Do you sell products through multiple online channels? This can be a powerful way to grow an e-commerce company. A brand may sell through Amazon, Shopify, Walmart, or Etsy. It can even sell from its own website. It can also try social commerce platforms & other marketplaces. Multiple sales channels can increase revenue opportunities. But they also make financial management considerably more intricate.
Each platform may have different payment schedules. They can have different marketplace fees & refunds. Even their shipping costs, inventory requirements, & reporting systems can differ. So, an organized accounting and bookkeeping process becomes very important. Otherwise, business owners can struggle. They won’t be able to understand their actual revenue. Neither will they have any idea about their expenses, cash flow, inventory position, & profitability.
E-commerce accounting is not only about only recording sales. This is mainly true for multi-channel sellers across the USA. It involves bringing financial information from multiple platforms together. This is then put into a precise & useful monetary picture.
What Is Multi-Channel E-Commerce Accounting?
Multi-channel e-commerce accounting is a process of managing financial information. This way, people can also consolidate & study financial information. And these are produced across multiple sales channels.
For example, an online business may get orders using-
- Amazon
- Shopify
- Walmart
- Etsy
- Its own site
- Social commerce platforms
- Wholesale channels
Each platform generates financial data differently. A strong accounting system brings these transactions together. Meanwhile, this can properly account for marketplace fees & payment processing charges. This will also handle refunds, inventory, shipping, advertising costs, etc.
Are your businesses operating throughout the USA? Then, a centralized approach can make it easier to understand complete financial performance. Hence, company owners can make correct company choices.
Why Is Accounting More Complicated for Multi-Channel Sellers?
A single-channel business may have relatively straightforward financial reporting. Multi-channel sellers face several extra layers of complication.
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Multiple Revenue Streams
Sales may come from several marketplaces. This can happen at different times. Also, this may happen under different payment methods. Simply adding deposits to a bank account may not provide a precise picture of full sales.
Accounting systems need to distinguish gross sales & refunds. These also must differentiate between marketplace fees, payment handling charges, & net deposits.
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Marketplace and Payment Processing Fees
Amazon, Shopify, Walmart, and payment processors can charge various fees. These costs need to be properly categorized. Thus, business owners can know how much profit is being retained.
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Inventory and COGS
Inventory accounting is an important area for an e-commerce firm.
A seller needs to know-
- Inventory bought
- Sold Inventory
- Cost of goods sold (COGS)
- Storage prices
- Shipping & fulfillment costs
- Inventory modifications
- Returns
- Unsold stuff
Accurate COGS reporting is essential. This helps determine product-level & complete profitability.
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Sales Tax Across States
Multi-channel sellers may have clients in multiple states. Sales tax obligations can become complicated. But this will depend on the business’s activities & applicable state rules,
Economic nexus rules can create additional compliance requirements. Sellers should evaluate their sales activity & circumstances carefully. Then, they can work with qualified tax professionals while deciding on their obligations.
What Should Multi-Channel Sellers Track?
A comprehensive accounting system should provide visibility into more than total sales.
Important financial metrics can include-
- Revenue: Sales in all channels.
- Net Revenue: Profit after refunds, discounts, & other adjustments.
- COGS: The cost linked with sold items.
- Gross Profit: Profit remaining after C.O.G.S.
- Operating Expenses: These are costs like advertising, software, payroll, professional services, & fulfillment.
- Marketplace Fees: Fees charged by platforms & payment processors.
- Inventory: The value & quantity of products presently held.
- Cash Flow: Money coming into & going out of the firm.
- Profit Margin: How much profit remains as profit after all expenses.
- Channel Profitability: How profitable each individual marketplace or sales channel is.
These numbers can help owners very much. They can determine which products & channels are actually doing well for the business.
Why Accurate E-Commerce Bookkeeping Matters
Bookkeeping is the base for trustworthy economic reporting & tax preparation.
Are you a multi-channel seller? Then, professional bookkeeping may involve transaction classification & expense tracking. There can be accounts payable, accounts receivable, & reconciliations. Companies may also benefit from payroll integrations, inventory details, and per-month economic close processes.
Berg Advisors provides e-commerce bookkeeping support for companies. Such companies use Amazon, Shopify, and Walmart. Their payment processors may include Stripe & PayPal. Its bookkeeping services help businesses. They can uphold accurate records. Also, they can get useful financial reporting.
Companies must make sure that bookkeeping isn’t inaccurate or delayed. Business owners may make decisions according to imperfect information. That can affect purchasing & advertising budgets. This can also help with inventory supervision, hiring, development, & tax planning.
E-Commerce Accounting and Tax Planning Go Hand in Hand
Accounting & tax planning are not separate activities.
Accurate financial records can help an e-commerce business prepare for tax filing and identify areas that require attention throughout the year. Multi-channel businesses may also need to consider sales tax compliance, deductions, income reporting, inventory, and other tax-related matters.
Berg Advisors provides nationwide e-commerce tax services. These comprise sales tax compliance & tax planning. There can also be multi-channel sales tax reporting & tax preparation.
Tax rules and obligations can vary. But this hinges on the business’s circumstances & the states in which it operates. Thus, sellers should obtain professional advice. They must not depend on generic online details.
How Berg Advisors Supports Multi-Channel E-Commerce Businesses
Managing accounting internally can become increasingly difficult. This is mainly true if an e-commerce company adds products. Or it can hire more employees. It can also buy more inventory or spread into more geographic markets.
Berg Advisors provides nationwide accounting & bookkeeping. We also provide tax & advisory services for small businesses. These include multi-channel e-commerce companies. Our firm supports businesses selling through Amazon, Shopify, Walmart, Etsy, etc.
Our multi-channel e-commerce accounting services can include:
- Financial info implementation
- Daily transaction handling
- Expenditure monitoring
- Inventory & C.O.G.S. accounting
- Channel reconciliation
- Marketplace fee monitoring
- Per-month economic close
- Monetary statements
- KPI dashboards
- Cash-flow prediction
- Sales tax support
- Tax planning & preparation
- Advisory services
Our multi-channel accounting process involves discovery & system integration. Plus, we also combine data migration, each month’s close, reporting & ongoing support.
Our organization supports SKU-level reporting & inventory accounting. Hence, we can help e-commerce businesses gain better visibility into product profitability.
When Should a Multi-Channel Seller Hire an Accountant?
There is no single revenue threshold. So, there can’t be a fixed answer for when an e-commerce business should talk to an accountant. Still, professional accounting support can become very important when-
- You sell through different platforms.
- Your inventory is becoming hard to handle.
- You are not so sure about your true profit.
- Marketplace fees are impossible to reconcile.
- Your books are always behind.
- Your business works across many states.
- Sales tax compliance is becoming tough.
- You are all set for quick growth.
- You need optimum monetary reporting.
- You’re thinking about financing, acquisition, or development.
- You spend too much time managing financial records. You don’t use this to grow the firm.
As a business grows, having accurate financial information can help owners a lot. They can shift from tracking transactions. Then, they can go on to make strategic decisions. These are based on reliable data.
Final Thoughts
Multi-channel selling creates enormous opportunities. These help e-commerce businesses throughout the USA. But using multiple platforms for selling creates financial complexity. So, businesses may need accurate bookkeeping & inventory accounting. They can also look for COGS tracking & channel reconciliation. Plus, there can also be financial reporting & tax planning. These aspects help business owners very much. They can maintain a more optimal view of their firm’s economic health.
The right e-commerce accounting strategy from Berg Advisors can change data from multiple sales channels. This is sure to become actionable financial information. Do you want to spend less time managing numbers? Do you need more time growing your businesses? Then, working with an experienced accounting & advisory firm is highly advisable.
Ready to Get Your E-Commerce Finances on Track?
Connect with Berg Advisors to discuss your multi-channel e-commerce accounting, bookkeeping, advisory, and tax needs. Book a free consultation today.
FAQs
1. Do I Need an Accountant for My E-Commerce Business?
If you sell through multiple platforms, manage significant inventory, or struggle with reconciliations, cash flow, COGS, or tax requirements, an e-commerce accountant can help maintain accurate financial records and provide useful business insights.
2. What Does an E-Commerce Accountant Do?
An e-commerce accountant can help with bookkeeping, marketplace reconciliation, inventory and COGS accounting, financial reporting, cash-flow forecasting, tax planning, and other financial needs specific to online businesses.
3. How Much Does E-Commerce Accounting Cost?
The cost depends on factors such as sales volume, number of sales channels, transaction volume, inventory complexity, and the level of accounting support required. A professional consultation can help determine the right service for your business.
4. Can Berg Advisors Handle Accounting for Multiple E-Commerce Platforms?
Yes. Berg Advisors provides e-commerce accounting and bookkeeping support for businesses selling through platforms such as Amazon, Shopify, Walmart, Etsy, and their own websites. Services can be tailored to the business’s sales channels and financial needs.