Hey, it's Patti Scharf, CPA and Co-Founder of Catching Clouds, the leader in
ecommerce accounting, and today we're going to talk about how to find an
ecommerce accountant for your online store. And watch until the end because
I'm going to give away a free download to, "16 Questions that You Should Ask When
Looking for an Ecommerce Accountant. Alright, let's get started. Before you
look for an accountant, you need to know what kind of need you're trying to fill,
and you're going to have different needs at different stages of your business. So
let's get started with stage number one. All right, stage number one is what I
would consider kind of a startup phase. You're making somewhere between
nothing and maybe $20,000 a month in revenue, and you're usually selling on
maybe one channel like Amazon FBA. Usually people in this stage are selling
kind of on the side. Maybe they have a full-time job, and they want to fire
their boss, so they want this other business to replace their income. In
this stage of the game, you're really trying to figure out what kind of
legal formation you should have, whether you should be an LLC or maybe an S
corporation. Something like that. You want to know what are business expenses that
are deductible. You really want to know the logistics of knowing how much
you made overall and how that's going to impact you financially. So at this stage
of the game, you want to get a tax Certified Public Accountant. You want a
CPA who focuses on taxes who can tell you all the ins and outs of starting a
business and what you need to know. If you cannot afford a bookkeeper at this
stage, I wouldn't panic. That's okay. You can check out our
courses, Accounting for Amazon and Accounting for Shopify. I've got links
below about those. If you can afford a bookkeeper, all the better. I would check
one out, and I would follow all the tips that we have for stage two of your
business - coming up next. Alright, stage number two is when you are
making somewhere between $20,000 and $50,000 a month. When you move on to
stage 2, you are probably in a position where you've quit your job. This is your
full-time gig. All of your attention is on this. You might even have a few people
who are working for you, so you've got employees, and you're really concerned
about cash flow because you are all-in, baby. Like this is your deal. You've
got to make this work, so you're really concerned about cash flow. You might have
been doing your own books and now you're starting to feel like you're kind of
losing grip on it. Maybe you're too busy doing other things and it's gone by the
wayside, and you really need to get control over your financials. Another
problem is because you're so tight on cash flow, you might need to take out a
loan or something from the bank, and the bank is requiring you to get financials,
so you need a real bookkeeper at this point to help you out.
The good news is that there are a lot of accountants who are starting to
specialize in ecommerce. The bad news is there are a lot of accountants who are
*starting* to specialize in ecommerce. A lot of them don't quite know all the
ins and outs. If you are finding that your accounting is being done where
you're pulling in all of your sales transaction by transaction, that should
be a red flag to you that you are not doing things the right way. I would be
really careful about that. You might want to check out the courses that I talked
about before, the links are down below in the description, or have your accountants
check them out just to make sure that you're on the right path, because you
don't want to get too much further down the road and then have to unravel the
huge mess that's being created by having individual transactions pulling into
your system. Another thing I would keep in mind is that a lot of the accountants
who are serving this particular size business - they only focus on Amazon
and Shopify. They probably don't go much beyond that, and if you ask them to do
more, it may be really challenging for them. You can easily outgrow somebody
who is working at this level, so just keep that in mind. If you see packages
that they're offering packages that are kind of small, and they give you three
tiered solutions, they're probably doing a very specific service where they're
giving you some kind of cleanup at the end of each month but you're really
doing all the heavy lifting throughout the month.
Sometimes it works out great for people; sometimes other people are like, "Heck I
could do that myself." So just keep in mind what it is you're getting. Ask the
questions that we have at the end of this video, and just go into everything
with your eyes wide open. Alright, so that brings us to stage
number three which is really $50,000 per month and up - I
would say going up to tens of millions of dollars. You can still do small
business accounting using systems like QuickBooks Online and Xero up into the
tens of millions of dollars. If you get up to a hundred million, you're
gonna want to go check out something like NetSuite, and then you'll want to
look for an accountant that specializes in NetSuite. But anything in that
just million to tens of millions range - you can still look for an ecommerce
accountant who's going to keep you on a smallish system. The companies who are in
this stage of the game, they're usually selling on multiple channels - so three or
more. I think we've had up to sixteen on in our service and there are lots of
moving parts. I would consider the the companies at this stage as
established sellers, so they've been doing this for a while. They know
what they need to know, and they're asking more sophisticated questions like
how much are they making per channel, what's their highest
selling item, the SKU that's selling the most and the fastest, and how
much profit are they making on each of those. When you get to this stage of
the game, a lot of accountants have really struggled to help you because
it's so much work just to get the information out of the different systems
and scrub it up so it's useful and so that you can reconcile it in the
accounting system. So if you have a more sophisticated business, you're going to
need somebody who specializes in ecommerce accounting for sure. And
you're definitely going to want to ask the questions that we have in the list at
the end of this video because they become really, really important at this
stage of the game. You're gonna really need a firm because you're going to need
more than a bookkeeper, more than a controller, more than a cloud
integrator. You're going to need somebody who can do all of those different things,
and that's really hard to find in a single person. You need a group of people
who can help you out with that, and of course, you're not going to want to hire
three individual people to handle that work for you as an employee, It's best to
just go with a firm that can handle the different components and deliver a full
service for you. All right, so now you know what kind of accountant to be
looking out for at each different stage of your business,
but do you know the exact questions that you want to ask? If not, no problem.
Look down below in the description.We've got a link to our download, "16 Questions
to Ask When Looking for an Ecommerce Accountant" that will give you both
questions and answers that you should be looking for when you are interviewing
your accountants. So go check that out. If you like this video, hit the like button,
share it with your friends, and be sure to subscribe.
Catch you later.