Monthly Ecommerce Accounting Services
Good monthly ecommerce accounting should tell you what happened in your business while the information is still useful.
That sounds simple. However, ecommerce businesses have sales coming from multiple platforms, payment processor activity, inventory, marketplace fees, refunds and deposits that do not always match sales. If those pieces are not accounted for correctly, getting the financial statements completed faster does not make them more useful.
Our monthly ecommerce accounting services focus on producing financial information you can trust. We work with growing ecommerce businesses using Shopify, Amazon, eBay, Etsy and other platforms, along with QuickBooks Online and A2X.
What We Do Each Month
We start with the basics. Bank accounts and credit cards need to be reconciled. Shopify, Amazon and other platform activity needs to make sense. Payment processor balances and clearing accounts need to reconcile.
Then we look at the ecommerce-specific pieces.
We review sales, refunds, marketplace fees, payment processing fees and other activity to make sure they are recorded correctly. We also review inventory and cost of goods sold because those numbers have a direct effect on gross margin.
The goal is not simply to close the books. We want the financial statements to reflect what actually happened in the business.
Inventory and Cost of Goods Sold
Inventory is one of the biggest differences between ecommerce accounting and accounting for many service businesses.
You may pay a supplier months before the product is sold. Inventory may be sitting at your warehouse, Amazon, a 3PL or somewhere between your supplier and the United States.
We need to understand what inventory you own and what it actually costs.
That includes looking at inventory purchases, goods in transit and landed costs when they are significant. Getting these numbers right gives us a better cost of goods sold number and a gross margin you can actually use.
Shopify, Amazon, A2X and QuickBooks Online
Connecting Shopify or Amazon to QuickBooks Online does not automatically mean the accounting is correct.
We use A2X when it makes sense to summarize ecommerce activity and properly record sales, refunds, fees and other settlement activity in QuickBooks Online. We also reconcile the information back to the ecommerce platforms and bank deposits.
When something does not reconcile, we want to know why.
A clearing account that grows every month or a Shopify deposit that cannot be reconciled is usually telling us something is wrong. We would rather fix the problem now than discover it at year-end.
Monthly Financial Reporting
Once the accounting is complete, we produce financial statements that help you understand the business.
We want to know your sales, gross profit, operating expenses and profitability. Depending on the business, we may also look at results by sales channel or other information that helps management make decisions.
The reports should answer questions, not create more of them.
If sales increased 20%, did gross profit increase with them? Did advertising costs increase faster than sales? Are inventory purchases putting pressure on cash? Is one sales channel performing differently than another?
Those are much better conversations when we trust the accounting.
Accounting and Tax Should Work Together
Monthly accounting also gives our tax team better information throughout the year.
We do not want to wait until the tax return is being prepared to discover that inventory is wrong or that the business had a major change in profitability.
Accurate monthly financial statements allow us to estimate taxable income, plan for tax payments and identify issues while there is still time to address them.
That is one advantage of having your monthly accounting and tax work handled by the same CPA firm.
Monthly Ecommerce Accounting for Growing Businesses
Most of our ecommerce clients are growing owner-operated businesses. As sales increase, the accounting usually becomes more complicated.
At some point, keeping QuickBooks updated is no longer enough. You need an accounting process that ties together your sales platforms, payment processors, inventory and financial statements.
Our monthly ecommerce accounting services are designed to do that.
We want you to know what you sold, what it cost you, what you made and where your cash went. If the monthly accounting can answer those questions, it is doing its job.