Whether you’ve just launched a new ecommerce business or you’ve reached a point where your growth has gained significant momentum, you might be thinking about how an accountant could help. You might also be wondering what specific services will benefit your business and in this article, we’re here to help answer your questions.
Before we dig into the core services you might wish to acquire from an accountant, let’s first explore why hiring a specialist ecommerce accountant will pay dividends when it comes to the day-to-day running and ongoing development of your business.
The benefits of hiring an ecommerce accountant
Here are just some of the reasons why your business would benefit from an accountant that specialises in the ecommerce industry:
• Granular knowledge of the ecommerce sector and its related financial regulations.
• A solid understanding of ecommerce selling platforms and how they work.
• Knowledge of the best bookkeeping and accounting tools for ecomm operations.
• Experience around how to make your business as tax-efficient and tax-compliant as possible.
For a more detailed deep dive into the benefits of working with a specialist chartered accountant, head to our guide on all things ecommerce accounting.
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Accounting
As the name suggests, the main service you can expect from an accountant is the accounting responsibilities for your business. This includes keeping your business fully compliant with HMRC and Companies House, as well as becoming an authorised representative on your behalf in front of tax bodies. It also involves reporting, forecasting and strategising around your finances to support growth, as well as the preparation and submission of annual tax returns.
As part of our ecommerce accountancy services, we also offer discounts on cloud accounting software. This means you get affordable access to cloud-based tools that enable you to access your financial information from anywhere in the world with an internet connection. We work with A2X, Link My Books, Xero, Freeagent, Quickbooks, Sage Accounting, just to name a few.
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We have even created our own ecommerce software, EcomLedger, for us to connect into your marketplaces, so you do not have to waste time downloading reports.
Bookkeeping
In order to be able to complete accounting tasks, an accountant will need access to financial information and transactional data. This information needs to be accurate and up to date, which is where bookkeeping comes in to manage things like invoicing, account reconciliation, payroll and balance sheets.
Although you are able to take on the responsibility of bookkeeping for yourself, some accountants will offer this as an additional service to take the load off of you.
What is the difference between bookkeeping and accounting?
It’s worth noting here, for those that aren’t sure, that bookkeeping and accounting are not the same thing.
Despite being inextricably linked, bookkeeping and accounting are actually two different stages within the same overall process – both relating to the finances of a business. They must be treated as separate entities in order to optimise the potential and performance of both.
Bookkeeping is essentially the precursor to accounting. It’s a more administrative process that involves the compilation and recording of financial information and transactional data. Accounting then takes this data and information to use in a more subjective and analytical way to gather insights and recommendations.
While accountants often offer bookkeeping as part of their services, we wouldn’t recommend seeking accounting advice from a bookkeeper. Accountants have a specialist skillset that not all bookkeeping professionals will be able to fulfil.
VAT
VAT can be one of the most complicated facets of business ownership to navigate, which is why it pays to enlist the help of a specialist ecommerce accountant.
UK businesses are required to register for VAT once their annual VAT taxable turnover has reached the legal threshold, which is currently set at £85,000. So if your business is reaching that point and you still haven’t hired an accountant, now would be a great time.
Your Ecommerce Accountant can help get you set up and registered, as well as ensuring you’re choosing the right scheme for your business. After registration, we can make sure you stay VAT-compliant, as well as:
• Preparing MTD (Making Tax Digital) VAT filings
• Preparing and submitting quarterly VAT Returns
• VAT expenses and claims
• Reclaim £1000s on historical Amazon fees
• Monitoring VAT thresholds
• Offering guidance around selling goods to the EU including distance selling VAT
• Sharing advice on VAT strategy for ecommerce sellers specifically
Take a look at this post: Top 8 Making Tax Digital for VAT Software Solutions
Self Assessment
If there are any Directors or Individuals related to the business that are required to file an annual Self Assessment Return, an accountant will be able to take care of that for you too. They will ensure that you don’t miss any important filing deadlines and that you are on track to pay your Income Tax on time. This will help you avoid any hefty penalties from HMRC.
Virtual office / Registered Office
The nature of online ecommerce businesses means that they don’t often have a physical location attached to their operations. Normally, in this case, the business owner will use their own personal address to register the business. However, this can raise security concerns when it comes to sharing the business address in the public domain on things like communications and product packaging.
Ecommerce accountants, such as ourselves, will offer a virtual office or registered office service to mitigate any of these security concerns. This enables you to have a registered business address that you don’t mind sharing with the world, whilst keeping your own personal address private.
Our virtual office services means you can use our address on Companies House and other business correspondence for a low-cost, fixed monthly fee.
Get in touch with one of our UK-based, chartered accountants to learn more about how we can help your ecommerce business grow.
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