Running an online store can be just as busy as operating a brick and mortar business. You may only interact virtually with customers, but there is still a tonne of labour that goes into production, shipping, accounting, and more. Doing it alone could make you dizzy.
One way to ease your burdens and avoid bookkeeping mistakes is by enlisting eCommerce bookkeeping help. Letting a virtual bookkeeper manage your income statements, cash flow statements, financial reports, and other money matters helps to free up time and eliminate stress. But who do you hire? Ask yourself these questions about any potential bookkeeper before you let them help you with your online business.
What to look for when hiring an eCommerce bookkeeper
Successful eCommerce businesses have a well-defined set of processes, including a bookkeeping system. Failing to set up reliable eCommerce bookkeeping steps could lead to cash flow chaos, payroll shortages, tax penalties, and other problems. A good bookkeeper helps to avoid these pitfalls. An inexperienced bookkeeper may not see them coming.
Ask these five questions of any eCommerce bookkeeper before you bring them into your team.
1. Do they know your industry?
General bookkeeping experience is an important quality for any eCommerce bookkeeper. But does your potential bookkeeper know your industry? Imagine you’re a painter with an eCommerce store. Someone who has a decade of experience helping with food-related eCommerce businesses may not be the right choice for you.
Your overhead costs, shipping needs, product price points, and tax deductions are very specific to your type of sales. Ideally you will find someone who has worked in your industry and understands how to offer meaningful insights.
2. Are they familiar with eCommerce cost of goods sold (COGS)?
eCommerce bookkeeping requires an understanding of eCommerce (COGS. The COGS for any store includes more than just materials and labour costs. Your total cost per unit also includes things like packaging costs, storage costs, heating/cooling costs, and anything else that it takes to get a unit out your (virtual) door and into customers’ hands.
A good eCommerce bookkeeper is also knowledgeable about online store inventory management. Do they have a plan for tracking units that may be kept in a warehouse or sent directly from the manufacturer? Brick and mortar stores can do an in-person manual count once a year. What does a potential bookkeeper suggest for your online store? Missing inventory and out-of-stock inventory are a major cause of lost sales for businesses each year.
3. Do they offer diverse services?
Your ideal eCommerce bookkeeping service can do more than enter numbers into a spreadsheet. Can the bookkeeper you’re about to hire provide meaningful financial reporting? You want a bookkeeper who can identify red flags and help you forecast your future. You want a bookkeeper who will be able to spot missing money and tell you where you are overspending. Ask a potential bookkeeper how they have successfully helped online stores improve their revenue in the past.
4. Do they know how to help you scale?
You may be a very small enterprise right now. But even if you never become a billion dollar business, you are likely to grow as you find more customers. eCommerce bookkeeping should be able to grow with you. The right bookkeeper for your eCommerce business should post summarised statements and keep your books clean so you scale at the right pace and know when you need more funding.
5. Do they know your accounting software?
Perhaps most importantly, can your bookkeeper adapt to your accounting software or suggest a better one? Modern bookkeeping and accounting processes require a person to be up to date with the most current versions of cloud-based accounting software. Your general ledger shouldn’t be in a binder!
Ask a potential bookkeeper which version of software they’re most familiar with. Remember that many small business accounting programs limit the number of clients, accounts, and employees you can use before you upgrade to a new software. Look for a bookkeeper who knows when you’re ready to upgrade and can help you transition seamlessly. Finding a bookkeeper to help with your online store is about more than finding the right payroll professional or tax accountant. Leverage a team of eCommerce experts to deliver reporting and insights, forecasting, advice, and help with expanding your business. At Visory, we will pair you with a team of remote bookkeepers who know the needs of eCommerce businesses. Contact us today to see if we can help.