Hey, it's Patti Scharf, CPA and Co-Founder
of Catching Clouds, the leader inecommerce accounting, and today we're
going to talk about how to find anecommerce accountant for your online
store. And watch until the end becauseI'm going to give away a free download
to, “16 Questions that You Should Ask WhenLooking for an Ecommerce Accountant.
Alright, let's get started. Before youlook 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. Solet's get started with stage number one.
All right, stage number one is what Iwould consider kind of a startup phase.
You're making somewhere betweennothing and maybe $20,000 a month in
revenue, and you're usually selling onmaybe one channel like Amazon FBA.
Usually people in this stage are sellingkind of on the side. Maybe they have a
full-time job, and they want to firetheir boss, so they want this other
business to replace their income. Inthis stage of the game, you're really
trying to figure out what kind oflegal formation you should have, whether
you should be an LLC or maybe an Scorporation. Something like that. You want to know what are business expenses thatare deductible. You really want to
know the logistics of knowing how muchyou made overall and how that's going to
impact you financially. So at this stageof the game, you want to get a tax
Certified Public Accountant. You want aCPA who focuses on taxes who can tell
you all the ins and outs of starting abusiness and what you need to know. If
you cannot afford a bookkeeper at thisstage, I wouldn't panic. That's okay. You can check out ourcourses, Accounting for Amazon and
Accounting for Shopify. I've got linksbelow about those. If you can afford a
bookkeeper, all the better. I would checkone out, and I would follow all the tips
that we have for stage two of yourbusiness – coming up next.
Alright, stage number two is when you aremaking somewhere between $20,000 and
$50,000 a month. When you move on tostage 2, you are probably in a position
where you've quit your job. This is yourfull-time gig. All of your attention is
on this. You might even have a few peoplewho are working for you, so you've got
employees, and you're really concernedabout cash flow because you are all-in,
baby. Like this is your deal. You'vegot to make this work, so you're really
concerned about cash flow. You might havebeen doing your own books and now you're starting to feel like you're kind oflosing grip on it. Maybe you're too busy
doing other things and it's gone by thewayside, and you really need to get
control over your financials. Anotherproblem is because you're so tight on
cash flow, you might need to take out aloan 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 tospecialize 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 theins and outs. If you are finding that
your accounting is being done whereyou're pulling in all of your sales
transaction by transaction, that shouldbe a red flag to you that you are not
doing things the right way. I would bereally careful about that. You might want
to check out the courses that I talkedabout before, the links are down below in
the description, or have your accountantscheck them out just to make sure that
you're on the right path, because youdon't want to get too much further down
the road and then have to unravel thehuge mess that's being created by having
individual transactions pulling intoyour system. Another thing I would keep
in mind is that a lot of the accountantswho are serving this particular size
business – they only focus on Amazonand Shopify. They probably don't go much
beyond that, and if you ask them to domore, it may be really challenging for
them. You can easily outgrow somebodywho is working at this level, so just
keep that in mind. If you see packagesthat they're offering packages that are
kind of small, and they give you threetiered solutions, they're probably doing
a very specific service where they'regiving you some kind of cleanup at the
end of each month but you're reallydoing all the heavy lifting throughout
the month.Sometimes it works out great for people;
sometimes other people are like, “Heck Icould do that myself.” So just keep in
mind what it is you're getting. Ask thequestions that we have at the end of
this video, and just go into everythingwith your eyes wide open.
Alright, so that brings us to stagenumber three which is really $50,000 per month and up – Iwould say going up to tens of millions
of dollars. You can still do smallbusiness accounting using systems like
QuickBooks Online and Xero up into thetens of millions of dollars. If you get
up to a hundred million, you'regonna want to go check out something
like NetSuite, and then you'll want tolook for an accountant that specializes
in NetSuite. But anything in thatjust million to tens of millions range –
you can still look for an ecommerceaccountant who's going to keep you on a
smallish system. The companies who are inthis stage of the game, they're usually
selling on multiple channels – so three ormore. I think we've had up to sixteen on
in our service and there are lots ofmoving parts. I would consider the
the companies at this stage asestablished sellers, so they've
been doing this for a while. They knowwhat they need to know, and they're
asking more sophisticated questions likehow much are they making per channel, what's their highestselling item, the SKU that's
selling the most and the fastest, and howmuch profit are they making on each of
those. When you get to this stage ofthe game, a lot of accountants have
really struggled to help you becauseit's so much work just to get the
information out of the different systemsand scrub it up so it's useful and so
that you can reconcile it in theaccounting system. So if you have a more
sophisticated business, you're going toneed somebody who specializes in
ecommerce accounting for sure. Andyou're definitely going to want to ask
the questions that we have in the list atthe end of this video because they
become really, really important at thisstage of the game. You're gonna really
need a firm because you're going to needmore than a bookkeeper, more than
a controller, more than a cloudintegrator. 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 peoplewho can help you out with that, and of
course, you're not going to want to hirethree individual people to handle that
work for you as an employee, It's best tojust go with a firm that can handle the
different components and deliver a fullservice for you. All right, so now you
know what kind of accountant to belooking 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 Questionsto Ask When Looking for an Ecommerce
Accountant” that will give you bothquestions and answers that you should be looking for when you are interviewingyour 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.
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