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Accounting basics you need to get to a $1M+ seller

Accounting basics you need to get to a $1M+ seller

This was a presentation by Scott Scharf at the Colorado eCommerce Meetup

Patrick Rauland

January 17, 2017
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  1. ECOMMERCE ACCOUNTING
    BEST PRACTICES

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  2. Agenda
    • Ecommerce Accounting
    • Cloud Inventory
    • Sales Tax
    • Q&A

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  3. Ecommerce Business Owners
    Benefits
    • Entrepreneur - Being your own boss
    • Work where you are
    • Own your destiny
    • Great community of like minded people
    and business owners
    • Dynamic market
    • Opportunity
    Challenges
    • Wearing many hats
    • Business Owner - accounting, finance,
    analysis, decision making
    • Product - selecting, purchasing, listing
    • Marketing - SEO, social media, e-mail
    marketing
    • Operations - inventory management,
    pick/pack/shipping, customer support,
    reviews, repricing, etc.

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  4. Ecommerce Accounting

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  5. Accounting Best Practices
    • Treat your business like a business
    • Accounting Basics
    • Income
    • Expenses
    • Liabilities (Sales tax, loans, credit cards)
    • Cost of Goods Sold / Inventory
    • Cash Flow – PO’s, Income, Burn Rate
    • Profitability
    • Keep your accounting up to date - minimum weekly

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  6. Accounting Process
    • Accounting Tasks
    • Cloud Accounting - General Ledger - Xero
    • Connect Bank Feeds
    • Record ALL expenses & income
    • Reconcile all accounts
    • Record Amazon Income (and all the fees properly) - A2Xaccounting.com
    • Document management
    • Best Practices
    • Record summary information (NOT EVERY Transaction)
    • Record COGS and Inventory Value Monthly
    • Record sales tax liability and payments

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  7. Ecommerce Cloud Accounting Example
    Cloud Inventory Sales Tax

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  8. Xero.com - Best in class - Cloud Accounting
    ● Beautiful Accounting Software
    ● Add On Marketplace
    ○ Cloud Inventory
    ○ Marketplace/Shopping Cart integrations
    ● Multi-Currency at the core
    ● Bank Feeds
    ● Great company, impacting the space and the world

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  9. Optimal Accounting Configuration
    Amazon FBA Only Seller
    Cloud Inventory - www.xero.com
    Amazon Integration - www.A2Xaccounting.com
    Cloud Inventory (Inventory Value, COGS)
    www.InventoryLab.com & www.forecast.ly
    Sales Tax - www.Taxify.co, www.TaxJar.com,
    www.TrustFile.com, www.VertexSMB.com
    PO – www.restockpro.com
    Multi-Channel Accounting Solution
    Cloud Accounting - www.xero.com
    Amazon Integration - www.A2Xaccounting.com
    Cloud Inventory (Inventory Value, COGS)
    www.InventoryLab.com & www.forecast.ly
    Cloud Inventory (multi-channel, PO, COGS,
    multi-warehouse inventory) -
    www.volocommerce.com, www.stitchlabs.com,
    www.skubana.com, www.dearsystems.com, etc.
    Sales Tax - www.Taxify.co, www.TaxJar.com,
    www.TrustFile.com, www.VertexSMB.com

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  10. Getting the accounting done
    • Do it yourself
    • Hire virtual assistant
    • Hire a bookkeeper
    • CPA?
    • Outsource to an ecommerce accounting department

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  11. Sales Tax Management
    • Critical for eCommerce businesses
    • Amazon FBA businesses can have Nexus in 17+ states
    • Integrates with your online channels (Amazon.com, Shopify, etc.)
    • Collects the data
    • Filing - Automatic or manual filing or Sales Tax System Partner

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  12. Sales Tax Tips
    • Risk Management Decision
    • Know where you have Nexus and when established
    www.wherestock.com – historical Amazon FBA nexus established date
    • Register, collect, file, & PAY
    • Import data - beginning of the month
    • Keep track of all logins and passwords (www.lastpass.com)
    • Review and respond to all sales tax notices (using SALT or STS partner)
    Big mistakes
    • Not configuring tax collection properly - all channels
    • Not reporting all taxes collected & paying

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  13. Where to get advice
    • Online – Forums, Facebook Groups
    • Mentors, Peers – Rapid Crush
    • Ecommerce CPA
    • Ecommerce CFO
    • Ecommerce Accountant
    • Consultants, Ecommerce outsourcing companies

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  14. Accounting Backoffice Solutions
    ● Select the best solutions to optimize your ecommerce business
    ● Payroll/Workers Comp - Gusto (ZenPayroll)
    ● Cloud HR - Zenefits, Gusto (future)
    ● Online Bill Payment – Bill.com
    ● Document Collection - Hubdoc
    ● Expense Management - Expensify
    ● Xero Add On Marketplace
    ○ https://www.xero.com/us/add-ons/

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  15. Resources
    Books and Forums
    • Financial Intelligence for Entrepreneurs
    • Profit First
    • EcommerceFuel.com Forums
    Webinars
    • Ecommerce Accounting Basics
    • Selecting a Cloud Inventory Solution
    Cloud Inventory Matrix
    Ecommerce & Sales Tax Checklists

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  16. Catching Clouds - Ecommerce Accountants
    Scott Scharf
    • Co-Founder of Catching Clouds
    • Ecommerce Consultant
    • Ecommerce Accounting Expert
    • Cloud Inventory Expert
    • Speaker & Blogger
    www.catchingclouds.net
    @catchingclouds
    [email protected]
    Catching Clouds
    • Outsourced Accounting Department for
    Ecommerce Businesses
    • Daily Bookkeeping
    • Monthly Virtual Controller Services
    • Detailed month end close
    • Financial review
    • Ecommerce Consulting
    • Cloud Accounting - www.xero.com
    • Cloud Inventory - Many
    • Sales Tax Management
    We Speak Ecommerce

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