Welcome to the world of e-commerce, where small business owners are turning to online platforms such as Shopify to reach a wider audience and increase their sales.

If you’re one of them, you might have experienced how Shopify has made it easier to set up a store and customise it according to your preferences.

However, when it comes to the Shopify accounting and financial aspects, things might become tricky, especially if you’re not an expert in accounting or tax laws.

In this blog, we’ll explore whether you need an accountant for your Shopify store and the benefits of hiring one.

Read on and discover how you can take your Shopify store to the next level with the help of an accountant!

Do you need an accountant for your Shopify store?

The answer depends on the complexity of your business and your accounting expertise. If you have a small Shopify store with a low volume of sales and inventory, you may be able to manage your Shopify accounting tasks independently.

Shopify provides several built-in accounting features, including sales reports, profit and loss statements, and tax summaries, that can help you keep track of your financial performance.

However, if your business is growing and your sales and inventory are increasing, managing your finances can become more complex.

You may need to track multiple payment methods, reconcile bank statements, manage expenses, and handle payroll. These tasks can be time-consuming and require an in-depth understanding of accounting principles and tax laws.

In this case, hiring an accountant can be beneficial, and listed below are the additional reasons why:

Accurate Financial Reporting

Accurate financial reporting is crucial for managing your Shopify store, and hiring an accountant can be a game-changer. When managing financial records and reporting, accountants are the experts you need.

Accountants can set up a reliable system for recording and tracking all your business activities, such as sales, expenses, inventory, payroll, and payments.

They can also promptly generate financial reports such as profit and loss statements, balance sheets, and cash flow statements, giving you a clear picture of your store’s financial performance.

Tax Compliance

When tax compliance is involved, an accountant can be an invaluable resource. Accountants are trained professionals who can help you prepare and file your tax returns, ensuring you comply with all relevant tax laws and regulations.

They can also advise you on tax planning strategies to minimise tax liability and maximise deductions.

Moreover, an accountant can update you on changes to tax laws and regulations that may affect your business. They can help you stay informed and ensure your business complies with new tax requirements.

Cash Flow Management

An accountant can help you manage your cash flow effectively by setting up a cash flow management system that tracks your cash inflows and outflows. They can analyse your cash flow statements and identify areas where you can improve your cash management.

In addition, an accountant can help you develop a cash flow projection, which estimates your future cash inflows and outflows. This can help you anticipate cash shortages and plan for future expenses, such as inventory purchases or marketing campaigns.

Furthermore, an accountant can help you identify financing options to support your cash flow needs. They can advise you on whether to pursue a loan or line of credit and help you prepare a business plan and financial statements to support your loan application.

Inventory Management

Accountants play a crucial role in inventory management for your Shopify business. They can help you to make informed decisions about inventory levels, monitor product tracking, and implement efficient systems for ordering and tracking inventory.

Their accurate financial reporting can also offer insights into inventory trends, such as inventory turnover ratios, gross margins, and days of inventory on hand. 

In addition, accountants can help your business reduce costs by identifying inefficiencies in inventory management processes. They can recommend ways to optimise inventory levels, reduce waste, and eliminate unnecessary expenses.

Business Growth

As a Shopify store owner, you likely want to grow your business and increase your sales. But growing your business can be challenging and requires careful planning, strategy, and execution.

An accountant can help you achieve your business growth goals by providing financial expertise and guidance. They can help you analyse your financial statements or identify areas where you can reduce costs or increase revenue.

They can also help develop a financial plan for your business to achieve in a specific period, like key performance indicators (KPIs). Examples of these are gross profit margin, inventory turnover, or your customer acquisition cost.

When properly tracked, this can lead you to understand which areas of your business are performing well and which need improvement.

Frequently Asked Questions

Conclusion

Setting up a Shopify online store may not require much effort, but ensuring its profitability demands time, effort, and strong management of finances. As your business expands, it may become necessary to have an accountant.

Check out Sterlinx Global for your accounting needs on your Shopify store.

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