When Should I Hire An Accountant For My E-commerce Store in Singapore?
Starting an online business is an exciting journey. According to the Singapore Department of Statistics, online retail sales made up 15.2% of the retail trade in September 2021.
Starting an online business is an exciting journey. According to the Singapore Department of Statistics, online retail sales made up 15.2% of the retail trade in September 2021. Given the current business climate, many physical businesses are changing online as a way to drive company revenue.
If you’re already running an e-commerce store, you might be wondering if it’s necessary to hire an e-commerce accountant. In this article, we’ll give you an overview of the role of an accountant for e-commerce business and how you can find a suitable one for your business.
What Is E-commerce Accounting?
Although e-commerce accounting and traditional accounting may seem similar, they’re actually very different from each other. Traditional accounting is mainly about bookkeeping - you record the list of transactions you receive in a day, tabulate those amounts, and deduct your operating and administrative cost, cost of goods and other expenses, and that becomes your income. If cash flows out from your business, that will be your expenditure.
However, as e-commerce businesses work around the clock, consumers can purchase any items from your store and other sales channels at any time of the day - and you’ll need to keep track of these transactions. You’ll also need to analyse transactional data, inventory management and sales tax.
Read more: Is e-commerce accounting different from other types of accounting?
Is It Necessary To Hire an Accountant for My E-commerce Business?
Well, it depends on the size of your e-commerce business and how much time you have to sort out your finances.
If your e-commerce store is generating a side income, you might be able to handle your accounts yourself, or occasionally get a freelance accountant to help during peak periods. But if your plan is to grow your e-commerce store, it might be necessary for you to hire an accountant. Although you may have fundamental knowledge of running a business, sometimes it’s easy to miss out important details in the financial aspects of your business. For instance, if you’re so busy handling an important project for your company that you miss the deadline for filing corporate income tax, you could receive a hefty fine for not filing on time. Having a qualified accountant will take care of your company’s financial aspect.
When Is the Right Time To Hire an Accountant?
Here are a few things that indicate the right time to hire an accountant:
When Your E-commerce Store Is Expanding
It’s okay to handle your company’s accounts at the start. But as your e-commerce store begins to expand, your transactions will increase and you’ll need to keep a proper check of your accounting and bookkeeping records. The success of your e-commerce store largely depends on how well you manage your customers, so finances might be something that takes a back seat. In this instance, you may want to delegate this task to a qualified accountant.
When You’re not Sure About Sales Tax
Unlike most business transactions, e-commerce transactions are usually multi-jurisdictional - different countries are governed by a different set of tax laws. As e-commerce businesses deal with anonymous parties, many owners struggle to understand the different tax laws, including the source of income and income classifications of transactions. There might even be double tax treaties where a person buying or selling is occasionally a tax resident in another country, resulting in double taxation of income. For instance, Kaitlyn is a US citizen, but she’s currently based in Singapore. She has her own e-commerce business selling children’s clothes. As she pays tax in the US, she doesn’t have to pay tax in Singapore. She can apply for a relief through Singapore's Double Taxation Agreement (DTA).
When You Need Someone To Help With Inventory Management
Selling products or services doesn’t usually happen in one sales channel. For your e-commerce store, you might sell your products through multiple sales channels in order to generate more income and awareness of your business.
This would also mean that you would need to monitor your inventory for multiple sales channels. Suppose you sell electric fans in your e-commerce store but you also list your products on popular sales channels like Lazada, Shopee, etc. When more consumers begin to buy your products, it’s easy to lose track of your inventory. Accounting software can be a huge help with this, and Osome’s accounting software integrates with your inventory management to make it even easier.
What To Look for in a Suitable Accountant
When you’re looking for an accountant, it’s important to find someone who is capable and has experience in e-commerce business. Here are two important criteria:
- expertise and knowledge of e-commerce accounting and tax systems. The accountant must have experience working with a wide range of accounting and bookkeeping solutions, and he or she doesn’t need to receive any form of training from you.
- awareness of compliance and deadlines related to financial reports and tax returns. Busy e-commerce owners can miss the deadlines or forget to check for errors in reports. Having someone experienced enough to check these for you means one less thing for you to worry about.
Finding a suitable accountant can be a challenge. We have a team of experienced accountants who can guide you through your company’s accounting needs, including analysing sales data, preparing financial reports and keeping track of deadlines, so you can focus on achieving your company’s goals.
E-commerce business runs 24 hours a day, so your e-commerce accounting requires someone with expertise and knowledge of the tax system and e-commerce landscape.
Free yourself from financial stress by handing over your e-commerce accounting to Osome. If you are looking for an accountant to manage your company’s finances, we have a team of experienced and qualified accountants in Singapore at Osome who can ensure your business growth. Speak to us today!