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

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

Transcript

1. ECOMMERCE ACCOUNTING BEST PRACTICES
2. Agenda • Ecommerce Accounting • Cloud Inventory • Sales Tax • Q&A
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.
4. Ecommerce Accounting
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
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
7. Ecommerce Cloud Accounting Example Cloud Inventory Sales Tax
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
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
10. Getting the accounting done • Do it yourself • Hire virtual assistant • Hire a bookkeeper • CPA? • Outsource to an ecommerce accounting department
11. Sales Tax
12. 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
13. 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
14. Wrapping Up
15. Where to get advice • Online – Forums, Facebook Groups • Mentors, Peers – Rapid Crush • Ecommerce CPA • Ecommerce CFO • Ecommerce Accountant • Consultants, Ecommerce outsourcing companies
16. 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/
17. 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
18. Q&A
19. 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 info@catchingclouds.net 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