If you’re like most e-commerce business owners, you dread bookkeeping. You probably have countless reasons why it’s last on your to-do list, from taking up too much time to being too complex.
However, neglecting your Shopify bookkeeping can have some serious repercussions, like overpaying on your taxes or receiving some unwelcome letters from the IRS.
Let’s outline five consequences of neglecting bookkeeping for Amazon businesses, and why hiring an Amazon accountant or Shopify accountant might be the solution.
#1: Uninformed Business Decisions
Running a business comes with decisions on a daily basis, from when to place that inventory order to determining when you should hire another employee. How can you know when you can spend money or when it’s time to limit spending? Without a clear picture of your current financial situation, it can be difficult to make informed decisions surrounding growth and cash flow.
With the right Amazon accounting services, you no longer have to make decisions based on how you think you are doing. Instead, you can have tangible information, backed by the financial data of your business on how you are actually doing. Access to your full financial picture is indispensable, which is why Shopify accounting is so important.
#2: More Financial Mistakes
Bookkeeping isn’t always easy. From bounced customer checks to personal expenses accidentally run through the business, you are bound to encounter complex situations. Pushing your bookkeeping off for months at a time increases your risk of these mistakes never being caught.
Your customers, vendors, and employees all rely on you to make accurate and timely payments. Without an up-to-date accounting system, you will have no insights on where to apply that customer payment or if your 1099 contractor was issued a year-end tax form.
Bookkeeping for Amazon businesses minimizes these financial mistakes, giving you the ability to create meaningful and positive relationships with everyone you do business with.
#3: Lost Money
Your goal in running an e-commerce business is probably not to lose money. However, this is a common situation that Shopify and Amazon sellers face without the proper bookkeeping controls.
An accountant for Amazon sellers ensures you maximize your tax savings and profitability. This is done by double-checking that all expenses are entered and that you are minimizing overspending.
Maybe you notice that a software subscription is unused and you can save $30 a month or that your customers frequently pay you late and you should be charging late fees. Whatever the case, the right Shopify accounting controls catch ways your business wastes money to improve your profitability.
#4: Non-Compliance with Agencies
E-commerce business owners constantly face compliance issues when neglecting bookkeeping, especially with Shopify state sales tax. Shopify accounting monitors your sales tax, outlining when a nexus is triggered so you can comply with every state.
Working with a Shopify accountant can help you answer, “Should I charge sales tax on Shopify” or “Does Shopify pay sales tax?” The right bookkeeping controls ensure you properly monitor sales levels to remit accurate taxes to each state.
Not to mention, compliance with the IRS is also important. Amazon and Shopify e-commerce sellers are subject to a variety of regulations. With bookkeeping records that are constantly neglected, you might miss issuing tax forms for contractors or forget to remit an estimated tax payment. Prioritizing bookkeeping reduces your risk of non-compliance.
#5: Stagnant Financial Growth
It’s no secret that the e-commerce industry is highly competitive. If a customer has to spend an hour on the phone while you track down bank statements to see if you received their payment, they probably aren’t going to be too happy.
Neglecting bookkeeping can lead to poor reviews, which limits your financial growth. Positive reviews are essential for the scalability of e-commerce businesses.
In addition, poor Amazon accounting controls can lead to missed business opportunities. Maybe your vendors offer an early payment discount, but it takes you weeks just to enter the invoice. You could be missing out on more money back in your pocket, which detracts from the financial health of your business.
Summary
Does it sound like you need a Shopify accountant? How about some help managing your Amazon accounting services? Regardless of your business size, it’s important that you prioritize the bookkeeping of your business to avoid these five consequences.
Whether you don’t have the time to give your bookkeeping the time it deserves or you simply don’t want to do it, reach out to our qualified Shopify CPAs and Amazon FBA CPAs to pass the baton off. Reach out today to learn more.
