Many owners find themselves overwhelmed after realizing their financial tasks and duties grow as their business grows. With the growth of your online store comes a new set of responsibilities you may not be prepared to handle on your own.
E-commerce accounting is integral in any growing company’s success: it can help you track sales performance by recording cloud accounting weekly and reveal what products sell best where. It helps identify trends that might affect profit margins and provide insight into seasonal purchases (for example, if winter clothes have been selling well this year). Most importantly, eCommerce accounting gives businesses access to information about costs such as shipping fees.
However, there are some critical drawbacks to outsourcing eCommerce accounting businesses should consider. This article examines both the pros and cons of eCommerce accounting and can serve as a guide for any business owner struggling to adapt to their increasing financial bookkeeping demands.
Pros to eCommerce Accounting – Focus on Your Core Business.
It’s challenging to scale your internal operations as your business grows. This process makes outsourced accountants more appealing. Outsourcing your eCommerce accounting allows you to focus on the core aspects of your company, contributing to growth.
For example, if you hire a full-time bookkeeper, you have to focus on onboarding, salary negotiations, interviewing the candidate, etc. You might also have to consider expanding your office and equipment expenses such as computers and software. Outsourcing your accountants helps you avoid these mounting costs.
Pros to eCommerce Accounting – Reliable, Responsible Support
When you expand your business, maintaining your customer service is a problem area. However, with outsourced accounting, you never have to worry about declining performance or your company being stretched too thin. Fractionalized CFOs have experience in multiple fields and can deliver reliable, responsible support around the clock. These professionals also have more robust teams keeping track of their performance.
If you hire a full-time accountant, who’s there to ensure they provide the level of support your company embodies? You will most likely be too busy trying to adapt to your business’s scaling needs and won’t be able to keep a close eye on your full-time accountant. Outsourcing your accounting department ensures someone holds your accountant accountable 24/7.
Pros to eCommerce Accounting – Proactive Issue Resolution
You don’t have to worry about accounting blunders when you use reputable outsourced accounting firms. These professionals spot red flags ahead of time and notify you about cash flow problems and expenditure deficits that can be difficult to track without the right professionals or software.
You didn’t get into business to comb through your books like Scrooge. Outsourced accounting gives you access to professionals who take those issues off your hands.
Pros to eCommerce Accounting – E-commerce Accounting Eliminates Physical Stores and allows Businesses to Expand Their Customer Base
eCommerce sites offer a distinct advantage to both consumers and business owners. They eliminate the need for physical stores, improve the business’s bottom line, and increase the convenience of purchasing for consumers.
However, the more in-house employees you have, the more space you have to lease. Outsourced accountants mean you can keep the majority of your eCommerce business where it belongs: online and in the cloud.
Cons to eCommerce Accounting – Communication Limitations
There’s something to be said about having an in-house team. The communication benefits of having everyone on-site are the most common reason why business owners continually choose in-house accounting teams over outsourced accounting teams.
If you fail to establish a close connection with your outsourced accounting team, communication issues will likely plague the relationship long-term. When you consult your outsourced accountant options, discuss with vendors how they plan on keeping ties with your business.
You should also place a premium on whether your communication styles mesh. If they don’t, you should consider keeping your accounting team in-house.
Cons to eCommerce Accounting – Hidden Costs
With an in-house accountant, you control everything- their salary, the hours they work, etc. With an outsourced accounting team, you might have to worry about hidden fees and costs. You also can’t assume your accounting provider will take care of everything associated with your financials.
Some firms charge extra depending on the tasks you want completed. They might also charge extra for specific software. When choosing your outsourced accounting firm, consider how the onboarding process. Settle on the costs upfront, and you won’t run into this issue.
Cons to eCommerce Accounting – Lack of Control
Your financial reporting offers invaluable insight into how your business’s efficiency and growth. After handling everything in-house, giving all of the responsibility over to an outside organization can be daunting. After all, it’s your baby, and how will an outside organization understand your needs.
You might be concerned about putting your financial analysis into the hands of an outside source. To avoid this stress, maintain transparency with your outsourced accounting firm from the start. You should never feel like your outsourced accounting service keeps you in the dark. They should apprise you about all the pertinent data that makes you feel informed while relaxed. They bring actionable insights to the table you don’t identify, but they do so in a manner that always makes you feel like you’re aware of everything.
Conclusion – The Pros and Cons of Outsourced eCommerce Accounting
Outsourcing your eCommerce accounting procedures is a double-edged sword. On the one hand, outsourcing your accounting gives you access to fractionalized professionals who have seen it all and have experience managing multiple accounts. On the other hand, you sacrifice some of the in-person communication you achieve by getting an in-house team.
The kicker in favor of outsourcing your eCommerce accounting is scalability and profitability. You don’t have to worry about hiring and onboarding employees, and you can focus on your core business vitals.