What to look for when you’re choosing your e-commerce accountant
No matter what sector you work in, getting the right accountant can make the difference between a business that merely survives and one that thrives and grows.
New businesses based on an e-commerce model need more than what I call a “traditional” accountant, one who limits services to a comfort zone of bookkeeping and filing tax returns.
When you’re at the cutting edge of new trends and technology, you want a specialist e-commerce accountant who can accompany you on your journey, a combination of ex-officio financial and technical director and a business advisor who’s prepared to be honest with you.
Top seven questions you should ask your accountant
Both types of accountant – “traditional” and “e-commerce” can make the business compliant with HMRC regulations and is familiar with EC Sales, Intrastrat, payroll and pensions, filing accounts and bookkeeping, but the day is already foreseeable when computer programmes will do all these jobs.
What can’t be computerised is the knowledge and wisdom that comes from real business experience and human traits like curiosity, adaptability, acceptance of change, willingness to learn.
Therefore, if I were looking for the right accountant for my business, I’d ask the following questions of my candidates:
Do you understand me and my business?
Your accountant needs to understand your business and the sector you’re working in, to help you overcome common pitfalls and stay on course to meet your objectives. Traditional accountants won’t necessarily have much knowledge of how e-commerce works and won’t be able to advise you on how best to structure your business model (e.g. “made-to-order”, “consign-to-order”, buying stock wholesale to sell on). However, an e-commerce specialist can help you structure your business model to take advantage of the good times and cope with bad times: when cash flow is tight; when you’re under pressure to drop sales prices; when you’re making continuous losses.
Can you advise me on the right accounting software for my business?
An e-commerce accountant can help clients choose and optimise the right accounting system and ensure your financial data is streamlined, systemised and synergised. This saves time and money through efficiency gains.
Are you up to date on the latest e-commerce trends?
Your business needs to keep up with your competitors, if not ahead, so you want an accountant who offers up-to-date advice that allows you to stay proactive.
Will you produce timely and meaningful management accounts?
A traditional accountant produces good management accounts to highlight issues, but not all have the experience to advise why the numbers are what they are. An e-commerce accountant, in contrast, will advise on why your business may not be performing and what to do about it.
Can you help manage my cash flow?
Cash is still king and while a traditional accountant will produce a cash flow report to show how cash is being used, an e-commerce accountant will forecast cash flow and highlight potential problems and opportunities. In addition, they can advise on the optimum level of cash you need in the bank and how to utilise cash flow to earn early payment discounts from suppliers, increasing your gross profits. I’ve helped one client with a £10 million turnover to make monthly saving of £100k just by managing cash flow properly.
Do you track KPIs and benchmark?
Many accountants don’t have the capability to create and track bespoke Key Performance Indicators or carry out benchmarking, but for a modern e-commerce accountant this is a crucial skill. They will design, implement and track customised KPIs to keep you on track and benchmark your business against similar businesses and industry averages.
Can you build “what-if?” scenarios for my business?
A traditional accountant likes to deal with hard facts and the “here and now” but will be less capable of modelling possible future scenarios to support strategic decision making. An e-commerce accountant helps businesses to reach their business goals by using advanced analytical tools, including building “what-if” scenarios that model variables such as sales volume, sales price and per sales items.
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I founded Boost Accounting in 2016 to offers a range of business support levels to meet the needs of owner-managed businesses, including services, workshops and online courses. My team has more than 50 years’ combined experience in bookkeeping, Cloud accounting and giving business advice.
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