executive decisions are made in the light of key performance metrics and financial analyses to support sustainable growth.

Final Thoughts

Outsourcing accounting and bookkeeping services in USA is a transformative decision that empowers ecommerce entrepreneurs with a wide host of resources to achieve sustainable growth and profitability. Financial management is a widely neglected aspect of ecommerce businesses, and bookkeeping firms in USA provide tailored solutions to overcome financial loopholes and ensure legal compliance.

As the ecommerce ecosystem becomes more and more complex, entrepreneurs venturing out in this realm are overwhelmed by the legal and financial complexities involved in setting up an online store. Instead of taking the DIY route, we actively encourage entrepreneurs to empower their brand with professional business bookkeeping services.

At Transcounts, we provide customized solutions to help ecommerce brands map out their financial trajectories and set SMART goals to scale new heights.

Get in touch with our team today to learn more!

 

Frequently Asked Questions (FAQs)

If you’d like to request a quote for our tailored ecommerce bookkeeping solutions, get in touch with our team today.