ECOMMERCE ACCOUNTING BEST PRACTICES

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

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.

Ecommerce Accounting

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

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

Ecommerce Cloud Accounting Example Cloud Inventory Sales Tax

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

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

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

Sales Tax

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

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

Wrapping Up

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

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/

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

Q&A

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