E-commerce
E-commerce is the business of selling goods or services online via dedicated trading platforms, online shops or other digital systems.
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ACCOUNTING FOR E-COMMERCE BUSINESSES
In e-commerce, all transactions and the entire sales process (from placing the goods to organising payment and delivery) take place in virtual space. User-friendly user experience, fast delivery, efficient customer service and smart marketing tools are crucial in this business. Ecommerce businesses typically use various platforms (Shopify, WooCommerce, BigCommerce, Magento, Wix eCommerce, Etsy, Amazon, eBay).
Thus, the accounting of this type of business has certain specific features that differ from those of traditional (physical) shops.
Detailed accounting and analysis of fuel costs
E-commerce businesses often accept a variety of payment methods – bank cards, e-wallets (PayPal, Revolut, etc.), transfers through payment systems (Stripe, Paysera) or even “Buy now, pay later” solutions. Accountants keep detailed records by different sources and accounts.
Accounting for VAT by different countries
If a company sells goods to other EU countries or outside the EU, our accountants apply the correct VAT rates based on the location of the customer, ensuring compliance with the Distance Selling and OSS (One Stop Shop) rules, which allow you to declare the VAT in one country for the entire EU trade.
Frequent use of invoices and e-receipts
As sales are made online, invoices and receipts are often issued automatically through e-commerce or payment system integrations, so accountants control the flow of automated documents and properly record all sales in the accounts.
Accounting for inventories and cost of goods
E-commerce companies usually keep their goods in warehouses or cooperate with third-party logistics centres (3PLs), so our accountants ensure proper accounting in this area: cost of goods, transport and customs costs (if goods are imported), and the movement of goods (purchases, sales, returns).
Management of refunds and credit documents
Returns are frequent in the e-commerce business, so our accountants record credit invoices, returns to the warehouse, make VAT adjustments and enter the return data into the accounting system.
Accounting for digital platform fees
Businesses selling on international platforms (e.g. Amazon, Etsy, eBay) often incur additional fees (sales commissions, advertising costs), which are detailed and allocated to specific cost categories by our bookkeepers.
Need for management reports
Periodic profit and loss (P&L), revenue flow, sales channel analysis and margin reports are crucial for e-commerce businesses, as they often sell across multiple platforms or markets and decisions on pricing and logistics need to be data-driven. Detailed and timely accounting by our accountants provides managers and decision makers with timely analytical information to support strategic and day-to-day business decisions.
Accounting for different currencies
International trade often takes place in different currencies (euros, dollars, pounds, etc.), so our accountants ensure that the different currencies are properly converted into the company’s accounting currency.
Electronic contract and document management
In e-commerce businesses, everything is mostly digital, so our accountants help businesses manage a wide range of digital documents – both customer and supplier invoices – to ensure they comply with legal requirements.