Running an e-commerce business can be a lucrative and rewarding process, but it also is a real undertaking. As Elon Musk once said, “Being an entrepreneur is like eating glass and staring into the abyss of death.” Granted, he is usually sinking billions of dollars of his own money into ventures no one has ever done, but many business owners can relate—there is a lot of risk and anxiety in the entrepreneurial process. But risk is associated with great reward, and for good reason. If not taking risks got you places, then “Sitting in a Room” would be the next self-help best seller.
At AMZ Accountant we not only know the trials and tribulations of entrepreneurship through years of running successful e-commerce businesses, but we have turned it into a science that we want to share. In the meantime, here are five areas that every small e-commerce business needs to be prepared for:
Accounting is just adding and subtracting right? Well, not really. It’s why you can get advanced degrees in it. It’s complicated, time consuming, and requires an eye for details. Many people have enough skill to get started, but there are legalities and traps that only experience and training can really prepare you for. That’s why we offer comprehensive cloud bookkeeping services. Our team of CPA, e-commerce experts work with clients utilizing cloud bookkeeping to make sure that they are up to speed in real time anywhere. We keep our clients finances adjusted to reconcile bank statements, ensure accurate e-commerce accounting, costs of goods sold (COGS), and prepare monthly statements. That way, if you just happen to have recently moved to Belize, you can sip your smoothie and run your business from anywhere.
Tax preparation for an e-commerce small business isn’t quite the same as a 1040EZ or any other variation. It usually requires knowledge of LLC, corporate, or partnership tax preparation. Deductions are many, complicated and easy items to miss. Over 1.2 trillion dollars exist in deductions but billions are often missed out on. On top of this, operating out of a variety of states and shipping into a variety of states means tax incomes from those places and complicated filing across jurisdictions. State and federal tax code is a must know for effective bookkeeping. We offer comprehensive tax filing and accounting services to make sure that you are registered, legal, and up to date on any forms and taxes. In the event of an audit, we will even represent you and deal with the IRS for you.
NAVIGATING THE SALES TAX NEXUS
When operating in different states, different products require different taxes added to them and paid back to the state, at times under special filing categories—like alcohol. This is what many refer to as the (insert curse) Sales Tax Nexus. It can be a daunting and frustrating part of bookkeeping and taxes that can lead to painful audits and nightmares of litigation. We luckily have experienced and trained CPAs navigate that tangled mess for our clients. We even offer ongoing research on laws and products for tax saving and compliance.
ANALYTIC DECISION MAKING
When it comes to business there are a number of decisions where it pays to have a second opinion and the best path is hidden in the numbers. Though we’ve been through it all with our own e-commerce businesses, we specialize in taking your finances and bottom line and helping you plan your business and day to day operations for the best business structure, budgeting, and forecasting. That way you are informed, advised, and ready to take your business into new markets, hunker down during a downturn, and thrive throughout all of it.
We know that this is just the start—as you expand, we expand with you, and as Amazon goes global, you’ve got the option of following suit. Most e-commerce small businesses don’t even think about going global. It seems like a monumental undertaking that is years out or simply impossible. But with our analytic abilities and resources for international tax codes and regulations, it’s not only possible, but can give you real advantages to help your business survive and thrive. A diversified market for your products can both bring in more money and provide stability, so that if one market dips the other can keep you afloat.
Check out all of our services here to learn more! If you are looking to get your finances taken care of, or want to take your financial planning to the next level, contact AMZ Accountant, your and e-commerce experts.