Processes & Procedures Archives | Fully Accountable

What Does a Fractional Controller Do During an Internal Audit?

Fully Accountable — Sun, 27 Jul 2025 15:18:42 +0000

Internal audits are critical for evaluating a business’s financial health and ensuring compliance with regulations. But for many e-commerce and digital companies, staffing a full-time financial team isn’t always feasible. That’s where fractional controllers come into play. Fractional controllers provide high-level financial expertise on a part-time or project-focused basis, making them an excellent resource for companies preparing for an internal audit.

But what exactly does a fractional controller do during an internal audit? From identifying inefficiencies to improving financial processes, they play a pivotal role in helping businesses achieve clarity, compliance, and growth. In this post, we’ll break down their responsibilities and share why partnering with a fractional controller, like one from Fully Accountable, can be a game-changer.

Why Internal Audits Are Essential

Before we dive into the role of a fractional controller, it’s important to understand why internal audits matter, especially for e-commerce and digital businesses.

Key Benefits of Internal Audits:

Regulatory Compliance: They ensure your business complies with tax laws and financial reporting standards.
Fraud Detection: Audits catch discrepancies or suspicious activity early before they escalate into larger problems.
Process Optimization: They uncover inefficiencies in your financial workflows, helping streamline operations.
Investor Confidence: A clean financial record boosts credibility with investors and lenders.

While internal audits can reveal opportunities for improvement, they’re also incredibly detailed and resource-intensive. That’s why bringing in a fractional controller makes sense—they provide the expertise to guide you through the process efficiently and accurately.

The Role of a Fractional Controller in Internal Audits

Fractional controllers come equipped with deep financial knowledge and the ability to tackle complex tasks, without the need for a full-time hire. Here’s how they add value during an internal audit process.

1. Ensuring Compliance

The biggest priority during any internal audit is ensuring compliance with financial regulations and tax laws. Fractional controllers have a strong grasp of these requirements and help companies stay on track.

How They Help:

Review financial statements and reporting to ensure they align with GAAP (Generally Accepted Accounting Principles).
Verify tax filings for accuracy and confirm adherence to state and federal regulations.
Identify areas where your financial processes may fall short of compliance standards.

Example: For an e-commerce company selling nationwide, a fractional controller could flag underreported sales tax liabilities in states where the company has established nexus, ensuring compliance before external auditors step in.

2. Identifying Inefficiencies

Efficient financial operations save resources and reduce long-term costs. A fractional controller brings an outsider’s perspective, spotting inefficiencies that may go unnoticed by internal teams.

Areas They Focus On:

Operational Inefficiencies: Finding redundancies in expense tracking or reconciliation processes.
Technology Gaps: Identifying outdated accounting systems that slow down audits or lead to errors.
Mistakes in Reporting: Catching and correcting inconsistencies in your financial data.

Example: An e-commerce store using manual spreadsheets to track marketplace sales might receive recommendations from their fractional controller to integrate tools like QuickBooks or NetSuite, saving hours of weekly labor.

3. Strengthening Internal Controls

Internal controls are vital for safeguarding your business against fraud or costly errors. During an audit, a fractional controller evaluates existing systems and recommends improvements.

How They Contribute:

Assess current controls to detect gaps, such as lack of segregation of duties or weak approval processes.
Implement robust procedures, such as automated approval systems for large transactions.
Train team members on best practices for preventing fraud and maintaining accurate records.

Example: A fractional controller might set up step-by-step invoice approval workflows for an e-commerce team, ensuring no single person can create, approve, and issue vendor payments.

4. Improving Financial Processes

Fractional controllers don’t just ensure compliance—they help your business achieve better financial health by optimizing processes.

Key Improvements They Drive:

Streamlining Close Cycles: Shortening the time it takes to close monthly financials with efficient workflows.
Implementing Automation: Recommending tools that automate reporting, reconciliation, or payroll management.
Standardizing Reporting: Ensuring accurate and consistent reporting across departments or platforms.

Example: For a growing digital subscription business, a fractional controller might automate subscription revenue forecasting using tools like Stripe and data dashboards, providing clarity ahead of the audit.

5. Preparing for Auditor Questions

Navigating audit requests and questions can be overwhelming, especially if your team isn’t prepared. A fractional controller anticipates these needs, ensuring smoother communication and faster responses during the audit.

How They Assist:

Create detailed documentation for auditors, such as organized expense reports or vendor contracts.
Prepare your in-house team to handle common auditor questions without delays.
Serve as a point of contact between your business and the audit team.

Example: An outsourced warehouse dropship business that manages inventory across platforms like Shopify and Amazon could rely on a fractional controller to reconcile product sourcing data, ensuring every expense is accounted for before auditors request it.

6. Delivering Insights Beyond the Audit

Once the audit is complete, a fractional controller doesn’t stop working. They deliver actionable insights to drive improvements across the business, ensuring long-term value from the process.

Post-Audit Contributions:

Summarizing key findings and prioritizing recommended updates.
Supporting ongoing compliance through regular reviews.
Providing strategic financial advice to prepare for future audits.

Example: After conducting an internal audit, a fractional controller might develop an annual compliance plan for an e-commerce business scaling into new states, ensuring readiness for tax season.

Fully Accountable’s Fractional Financial Services

At Fully Accountable, we know that e-commerce and digital businesses face unique challenges when it comes to managing finances, and internal audits are no exception. That’s why we offer fractional financial services tailored specifically to your needs.

Benefits of Working with Fully Accountable:

Expertise in E-Commerce: We work exclusively with U.S.-based e-commerce and digital businesses, so we understand the nuances of your operations.
Scalable Solutions: Whether you need help during a one-off audit or ongoing financial support, our flexible services adapt to your goals.
Enhanced Efficiency: From compliance to reporting, our fractional controllers bring efficiency and expertise to every financial process.

With Fully Accountable, you get peace of mind knowing your financial health is in expert hands, so you can focus on growing your business.

Let’s Talk

Internal audits don’t have to be a source of stress. With the right fractional controller, your business can turn the audit process into an opportunity for growth and optimization. From improving financial processes to ensuring compliance, their expertise ensures you’re prepared for every step of the audit and beyond.

Looking for help with your next internal audit or financial challenges? Contact Fully Accountable today to learn how our fractional financial services can set your e-commerce or digital business up for success.

The post What Does a Fractional Controller Do During an Internal Audit? appeared first on Fully Accountable.

Why Corporate Service Companies are Great for a Business

Fully Accountable — Wed, 02 Mar 2022 17:27:05 +0000

Corporate services providers can help you consolidate your compliance and legal documentation in one location so all of your executives have easy access. If you’re looking to start a new business, need help with entity management, want your corporate agent in one location, or need legal services, corporate services providers offer a unified approach. These providers help you allocate resources more efficiently and simplify compliance and legal documentation in one location.

At Fully Accountable, we believe in providing more than simple bookkeeping and compliance services to businesses of all industries and sizes. We want you to feel like you have a partner in your business expansion. Instead of spreading yourself thin with multiple providers, contact us today to streamline your long-term business expansion, ensuring your compliance and legal documentation stay in an easily accessible location.

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

Corporate services cover a wide range of business processes that companies typically spread out across multiple agents, whether in-house or outsourced. This leads to needless confusion and inefficiency, strangling your resources and disjointing your business.

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Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]Corporations need corporate agents to provide services that reduce costs and resources. Using a corporate agent helps businesses avoid hiring and training personnel to perform banking tasks. The main reason trusting your accountant service as a corporate agent is beneficial for your company is that your accountant already understands your critical compliance and legal documentation.

When choosing a corporate agent, you should pre-define your stipulations beforehand. You likely won’t want your corporate agent to handle all of the legal or compliance issues you face, but rather specific tasks.

Corporate Legal Services

As evidenced by entity management, cutting down on the points of contact for legal services is another area where corporate services providers can help. Because these organizations are familiar with your tax and compliance information, they can be a valuable resource for cost-effective corporate legal services. An outsourced legal service can spend more time doing their due diligence on your behalf, ensuring you’re in compliance with local, state, and federal laws.

Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]Entity management is the process of managing a company’s vital information and documents to ensure they stay compliant as well as organized. As the business world becomes more digital, emerging software makes these processes easier and more efficient. Outsourcing your business entity management system gives you access to professionals who can integrate the most advanced software into your business.

Why Do You Need an Outsourced Entity Management System?

More Efficient Strategy

Requesting reports and documents from multiple vendors hampers your ability to create effective strategies. Navigating these reports and ensuring accuracy are critical components of entity management that can eat time from executives focusing on their core principles.

The last thing you need is for your team to make a minor mistake or miss a deadline. However, that often happens when employees are overloaded with responsibilities that should be fulfilled directly. Putting these responsibilities in the hands of an entity management partner leads to substantial efficiency and productivity gains. With an outsourced entity management partner, you can automate workflows and use notifications to prompt shareholders to take action.

Higher-Quality Data

When you store data on a central platform or software, you can analyze and utilize more of it. You also run less of a risk of duplicating or making an error on the corporate record, which translates to higher-quality entity data and less painful audit processes. When it comes to entity management, the most important components are accurate, up-to-date data.

Company-Wide Compliance

Regardless of your business’s size, you need to be able to standardize objectives to retain efficiency and productivity. Entity management services give you a company-wide, repeatable process for compliance. Automated filings to local regulatory agencies maintain a more accurate corporate record for legal documents and avoid losing resources by looking for details across multiple systems.

Easily-Managed Entity Risk

With more efficient organization and compliance processes comes less entity risk. When your company’s entire repository is archived and accessible on a company-wide basis, compliance is easier to manage. Components of entity risk management, such as automated filing and real-time data, simplify this process and highlight potential compliance or legal issues so you can respond quickly and decisively.

Corporate Agents

Corporations need corporate agents to provide services that reduce costs and resources. Using a corporate agent helps businesses avoid hiring and training personnel to perform banking tasks. The main reason trusting your accountant service as a corporate agent is beneficial for your company is that your accountant already understands your critical compliance and legal documentation.

Corporate Legal Services

Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]Additionally, corporate secretarial roles have expanded substantially in recent years, turning what was once solely administrative into an instrumental piece that streamlines company operations and effectively manages executives’ time.

What Is Entity Management?

Entity management is the process of managing a company’s vital information and documents to ensure they stay compliant as well as organized. As the business world becomes more digital, emerging software makes these processes easier and more efficient. Outsourcing your business entity management system gives you access to professionals who can integrate the most advanced software into your business.

Why Do You Need an Outsourced Entity Management System?

More Efficient Strategy

Higher-Quality Data

Company-Wide Compliance

Easily-Managed Entity Risk

Corporate Agents

Corporate Legal Services

Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]Entrepreneurs and small business owners don’t have time to waste. However, with a corporate services provider, you have more time to focus on your core business principles.

Outsourcing Secretarial Management

Corporate services providers simplify outsourcing your secretarial duties. In the past, outsourcing was overcomplicated by needing to contact law firms, accounting companies, and compliance services separately. Reputable corporate services providers handle all these operations with one provider.

Additionally, corporate secretarial roles have expanded substantially in recent years, turning what was once solely administrative into an instrumental piece that streamlines company operations and effectively manages executives’ time.

What Is Entity Management?

Why Do You Need an Outsourced Entity Management System?

More Efficient Strategy

Higher-Quality Data

Company-Wide Compliance

Easily-Managed Entity Risk

Corporate Agents

Corporate Legal Services

Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]As an entrepreneur, do you want to bog yourself down with miscellaneous documents and complex filing requirements? Reputable corporate services providers consolidate all of your documents in an easily accessible format, helping you avoid any late or incorrectly filed documentation. They will also deliver documents, including your business formation and EIN.

Cost-Effective and Saves Time

Entrepreneurs and small business owners don’t have time to waste. However, with a corporate services provider, you have more time to focus on your core business principles.

Outsourcing Secretarial Management

What Is Entity Management?

Why Do You Need an Outsourced Entity Management System?

More Efficient Strategy

Higher-Quality Data

Company-Wide Compliance

Easily-Managed Entity Risk

Corporate Agents

Corporate Legal Services

Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]You must have a physical location in the same location where you form the business. This can be a substantial hurdle for entrepreneurs to overcome. Corporate services providers eliminate that hurdle.

Easily Accessible Company Documents

As an entrepreneur, do you want to bog yourself down with miscellaneous documents and complex filing requirements? Reputable corporate services providers consolidate all of your documents in an easily accessible format, helping you avoid any late or incorrectly filed documentation. They will also deliver documents, including your business formation and EIN.

Cost-Effective and Saves Time

Entrepreneurs and small business owners don’t have time to waste. However, with a corporate services provider, you have more time to focus on your core business principles.

Outsourcing Secretarial Management

What Is Entity Management?

Why Do You Need an Outsourced Entity Management System?

More Efficient Strategy

Higher-Quality Data

Company-Wide Compliance

Easily-Managed Entity Risk

Corporate Agents

Corporate Legal Services

Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]Forming a business isn’t a simple matter of declaration; there are numerous steps you have to complete. While the following list is by no means exhaustive, it provides an overview of some of the basic steps to forming a business. Depending on the type of business you plan to start, you might have to complete more steps to comply with state-specific requirements.

Conduct market research

Create a business plan

Apply for an Employer Identification Number (EIN) if applicable

Select the type of business you want to become (LLC, S-Corp, or C-Corp)

Choose your tax year

Have your employees fill out Form I-9 and Form W-4

Pay your business taxes

Apply for business licenses and permits

Protect your business with insurance

Set up a business bank account

How Do Corporate Services Help With Company Formation?

Reduced Risk of Company Formation Errors

New businesses are more likely to let information slip through the cracks, as business practices haven’t settled in yet. Hiring an outsourced company formation services team to help with company formation can allay those growing pains. A corporate services provider offers legal and compliance documentation consolidation to ensure nothing gets lost in the shuffle.

Suppose you’re trying to form a business. In that case, it’s easy to overlook a few of the principle details, such as checking business name availability, preparing Articles of Organization, and filing documents with the Secretary of State. Corporate services ensure your business is ready to operate from the start, avoiding small errors during the beginning stages. Reputable teams will help you streamline your processes to ensure you understand the various challenges as your business grows.

Registered Agent Services

State agencies require all businesses, whether LLCs or corporations, to have a registered agent. A registered agent is a registered address that serves as the contact link between your business and the government.

You must have a physical location in the same location where you form the business. This can be a substantial hurdle for entrepreneurs to overcome. Corporate services providers eliminate that hurdle.

Easily Accessible Company Documents

Cost-Effective and Saves Time

Entrepreneurs and small business owners don’t have time to waste. However, with a corporate services provider, you have more time to focus on your core business principles.

Outsourcing Secretarial Management

What Is Entity Management?

Why Do You Need an Outsourced Entity Management System?

More Efficient Strategy

Higher-Quality Data

Company-Wide Compliance

Easily-Managed Entity Risk

Corporate Agents

Corporate Legal Services

Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]

Corporate services describe a wide range of principles and practices that consolidate your compliance and legal documentation. Starting a business, organizing entity management, using a corporate agent, or looking for legal corporate services all fit under the umbrella of business corporate services. Your goal should be to group those services together so that nothing gets lost in the shuffle.

Automating your documentation management ensures reports are always up-to-date, giving your executives convenient access to important information. Additionally, having a corporate services provider handle legal services, such as mergers, dissolutions, DBAs, and reinstatements, can drastically improve your agility and efficiency.

At Fully Accountable, we believe companies should have access to all of their corporate services with one provider. As a corporate services company, we can simplify your documentation, compliance, and legal services and help you navigate the business’s challenges.

Steps to Forming a Business

Forming a business isn’t a simple matter of declaration; there are numerous steps you have to complete. While the following list is by no means exhaustive, it provides an overview of some of the basic steps to forming a business. Depending on the type of business you plan to start, you might have to complete more steps to comply with state-specific requirements.

Conduct market research

Create a business plan

Apply for an Employer Identification Number (EIN) if applicable

Select the type of business you want to become (LLC, S-Corp, or C-Corp)

Choose your tax year

Have your employees fill out Form I-9 and Form W-4

Pay your business taxes

Apply for business licenses and permits

Protect your business with insurance

Set up a business bank account

How Do Corporate Services Help With Company Formation?

Reduced Risk of Company Formation Errors

Registered Agent Services

You must have a physical location in the same location where you form the business. This can be a substantial hurdle for entrepreneurs to overcome. Corporate services providers eliminate that hurdle.

Easily Accessible Company Documents

Cost-Effective and Saves Time

Entrepreneurs and small business owners don’t have time to waste. However, with a corporate services provider, you have more time to focus on your core business principles.

Outsourcing Secretarial Management

What Is Entity Management?

Why Do You Need an Outsourced Entity Management System?

More Efficient Strategy

Higher-Quality Data

Company-Wide Compliance

Easily-Managed Entity Risk

Corporate Agents

Corporate Legal Services

Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

Steps to Forming a Business

Conduct market research

Create a business plan

Apply for an Employer Identification Number (EIN) if applicable

Select the type of business you want to become (LLC, S-Corp, or C-Corp)

Choose your tax year

Have your employees fill out Form I-9 and Form W-4

Pay your business taxes

Apply for business licenses and permits

Protect your business with insurance

Set up a business bank account

How Do Corporate Services Help With Company Formation?

Reduced Risk of Company Formation Errors

Registered Agent Services

You must have a physical location in the same location where you form the business. This can be a substantial hurdle for entrepreneurs to overcome. Corporate services providers eliminate that hurdle.

Easily Accessible Company Documents

Cost-Effective and Saves Time

Entrepreneurs and small business owners don’t have time to waste. However, with a corporate services provider, you have more time to focus on your core business principles.

Outsourcing Secretarial Management

What Is Entity Management?

Why Do You Need an Outsourced Entity Management System?

More Efficient Strategy

Higher-Quality Data

Company-Wide Compliance

Easily-Managed Entity Risk

Corporate Agents

Corporate Legal Services

Corporate services providers can handle the following legal requirements for businesses:

Dissolutions
Mergers
DBAs
Reinstatements
Amendments
EIN Obtainment

How do Outsourced Corporate Services Help Businesses?

The post Why Corporate Service Companies are Great for a Business appeared first on Fully Accountable.

Time Management Fundamentals in a Remote Workplace

Maureen Greany — Wed, 25 Nov 2020 18:58:44 +0000

This article provides insight and advice on the subject of the Remote Workplace.

The lockdown imposed as a result of COVID-19 has enforced the concept of working from home as the “new normal”. Everything has become digitized, and there is little doubt that this is how businesses will operate in the future. This shift may be welcoming for some but overwhelming for others.

All types of jobs are capable of being managed at a remote workplace, and we are here to help your employees embrace this new trend by outlining some key tips we’ve picked up by managing a remote workspace for the better half of a decade. You might find that many of your employees don’t have the environment or facilities at home to work and manage time efficiently. Moreover, working at a remote workplace has provided opportunities for both productivity and distractions alike. When employees are at their best, they can be very productive and won’t realize where the hours went. But when they get distracted, the quantity and quality of their work are bound to suffer.

Therefore, it’s essential to embrace this change now and work productively, which is possible through effective time management. Below you will find some time management fundamentals in a remote workplace that employees need to implement to make the most of the workday.

Have a Designated Workplace

Although this is not directly related to time management, it will provide the foundation for applying the time management fundamentals provided in this blog.

The most challenging thing about a remote workplace is to have a designated spot for work that is conducive to productivity. Being habitual creatures, humans are naturally not used to working at a place where they relax, which can be a major hindrance in productivity.

If employees have a work corner in their house or a study desk, they should use it. An ideal remote workplace should be away from any distraction, preferably a room with natural light, an option to stand or sit, a comfortable chair providing good back support, a lamp, and most importantly a clean and uncluttered desk for the laptop/PC with a few other working essentials. Otherwise, they can just set up a corner of their house that is away from the main area with minimal distractions.

Employees can be creative with their work station and make it colorful if that is something that motivates them. They can also make any desk a standing desk and get a laptop and PC to the right height with small side tables, stools, or even a cardboard box for a comfortable height.

Make a To-do List

Good schedules make work productive. A to-do list will set the pace of the work and help with time management. It’s advisable to keep the same schedule that was followed in the office. Since there will be no supervision on employees, it might be hard for some to stay focused. So, it’s essential to stay on track by setting daily goals and trying to beat them.

Employees should include everything in the to-do list; from a big project to minor tasks. They should try to take lunch breaks, coffee/tea breaks around the same time every day, so they don’t stretch into longer breaks. They should break their day up into small, manageable chunks and first complete tasks with higher priority. This makes it easier to get a lot of tasks done than sitting down at the desk and just staring at the to-do list.

For example, if there are six tasks to complete in a day, they should prioritize which three should be finished before lunch and choose three to take on in the afternoon. Then break them down into even smaller blocks that are manageable in 30-60 minutes each. This system is an excellent way to stay on track and motivated.

It’s best to make it the night before and make sure to follow it. When each task completed is ticked, not only is there a feeling of contentment and motivation but will also help identify how much work is left to set the pace accordingly.

Using a shared task manager, like Asana, is totally helpful in keeping everyone aligned on what is getting done, and when.

Determine When You Are Most Productive

Since everyone’s situation is different, all the tips might not work for everyone the same way. Employees need to identify what works best for them. If they are newly adjusting to a remote workplace, they should try different work patterns and see which makes time management more effortless.

Everyone has a different workflow pattern. If someone is a morning person and loves to work in quiet, then they should start off early as it’s the best time to work as they will be more focused and productive. They can start with the top priority and most challenging tasks as soon as they start the day with a fresh mind.

To stay productive employees need to pretend like they are going to the office. They should set up an alarm, get a cup of coffee or tea, and dress accordingly. This will create signals, and the brain will know it’s time to get things done by keeping them in a work frame of mind.

Manage Distractions

It’s crucial to minimize distractions while working. As mentioned before, employees should choose a spot with minimal distractions. However, the biggest distraction is social media and smartphones. Every minute they spend watching their favorite show or playing a game is a minute not spent on work. It’s better to turn off the notifications or flip the mobile upside down so that things don’t flash across the screen during work. Employees should only use them during break or after work because once people start using social apps, they can lose the next half-hour to mindless scrolling.

Employees might leave their work to do grocery, laundry, or to take their dog for a walk. They don’t carry out these in the office so they should treat the remote workplace the same way. They should tackle personal tasks after completing office work and make a separate to-do list.

Build Your Accountability

Employees should set up an accountability system with their co-workers to make sure that they are on track. They should stay in touch with them, keep updating each other on the task done, and left so that they are less isolated and feel indirect supervision. Again, Asana is a very helpful task manager that can assist in this. They can also have meetings on Zoom, Slack, Skype, or any other platform to get updates on each other’s progress, discuss any issues they might be facing and offer support where needed.

Employees should make themselves accountable for doing one task at a time instead of multi-tasking. The focus should be on quality rather than quantity. They may think that it saves time, but the brain takes at least 15 minutes to refocus when the tasks are switched. The mind has to shift focus continuously, which affects productivity. Therefore, it’s better to focus on one task at a time and shift focus only when they are done with a task. This will help in completing the tasks quicker as compared to doing them together.

Efficient time management needs the right mindset and consistency. Employees should promise themselves that they will finish the to-do list and stay away from distractions.

Adjust Your Expectations

Any change is hard, and the change of working from a remote workplace with the stress of managing a global pandemic might be especially challenging.

Employers should try to be flexible with the employees and give them time to adjust to this new working style. They should adjust their expectations on how employees will initially perform when they start to work from a remote workplace. Handling work from the office and home is different. Employers should be clear in communicating their expectations to the team members so that there is no undue pressure on them.

Similarly, employees shouldn’t overburden themselves when they initially start to work at a remote workplace. They should be aware that they may not be as consistent and productive as in the office.

Companies assume that employees should respond immediately, no matter what time it is or work overtime. This eventually leads to burnout. Therefore, they should clarify their expectations with their team in terms of working hours and response times.

They should also share this with their families, partner, or roommate for better collaboration and communication. This can help ease any guilt around trying to be always-on while still juggling caregiving, homeschooling, and other responsibilities.

Pay Attention to Fragmented Time

Fragmented time occurs due to the small pockets of 15 to 30-minute blocks of time that exist between scheduled meetings. These can work well as breathing space if planned for intentionally. But most of the employees are very passive with their calendars.

Companies tend to schedule employees for meetings based on what works for them and the open space they spot in their calendars. But that may leave the employees with very little time to get work done and the fragmented time ends up being sucked up in busy but unproductive activities.

Plan the Down-Time

If employees plan out what they will do after work, it will motivate them to complete the work for the day as they will have something to look forward to. Even though due to COVID-19 there aren’t many plans which can be made now, planning what to do after work, even if it is going for a workout, having their favorite food, or just hitting the couch, will help them stay focused and encourage them to finish the work on time.

Time management and maintaining a positive work-life balance might not be easy when working from a remote workplace, but planning out what they will do after work will keep their personal life separate and help them rest before the next day.

Take Breaks

Instead of not having lunch at all or grabbing and eating it while doing work, employees should take a lunch break at the same time which they had in the office so that they are in the same work routine and manage time efficiently. Not having lunch at all will deprive them of the energy to carry out the work for the day.

During breaks, they should close the computer and try to walk or meditate to relax the muscles. This will help them feel rejuvenated and make them ready to start the next part of the day. If they are feeling stressed, opting for quick mindfulness meditation, or even taking a midday bath could be a good option.

Reward Yourself

Motivation plays a vital role in increasing productivity and time management. Employees should set targets and promise to give themselves a treat once they reach the desired target. When they have something to look forward to at the end of the day, they will be quicker in finishing their work.

The rewards should be healthy. They can treat themselves to tea, listen to their favorite song, buy their favorite snack, or watch their favorite show. Giving themselves small breaks throughout the day is a great reward as well. And after enjoying these rewards, they will feel fresh and motivated to work the next day.

Final Words

The COVID-19 pandemic has been around since what defiantly feels longer than it actually has existed, and everyone is still trying to adapt to this new enclosed lifestyle. Working from a remote workplace has become a reality for most professionals around the world. While those who haven’t experienced it yet are curious to know what working from home looks like.

After going through these time management fundamentals, people can get an idea about what working from a remote workplace looks like and will be able to stay organized, productive, efficient, and healthy.

Let Fully Accountable simplify your accounting needs, Contact us today or schedule a 30-minute strategy call!

The post Time Management Fundamentals in a Remote Workplace appeared first on Fully Accountable.

7 E-Commerce Tasks Every Store Owner Should Consider Outsourcing

Chris Giorgio — Wed, 08 May 2019 20:44:58 +0000

From creating new products to leading marketing initiatives, running an e-commerce business is a full-time job for online store owners. They often don’t have time to handle every aspect of the business, focusing instead on high-level business strategies that move the needle. While e-commerce trends come and go, every business has a list of daily e-commerce tasks that remain constant. These tasks are essential for a properly functioning business. But what do e-commerce businesses do when they lack the bandwidth to complete crucial tasks? They rely heavily on outsourcing.

An e-commerce outsourcing specialist might be better trained to handle e-commerce-related tasks, allowing business owners to focus on other areas of the business. Whether it’s outsourcing a few tasks or fully committing to outsourced e-commerce services, there’s never been a better time to outsource certain tasks to contractors or freelancers.

Below are 7 of the most important e-commerce tasks you should consider outsourcing:

1. E-Commerce Business Product Sourcing

When you’re in the business of selling products, everything that goes into finding these products becomes a continuous cycle. Realistically, you can’t forever rely on one of your best-sellers to keep bringing in the money. You need to always be on the hunt for new ones regardless of whether your current products are selling or not. Don’t become complacent with your current product line. Stay on the lookout for new opportunities, as product sourcing requires a more in-depth approach than simply browsing online.

2. Product Listing Optimization

A well-optimized product listing is essential if you want to grab potential buyers’ attention. From the product title down to the images used, each of these elements has a unique way of converting potential leads into actual buyers. The trick is to have all these elements complement each other to form one convincing “pitch,” which is not the easiest thing to do without the necessary experience and skill set.

Thankfully, you can find plenty of skilled freelancers to improve your product listings. In the online marketplace, presentation is key. You yourself would most likely buy an item that has all the information you need over one that comes with low-quality images and poorly written descriptions, right?

3. Customer Service

Every business needs competent customer service because you won’t be available 24/7 to address urgent concerns. By having an extension of your voice answer inquiries on your behalf, customers are given the attention they expect.

One of the advantages of hiring freelance talent today is that many have experience in customer service roles. This can be beneficial for streamlining your business and improving profitability.

4. Order Fulfillment/Processing

For some people, processing orders is not a complicated task. What’s so difficult about getting customer information, checking the inventory for stocks, updating a database, and arranging product shipment? While the task can be considered clerical, it’s not going to be that easy when you have 30 orders to process for an entire day.

If your product is “hot,” you may have to process even more. Doesn’t sound as easy anymore, does it? Yes, the task may not require a lot of thinking, and it’s repetitive at best, but you’ll need all the help you can get when volume spikes. It’s going to be impossible for you to take care of this when you have your hands full managing the business’s daily operations, which makes outsourcing this task more sensible.

5. E-Commerce Inventory Management

Imagine how embarrassing it would be to advertise a product in your store only to find out that you’re out of stock when a potential customer decides to place an order. Such a scenario can put your reputation in question and can hurt your business. Not only will you be accused of false advertising, but it will also make you look disorganized and unprofessional.

One way of keeping this from happening is by using a competent e-commerce platform able to track inventory as it comes in and goes out. It’s also beneficial to have a dedicated person overseeing your inventory to ensure you have a clear understanding of your warehouse stock levels. Having an inventory manager also helps you save money because they can help you order new supplies and determine how much you actually need so you don’t end up having too much excess inventory. Keeping a balanced number of items in stock requires focus, which is why outsourcing inventory management makes perfect sense.

6. Web Design/Development

Like a brick-and-mortar store, your e-commerce store needs a strong visual presence to capture the attention of potential customers. Having a visually inviting and easy-to-navigate web presence is crucial. You have to remember that while people today may be highly visual, a lot of them also have a shortage of patience. Beyond aesthetics, your website should prioritize user experience. The text should be readable, the images shouldn’t be intrusive, and navigation should be easy. If it takes more than a minute for a customer to locate your shopping cart, you can’t expect people to have the patience to look for it, which can lead to fewer sales.

Web design and development require a specific skill that not everyone has been blessed with. By hiring a freelancer who has the skills and experience for both, you’ll be giving your business a big advantage because they have the ability to make your web presence stand out.

7. Social Media

People today are on social media almost all the time, and it would be a total waste if you didn’t take advantage of the millions of potential customers you can put your products in front of. To help increase your odds, outsourcing social media management to a freelance expert is an excellent decision. Having an experienced social media manager handle your social media tasks is a worthy investment with benefits that you will continue to reap in the long run. A skilled social media manager can be a valuable asset to your business, providing benefits that continue to pay off over time.

Where Do You Begin?

Once you have decided that outsourcing is something you want to do, the first step is to take note of the seven tasks mentioned above and list out all the duties and responsibilities each task will entail. It’s important to be very specific at this point, as this will be your basis for finding the right person for each task.

Which social media channels will the social media manager handle?
Will you allow the inventory manager to order new supplies without your consent?
How involved do you want to be with customer service?
Will the web designer/developer be in charge of presenting you with a design, or do you already have one you would like them to replicate?

It’s important to give yourself time to do a proper task assessment so you and the person you hire know what to expect.

How Much Are You Willing to Spend?

While hiring a freelancer is more affordable than hiring for a full-time position, it can still cost more than you expect, especially if you have hired multiple freelancers. Most freelancers generally work on a per-hour basis, but some work per project or on fixed pricing. Identify the option that aligns best with your needs and financial constraints, as this will guide your selection of a freelance marketplace and freelancer.

Where Do You Find Them?

With the gig economy at its peak, finding a freelancer to outsource tasks to has never been this easy. Dozens of websites offering massive talent pools are scattered all over the internet, each one offering a unique way of helping you hire and manage freelancers. Popular sites like Upwork, FreeUp, and Fiverr are just some of the websites you can visit so you can begin looking for the best people to help you.

Hiring individual freelancers is one option, but it can be time-consuming. Between reading resumes, messaging back and forth, and interviewing candidates, you’ll end up with fewer hours in the day to operate the business. Another concern is that you can’t be certain if a freelancer will work out, putting you back in the same spot a few weeks or months down the road. If you want to get the best help with the least amount of hassle, you could hire an e-commerce outsourcing service. They effectively take care of the outsourcing process, finding and managing the right people to work on your projects.

Formally Onboard Them and Set Expectations

Once you have hired the freelancer of your choice, the next step is to formally onboard them. Begin by setting expectations as to the work hours, outputs, and reports you require.

Are they supposed to work in the same timezone as yours?
Which reports will they need to provide on a weekly/monthly basis?
Do they have to work on weekends?
Is there a certain number of hours they need to work each week?

This is also the best time to provide them with access to all the tools you use both for work and for tracking purposes, as well as discuss how you will communicate with one another.

Final Thoughts

Running an e-commerce business is no walk in the park. However, it’s much easier with help from freelancers. By outsourcing certain tasks, you can lighten your workload and devote more time to high-impact activities.

With eCommerce accounting services from Fully Accountable, you can leave accounting to the professionals. Contact us at (877) 330-9401 or schedule a strategy call to learn more about our eCommerce solutions and outsourced accounting services.

The post 7 E-Commerce Tasks Every Store Owner Should Consider Outsourcing appeared first on Fully Accountable.

Benefits of Outsourcing Your Amazon Accounting Needs

Chris Giorgio — Wed, 24 Apr 2019 15:25:34 +0000

As a new or established Amazon seller, do you struggle to keep finances in order? Are you ready to start focusing on growing your business rather than tedious accounting details? Amazon is a competitive marketplace, which makes balancing finances difficult for many business owners. Investing in a Certified Public Accountant (CPA) specializing in Amazon bookkeeping lets you easily track every detail. Maintaining a clear understanding of your business’s financial health is crucial for long-term success. A polished e-commerce accountant will be well-informed about new accounting software and time-saving tools to help increase efficiency within your business.

Digital businesses are competitive and always changing. If the majority of your sales take place on Amazon, the largest e-commerce marketplace in the world, it’s necessary to hire experienced e-commerce financial experts. They will manage everything for you without missing important details, allowing you to build a strong foundation for your Amazon business’ future. Accounting services may include forecasting, bookkeeping, tax preparation, balance sheets, income statement production, financial guidance, and more.

In this guide, we will discuss the importance of hiring an experienced e-commerce accountant to handle your Amazon business finances. With help from financial experts, you’ll learn about the different services offered and how to streamline your cash flow with help from financial experts. We will also briefly review how Amazon has impacted the e-ccommerce marketplace and what it means for the future of digital businesses.

How Amazon is Shaping the E-commerce Marketplace

Amazon is the world’s largest online retailer, allowing businesses to buy and sell products, make money transfers, and transfer data from a device with an internet connection. This is impressive, considering Amazon started as an online bookstore in 1994.

For an e-commerce business, managing finances on platforms like Amazon requires specialized accounting services to navigate financial challenges, ensure compliance, and enhance growth as the business scales.

Since then, Amazon has evolved and grown into additional product areas and third-party sales where retailers and individual sellers utilize Amazon to sell goods and services. This is especially beneficial for companies with less online presence because it allows them to expand their brand, products, and services on an internationally known platform.

Amazon, in a sense, leases an online space to retailers who want to use the platform as a supplemental outlet for their online sales. Large and small companies use Amazon to sell products, while also selling the same inventory on their company website. This has allowed many businesses to grow exponentially and only continues to do so.

Benefits of Hiring an Amazon Bookkeeping Accountant

With so many sellers using Amazon Marketplace, hiring an outsourced accounting firm to gain financial guidance will allow you to make better decisions. As a business owner, you are responsible for all assets and liabilities, so finding a company experienced in the e-commerce marketplace saves time, stress, and money in the long run.

With help from seasoned experts, you won’t have to worry about the small details. They will manage everything for you, such as forecasting, bookkeeping, inventory tracking, tax preparation, and accrual accounting, which records revenue and expenses when they are earned rather than when they are paid, providing a more accurate financial picture over time. Additionally, tracking and categorizing financial transactions is crucial for understanding the financial health of your business.

Below are a few key areas your accountant will keep track of for you.

Cash Flow and Income Tracking

Since there is a higher marginal cost for Amazon businesses that sell physical goods, such as Amazon, it’s crucial to ensure your cash flow is managed and tracked at all times. Properly managing financial records is essential, particularly during tax season when valid expense proof is necessary. An outsourced e-commerce expert will be able to handle this for you without losing track of the numbers.

For Amazon sellers, specialized accounting services and software add-ons are vital to effectively manage finances, automate processes, and accurately track sales across multiple platforms.

An outsourced e-commerce CPA will consistently reconcile books weekly or monthly to ensure the money leaving an account matches the money spent. By using reconciled books, an outsourced accountant will create these forecasts, analyze cash flow and expenses, and give your business tailored feedback. A business should always know what money is coming in and coming out of their account. An accounting team will do just that.

Amazon has and continues to change the way people do business by making it easy to gain brand awareness and utilize the Amazon Marketplace to expand their potential for an increase in sales. No matter the business, sales should be a priority. Outsourcing your accounting needs to handle bookkeeping, running reports, and other financial components will allow you to focus on streamlining your business.

Inventory Management Software and Expenses Tracking

Amazon accountants can track and manage your inventory using inventory management software. They will also organize operating costs, costs of goods sold, and allow you to easily track other business expenses. Additionally, tracking shipping costs is crucial for accurate financial management and inventory tracking.

While businesses work on selling products, financial e-commerce professionals take all the work companies don’t need to worry about and do it for them in cost-effective and efficient ways. They are committed to helping companies accelerate their revenue.

E-commerce accountants will also track your Amazon selling fees, including Fulfillment by Amazon (FBA) fees, storage fees, and shipping fees. The Amazon Marketplace provides business owners with a platform that effectively keeps track of inventory. This includes purchases, cash flow, and returns by using FBA, which expedites wait time by utilizing the Amazon Prime’s free Two-Day shipping on products. Amazon makes FBA cost-effective and simple by allowing sellers to pay as they go. Since the cost of shipping is included in fees, the financial breakdown is transparent. Although, it is often hard for business owners to track all of the fees on their own. This is where an expert e-commerce accountant steps in.

Since the inventory is purchased upfront, returns can also make the accounting aspect a little tricky. Returns have to be tracked and processed, which requires an accountant to factor in returns to accurately forecast cash intake and develop projections while ensuring all books are cleared.

Outsourcing Your Amazon Accounting Needs

When it comes to investing in Amazon accounting services, it’s best to start at the beginning of the selling process before your business fully takes off. Although, it’s never too late to invest in accounting services. If you are already an established Amazon seller who is struggling to balance the numbers and the business simultaneously, we’ve got you covered. At Fully Accountable, our team has the right expertise and experience in the e-commerce accounting industry to keep your organization ahead of the curve, save you money, and increase profits.

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Basics of eCommerce Accounting: Steps to Get Your Company on Track

Chris Giorgio — Tue, 26 Feb 2019 19:59:38 +0000

Launching a new online business is a long-time commitment project that takes tons of passion to build. It starts with just an idea that you might have had. But you need perseverance every step of the way to take it to the heights you imagined it would reach.

There is no limit to the amount of time and effort you need to put in it. There are mountainous amounts of small to large details you need to take care of as a small business owner. From the very moment you decide to start the venture off, you need to keep track of everything to make sure everything runs smoothly.

One of the most important aspects of this record keeping is the finances. As your business takes off and experiences one milestone after the other, you’ll need to stay on top of everything. This will allow you to be in control of the financial situation and take more well-informed decisions.

If you are new to the whole entrepreneurship path, you might be a bit lost when it comes to eCommerce accounting and bookkeeping. The following guide will help you identify the basics of eCommerce accounting. Read as we summarize 10 steps that will help you start on the right foot and educate you on the bases you need to cover. These will prove to be of great help and convenience when you are on the path to achieve your long-term goals.

1. Open a Bank Account

This should not come as a surprise. Running a business requires you to set up an account under its registered name to stash all the earnings. So when you have finalized the name and registered your business legally, open a bank account. Having a separate bank account in your business’s name will make thing much easier when you have to pay taxes.

One important thing here is that partnership, corporations, and LLCs are legally required to open a separate account. Also, if you are the sole owner of the business, even though you are not legally obliged to, a separate account is much recommended.

You can start by setting up a current or checking account and then a savings account(s) that will help you organize your money better for tax purposes. Once you have your account set up, you want to get a separate credit card for any credit you want to build. To reiterate, like the bank account, LLCs, corporations, and partnership businesses are required to have a separate credit card. In both cases, this proved helpful in separating business and personal expenses and assets.

A helpful tip here is that you do your research for choosing a bank. Look at different accounts and their fee structures as they are higher than the ones required for personal accounts.

2. Integrate a Bookkeeping System

Bookkeeping and accounting, although closely related, are not the same. While bookkeeping is a more day-to-day recording and categorization of transactions and bank statements, accounting is a compilation of that data and analyzed in a way that it makes sense to create financial statements at the end of the month and year.

This makes it clear that having an efficient bookkeeping system is imperative for maintaining your accounts. You’ll need to choose one that fits your business model. Generally, you have three bookkeeping methods that you can go with. One is the DIY or Do-it-Yourself method where you can use a program like Quickbooks or simple spreadsheet software like Excel to track your transactions.

The second way is to hire an in-house bookkeeper or accountant to do the job for you. But make sure that you have the resources to foot the payroll and benefits of an accountant as they will be your full-time employee. Lastly, you can choose to outsource your bookkeeping and accounting to a firm or hire a part-time accountant.

The decision on which route you want to go depends on your needs.

3. Track Transactions and Expenses

Having a bookkeeping system in place, recording all expenses and transactions is a crucial step you need to start taking right away. Having a record of all your expenses over the expanse of a year is key to an effective and organized accounting system. You’ll be able to monitor your business’s growth more closely and support what you report when you file your tax returns.

This includes keeping track of all expenses and organizing your receipts in a way that makes sense. To do this, you can choose to go with the old manual way and have mounting Filofaxes and other folders. Or you can use a specialized service that is designed to keep all your records in one place.

When it comes to what exactly you need to record, here are a few things to be attentive towards:

Any meals and entertainment expenses spent to conduct business.
Travel expenses for a meeting or related business activity. This includes vehicle expenses.
Gift receipts for anything you might have given to a client.
Home-related expenses that incur when you use your home to conduct business.

These are only a few examples of what you need to track in your day-to-day expenses. Besides these, one important reminder at this point is regarding mixed expenses. These expenses are those that are used partly for business and partly for personal use. This includes personal cell phones, internet connections, and cars you might use to conduct business as well.

4. Start a Payroll

It might be so that in the beginning you are a one-man show for your business. But eventually, you’ll have to hire part-time or full-time employees. While a payroll system isn’t mandatory for independent contractors, you need one for employees. It allows you to schedule their salaries and make sure that the right amount of taxes is being deducted.

You still need to keep tabs on all independent subcontractors you hire. Make sure that you have a record of hiring them, their names and addresses, the purpose of their hire, and the total amount you pay them. This will help you during tax season.

5. Identify Tax Obligations

Taxation structures vary from country to country and the type of business you run. From general income tax to import and sales taxes, it all depends on the state or province your business operates in. As far as income tax goes, the way your business will be taxed depends on whether it’s a corporation or sole-proprietorship/partnership/LLC.

While corporations are taxed independently from owners, you’ll have to claim income as personal tax return in case of self-employment. You need to withhold tax from your income and remit it in lieu of the withhold as any other employer would.

It’s important that you iron out these details to make sure your taxes are on track.

6. Identify Import Taxes and Duties

This is an important step for all businesses that import products or parts for their products from other countries. Every country has its own set of tax and duties regulations for importing certain products. Since these duties will be a cost you’ll need to bear, you need to educate yourself about these rules.

7. Investigate Payment Methods and Sales Tax

Sales tax can be a bit tricky depending on your business model. For example, if your model is based on brick and mortar, customers are charged the sales tax according to the rate identified by the state. It is a bit different for eCommerce businesses as sales tax regulations for such businesses are confusing. We would recommend that you check in with a professional accountant who’s well-versed in these regulations.

8. Keep Track of Gross Margins

Gross margins are the direct way to improving your revenues and earning more income. This is an essential tip that you need to keep track of in order to make sure that you know what it costs you to produce and sell a product and how much you are earning off of it.

To explain very briefly, gross margin refers to the total number of sales revenue that a business keeps after deducting the cost of goods sold or COGS. COGS consist of all direct costs including labor and materials that it takes to produce the product or service.

Calculating the gross margin will help you identify how much your business is actually profiting at the end of the day. The value will help you make smarter financial decisions as it indicates whether you have the ability to keep the business running or not.

9. Re-Visit and Tweak Your Accounting Systems and Methods

As your business grows, its small eCommerce accounting needs will likely change with it. You may have opted for a simpler, DIY approach in the beginning when the business was small. But now, you might be in over your head with your business expanding. As a result, you might need a more sophisticated program or entirely dedicated person/team responsible for bookkeeping and accounting.

Hence, it is important that you revisit and reassess your accounting method continually. You need to assess how much time you spend on managing your books and whether it’s costing you important time that could be allocated elsewhere. If so, it might be time for you to look for a more suitable method.

10. Understand that Sometimes, It Pays to Pay

What do we mean by this statement? We mean, that small businesses eventually reach a point when they grow out of the DIY accounting approach. The company grows to a point where having a professional handle your accounts whether by hiring an in-house accountant or outsourcing it, can make a huge difference.

Since they have the appropriate expertise in that business area, they’ll be more proficient in managing your records. They’ll have advanced and more effective software to their disposal, making them well-equipped to handle accounts. One huge benefit of having an accountant is that they can find loopholes and tax deductions to benefit your business.

In the end, you’ll be benefitting in more than one way by hiring a professional or outsourcing to an accounting firm. Firstly, you’ll have free time to focus on other business areas or even have some free time. Second, your accounts will be better recorded and your financial statements will be more accurate. Lastly, with the opportunity cost, you’ll be saving money. So it’s a win-win situation.

Finances and accounts are the backbone of growth for every small business.

When you start a new venture, it can be quite overwhelming having to maintain everything. If you follow the steps we’ve listed above, you can have better control of your business, right from the beginning. All these efforts that you put into it will only lead to continued growth and success of your business.

Having an outsourced accounting team can allow you to achieve this growth. Letting them use their expertise to handle the accounts will free up time, which you can focus on other areas of the business and keep everything running smoothly. This can benefit you even more if you have little understanding of the complicated financial aspects of running a business. Outsourced accountants don’t just manage your accounts, but also help you understand how everything works to make better decisions.

If you think that an outsourced accounting service is the answer to your eCommerce or digital business accounting needs and require more information on it, we have a compact guide for you. You can find the guide here for free. The information in this guide will help you understand why outsourcing your accounting will be beneficial for your business.

The post Basics of eCommerce Accounting: Steps to Get Your Company on Track appeared first on Fully Accountable.

When to Hire a CFO: Determining When Your Business Needs One

Chris Giorgio — Wed, 13 Feb 2019 21:23:16 +0000

Are you a busy business owner struggling to balance finances and keeping your business afloat? Are you unsure if hiring a chief financial officer (CFO) is the best option? In this article, we will cover the benefits of hiring a CFO and when it’s the right time to do so. Small business owners often take charge of their own finances and bookkeeping for different reasons. The three most common reasons include:

Not wanting to give out sensitive financial information.
Staying in control of everything.
Keeping employee payroll costs low.

It’s understandable and valid that small business owners consider these reasons and handle their own finances. But, as the business grows and expands in the market, management becomes even harder and more comprehensive. Consequently, the person responsible for looking after multiple business aspects, while handling finances and bookkeeping at the same time, becomes impractical. Consequently, it’s impractical for the same person who manages the day-to-day of the business to also handle finances and bookkeeping.

In order to alleviate the pressure, some small business owners delegate their financial management to another employee or family member. This usually doesn’t work out as the delegated person might not have the expertise to manage the bookkeeping expertly. In fact, 60 percent of small-business owners believe they aren’t knowledgeable about finance and accounting. The smart entrepreneur anticipates this and understands that the business needs a financial expert.

A chief financial officer is a dedicated resource businesses employ to bring structure and professional expertise to their financial management needs. They attend four years of college and then train to be able to create structurally sound strategies to maintain financial success. CFOs take charge of the business’s finances and ensure that the company and the stakeholders benefit financially.

Benefits of Having a CFO

A CFO has the expertise, training, and understanding of a wide range of business models. As well as how it makes and spends money. With that knowledge and their own experience, a CFO takes over the financial management of a business.

While a bookkeeper or accountant manages financial statements and day-to-day cash flows, a CFO can do more. Along with creating and preparing detailed financial and management statements, a CFO is responsible for forecasting and budgeting. Modern CFO responsibilities have evolved to include using financial data to influence operational decisions and collaborating closely with the CEO, making them integral to the company’s overall strategy and value creation.

Financial planning is a critical component of the CFO’s role, aiding in forecasting and planning for future business growth.

Since they have an overarching understanding of internal and external economic factors, they consider taxation, government policies, industrial factors, and various social issues impacting the business’s growth. With this insight, a CFO is able to guide the company’s leaders to make better and more well-informed decisions.

Small businesses in the growth and expansion phase can immensely benefit from having an outsourced CFO on the team. They understand the impact of the incoming changes and can make accurate forecasts and assumptions about the company’s future performance. This information becomes critical if the small business is considering a merger, acquisition, or seeking funding.

What Kind of CFO

Regardless of whether a company is a small business or a multinational conglomerate, CFOs add a lot of value to a company’s overall performance. However, the level of skill a company requires is different for all companies. CFO qualifications encompass a combination of educational background and professional skills, highlighting the importance of an advanced business degree like an MBA alongside expertise in accounting, finance, and leadership. The company’s current financial state, and where it expects to be in the future, dictates the type of CFO a business needs. Besides that, the public or private nature of the company, the internal policies, and industrial benchmarks impact the kind of CFO a company needs.

The CFO role now extends beyond traditional financial reporting to include strategic planning, decision-making support, and collaboration across various departments within the organization.

Regardless of the specific details, a CFO performs the following sets of responsibilities:

Have a leading role in providing financial plans and forecasts, including analyzing the capital structure. This allows them to study the prospects of growth and future business trajectory.
Creation and management of the company’s financial statements, making sure revenue is collected, the budgeting is on track, and financial goals are being met.
Relieve the CEO of the task of seeking and maintaining relationships with investors and stakeholders.
Provide key financial insights to support management decisions.
CFOs are also critical contributors when it comes to mitigating financial risks that might implicate the business in one way or another.
Steering the company through acquisitions, mergers, liquidation, and changes in the operational and management structures.
Managing cash flow to balance incoming revenues and outgoing payments, ensuring financial stability and compliance.

These duties are umbrella terms for very comprehensive processes. There are small details that go into making sure the company’s finances are accurate. CFOs are a dedicated human resource that takes a meticulous approach to ensure there is no unbalance. Also, they are responsible for advocating sound financial practices throughout the organization and streamlining operations.

In short, businesses rely on the CFO’s leadership, forecasting, management, and supervision of financial matters. They work alongside other chief management such as the CEO (Chief Executive Officer), CTO (Chief Technology Officer), COO (Chief Operations Officer), etc., to keep the company running smoothly and on a positive growth trajectory.

When Does a Company Need a CFO

When assessing exactly when a business needs to hire a CFO, there are different situations. As we mentioned before, the decision depends on the organization’s financial health and what it wants to achieve in the near future. To aid this assessment, here are some instances when a small business might be in need of a CFO:

A CFO also plays a crucial role in providing strategic direction to the company, advising on long-term business strategies, and integrating financial planning with the overall business strategy.

Create a Financial Planning Model

A financial model is one of the most essential parts of the overall business model. Without a proper structure for the money that comes and goes out of the company, the management would be clueless about their company’s financial standing and whether they are making substantial profits or not. This can seriously implicate decision-making and increase the risk of financial loss and uncertainty.

A CFO will understand the overall strategy the small business owner wants to integrate into the business model. They will create a financial model that supports various goals across business functions. They will use their insights into the industry benchmarks to align processes such as budgeting, long-term financial goals, analysis, and forecasting with the business’s mission.

Remove Ambiguity for Underperforming Profitability

Unfortunately, businesses sometimes experience phases where their financial performance and profitability are not at the desired level. While some businesses can identify the cause of the performance dip, some might find it a bit difficult. The ambiguity makes it hard for the management to find effective corrective solutions.

A CFO can help identify the problem area and then suggest the right way to improve it. Improved visibility into the company’s profitability will allow the company to make better decisions. The financial reporting and statements made by the CFO will provide the CEO with detailed information and insight into the net income, revenue, cost expenditure, and sales. Armed with these details, the CFO will be able to reassess the financial situation and control costs to improve productivity.

Managing Finances During Rapid Growth

While rapid growth is a welcome change for all businesses, it also warrants the need for a CFO. Rapid growth means rapid changes in the company’s finances, business expansion, automation, and a need for additional funding and capital.

A CFO is trained to handle periods of rapid growth and deal with the complexity that comes with increasing revenues, complicated cash flows, and financial investments. They have the relevant knowledge to help interpret various trends and patterns. Also, they have a strong understanding and are able to find ways to acquire more capital to facilitate their growth.

If a small business owner handles the company’s finances themselves, rapid growth can bring changes that can be overwhelming. A CFO can take over financial responsibilities and alleviate some of that pressure. Additionally, they also have the expertise to navigate through frequent disruptions and dramatic changes in the business.

Guide the Company through Mergers and Acquisitions

Businesses often undergo mergers and/or acquisitions. These can be hard to navigate as they require detailed planning and forecasts of the potential impact the merger or acquisition might have.

A CFO will do their due diligence during this process and perform the financial, regulatory, and risk management duties as required. They will study, analyze, and interpret financial and performance reports of the parties involved and create sensible reports for the CEO. This aids the company in tailoring the terms and details in its favor. Besides that, a CFO will be better equipped to answer anticipated questions. This will allow them to shorten the process and make the transition period much more efficient.

Develop Strategies for Expansion

Introducing new products or extending product lines to a new market is a way companies stay relevant, meet consumer demands, and sustain their position on the competition. These strategies are also unavoidable as changing markets, technological advancement, and new industrial benchmarks warrant that change. But catering to this demand can be a bit tricky to implement.

A CFO can change that as they specialize in handling change. They help the company leverage its positive aspects to capitalize on opportunities and maximize returns. They do their research and then communicate the potential areas of growth to the management. This includes working with other members of the management and finding possible options for expansion in new markets and the impact it will have on the company’s revenue and earning potential. Additionally, CFOs play a crucial role in human capital management, advising on strategic areas and using data for effective organizational planning to ensure the company’s financial health and employee satisfaction.

Lacking Financial Data

Regardless of the company’s size and type, all decision-making relies on detailed financial statements and reports. Without financial information to back-up possible solutions, the decisions are mainly based on gut intuition and risk-taking. There is no denying there are times when gut decisions actually turn out positive, but the risk is extremely high. Besides, the increasingly aggressive competition makes it necessary for businesses to take calculated steps.

It can be difficult to make forecasts if a business lacks accurate financial information on cash flows and working capital. A CFO is able to not only generate financial reports required by investors and banks but also ensure these reports comply with generally accepted accounting principles (GAAP). They are aware of changing economic and industrial landscapes. With that information in tow, the CFO and other members of the management can make the right decision.

Sorting Out Tax Planning

Fulfilling and upholding tax obligations is one of the most important tasks all businesses have to complete. If a business fails to do so, they’re bound to face legal repercussions against them that can brandish their image. If a business finds they’re unable to plan and fulfill their tax obligations, it’s an indication they need a CFO.

A CFO acts as an advisor and has the expert-level knowledge to interpret changes in laws and regulations, analyze the tax benefits the business can obtain, and provide guidance. This includes ensuring compliance with the Financial Accounting Standards Board (FASB) guidelines, which is crucial for producing accurate and non fraudulent financial statements. This allows the company to fulfill their legal tax obligations. Also, this allows the leadership of the company to improve their current tax position and build and preserve assets in the future.

Better Understanding of the Cash Flows and Margins

Margins have an organization-wide impact and can change the entire financial statement situation at the end of the year. The CEO and management of the company might not realize how pricing strategies and similar changes impact the overall margins. If they have a CFO and finance team as advisors, they have a point of reference for consultation for future pricing decisions. Bringing discipline to margins is essential, as a lack of discipline can cause serious damage.

Similarly, the business must have control over its cash flow. If the business has no clue of how their money is flowing and what they can expect in the future, they can derail from their goal. A CFO and finance team can create accurate forecast reports and determine the proper strategy that brings discipline to the company’s finances.

From all that is said above, it is clear what situations might warrant the need for a CFO. However, the CEO is responsible for finalizing and implementing any strategy. The CFO is the right hand to the CEO, playing an important role in the planning of the process. Without the CFO’s input and recommendations, the CEO won’t be able to make effective decisions.

Since finance is their area of expertise, the CFO has more grounds on various financial processes, risk mitigation, and implementation of strategies in the organization. CFO Advisory services offer professional expertise to the company by directing the execution of strategies and closing the gap between the business’s day-to-day activities and financial direction.

We have compiled a guide that can educate you on when and why you need a CFO. You can find the guide here for free.

The post When to Hire a CFO: Determining When Your Business Needs One appeared first on Fully Accountable.

Financial Benchmarking Best Practices for Small Businesses

Chris Giorgio — Wed, 23 Jan 2019 20:05:57 +0000

When it comes to gauging your business’s performance and strategies to improve it, you might be ready to seek a financial benchmarking analysis for your business in your industry niche.

If you are a small business owner or new to the competitive landscape, you might be at a loss for what this financial benchmarking term is referring to. You might assume that it is one of the excess strategies businesses implement, which you can choose or reject based on your current state. We can assure you that it’s not. Read on below, and we will get into further detail about exactly what you need to know and should expect when it comes to eCommerce benchmarking best practices for small businesses.

Knowing where your business stands and how it measures up to the competition is key! Wouldn’t it be great if you could get a company financial performance snapshot with customized key performance indicators and achieve immediate insight into your Gross Profit, Labor/Marketing, New Income, Fulfillment Cost/Labor, Cost per Employee, and more?

Good news! Our developers just launched a powerful new financial benchmarking tool, and we want to offer you a chance to try it out! Get a sneak peek at where your eCommerce business is and how you measure up to the competition! Benchmarking involves running financial comparisons of your prices to your competition and the industry as a whole to see where adjustments can be made. This is an incredible offer, and all you have to do is schedule a call.

What Is Financial Benchmarking?

The inspiration for financial benchmarking comes from the Japanese and the business practices they undertook after World War II to improve their economy compared to others. The same principle applies to the corporate world. In the past few decades, the ever-evolving competition in all kinds of markets and economies has made benchmarking necessary. Without having set standards, KPIs, and metrics, businesses nowadays don’t stand a chance against the globalizing competition.

So How Does Financial Benchmarking Work?

In its very basic essence, benchmarking compares your company’s performance with the best in the industry. The term itself goes down to the core of the word “bench.” Topographers define it as an elevated mark or center point made by one player in the landscape. Simply put, it is a mark that others in the same landscape can use as a reference point to adjust their direction.

When it comes to defining financial benchmarking in the business context, it is measuring the corporate landscape to identify which player is outperforming all the others. That particular organization’s performance is the benchmark. It is then up to other players in the market to improve their financial performance to match it.

But with all that said, financial benchmarking involves running more than just a simple anecdotal comparison between you and your competition. Combing through a global market with thousands of companies and numerous metrics can be a bit tricky. In addition to comparing business practices, it takes meticulous detective work, comprehensive self-examination, and analytically savvy skills to execute. While this might sound like a significant amount of hard work, in the end, it is worthwhile.

While competitive or industrial benchmarking is the central focus of this article, here is a very brief look at the four main types of financial benchmarking popular in the business landscape:

Internal Benchmarking

This type of financial benchmarking is pretty self-explanatory from the name. It refers to the comparison of one business operation with another within an organization. Unsurprisingly, it is one of the easier ones out of the four types of financial benchmarking in terms of both research and strategy implementation. With the right accounting software, internal financial benchmarking is even easier.

Functional/Industrial Benchmarking

Going up the scale of difficulty, functional benchmarking involves comparing your company’s operations with similar companies in the broad range of the industry you are a part of. For instance, if you are in the FMCG industry, you can compare one of your operational areas to any company in the industry. It doesn’t have to be a direct competitor.

Competitive Benchmarking

Competitive and industrial or functional financial benchmarking are quite similar. The main difference between the two is that competitive benchmarking compares your operational performance with your direct competitors. As expected, this is the hardest type of financial benchmarking, especially in regard to research, as legal technicalities have to be considered. That said, it is also one of the types that results in major improvements in organizational productivity.

Generic Benchmarking

Lastly, generic financial benchmarking involves comparison with players in unrelated industries. Operations used by most industries, such as warehousing, are applicable in this type as they are used by a variety of industries. The biggest advantage of conducting generic financial benchmarking is that it provides an increase in access to information. Since you don’t have to involve your direct competition, fewer legalities have to be considered.

Learning what financial benchmarking is and all its types, along with acclaiming its virtues, is not enough. It’s up to the organization’s leaders to develop a well-thought-out, specialized, and organized investment strategy to implement benchmarking. Like you would do to implement and enforce any other program, organizations need to establish it as a business practice.

Some steps that can help you during your benchmarking efforts include:

Determining the Processes to be Benchmarked

It makes sense that you start your financial benchmarking journey by identifying exactly what operations you want to benchmark. You’ll be wasting your time and resources without associating any direction or goals with the areas you want to benchmark.

So, start by asking yourself questions like: Have organizational and departmental priorities been established? What level of change is the organization looking for? Does the entire system need to change/improve, or just one particular process? What are your capacities and limitations in terms of implementing the financial benchmarking?

Having a clear objective in mind before starting the project makes it that much more efficient. This way, when taking more critical measures, you will be better prepared to make actionable decisions.

Determining Meaningful Metrics

There are endless ways for organizations to measure their financial performance while benchmarking. Different areas of business use a plethora of metrics to define their performance. These metrics are also referred to as KPIs or Key Performance Indicators.

Depending on your industry and the goals you want to achieve out of the financial benchmarking process, you need to stick to a few meaningful metrics. For example, you can use revenue, costs of goods sold, sales volume, conversion rate, etc., for benchmarking earning potential. The main idea behind doing this is to have a clear picture of what exactly you want to research and measure for a competitor.

Operating Expenses: Tracks the costs required to run your business operations.
Profit Margin: Measures how much profit your company makes for every dollar of sales.
Net Income: Represents the total profit after all expenses and taxes have been deducted.
Bottom Line: The final financial position of the company, reflecting total earnings.
Cash Flow: Monitors the amount of cash moving in and out of your business.
Converted to Cash: The process of turning assets or sales into liquid cash.
Gross Profit Margin: Indicates the percentage of revenue that exceeds the cost of goods sold.

Finding Organizations to Benchmark

The competitive landscape for almost all industries has changed drastically in the past few years, which means more players in the market. With an increase in competition, it is essential that you identify the organizations that have processes that can adapt to meet your organizational goals.

It is quite obvious that the companies you choose to study should exhibit excellent performance in the very areas you want to target. But along with that, the business practices and the size and industry of the organization are relevant to yours. If you want to benchmark against your direct competitors, limit the list to the best ones. But if you are conducting generic benchmarking, you can think outside the box and venture into other industries as well.

Gathering Data

The next obvious step after determining organizations to benchmark is to do the research and collect relevant data. Keep in mind that whatever data you find and analyze at this stage, you’ll be using it to improve financial performance. So pay close attention to what data you come across and how you choose to analyze it.

Questions like – what are your competitors doing differently to distinguish themselves from the others? What kind of technology are they using to increase efficiency in their production? – and others like these will help you get the answers you were looking for.

You need to ensure that you are thorough with your research and cover every aspect you want in maximal detail. This way you’ll have relevant, accurate, and complete data in hand, allowing you to compare and construct actionable plans.

Analyzing Information

Simply gathering data is not sufficient for improving your company’s financial performance. To adapt strategies, you need to analyze and organize the data into meaningful information. This step involves analytical observation of the collected data so you can identify patterns and gaps in the processes.

The results that you achieve from the analysis will help you identify the areas where your organization might be lagging behind and the benchmarked one outperforms. This is the most important step of the entire financial benchmarking process as it is here where you’ll be able to get a clear picture of where your organization needs to improve compared to the industry standards.

This is essentially the moment for you to make pivotal changes in your business practices. You’ll know what relevant practices can be adapted and implemented in your organization, considering all limitations and constraints as well.

Determining Trends

In this step, you analyze all your findings of your competitor’s financial performance and your company’s past performance in comparison to it to make forecasts. Including the consideration of possible changes in the industry, you can make predictions as to how your organization’s performance will be impacted with and without the implementation of benchmarked changes.

By correctly implementing this step, you’ll be much clearer on the potential quantitative benefits of adopting the suggested financial benchmarking practices from the previous step. This step will also give you a clear picture of your performance without implementing the proposed changes.

Getting Consensus

Any change you’ll be implementing will have an organization-wide impact, whether directly or indirectly. Hence, it is important to get the consensus of the target audience, i.e., employees and management, for the need to implement changes. This step involves you doing just that and communicating the need and the potential outcome of enforcing the changes.

Having all the employees and management on board and on the same page will make the implementation much easier. No one will be left confused about the changes being made to processes. Seeking everyone’s consensus will create a sense of accountability in the organization, encouraging everyone to carry out the necessary changes.

Implementing Changes and Monitoring Progress

Once you’ve set an actionable plan, have consensus on the changes, and everyone is empowered to carry them out, all that’s left is implementation. Management and employees now need to execute the approved changes. This includes establishing timelines and ensuring that everything is undertaken within your company’s typical planning cycle.

While the changes might take time to present the anticipated results, you still need to ensure that you can chart the implementation and its progress accurately. Besides the timelines, control charts that record the measurements of the control factors should be prepared. They will allow you to track and monitor the changes and results.

If you correctly implement this step, you’ll be able to track the results and, based on that, retain or accept elements of the changes that were successful and reject the ones that weren’t.

Revisiting the Benchmarks

As you know, nothing is constant in this fast-moving and rapidly globalizing market. New developments are constantly added to it. To remain cutting-edge and make further improvements, one needs to revisit and recalibrate one’s financial benchmarking.

Staying on a continuous path of improvement and advancement is a commitment that requires a habitual reassessment of processes already in place. If an organization seems complacent with the implementation of these changes, it would create an assumption that one-time financial benchmarking provides permanent solutions. The reality is that this is a false sense of security that can cause serious damage to the company’s performance potential.

Ultimately, your organization’s commitment to improvements depends on the success of financial benchmarking. To sustain market leadership and have elevated performance, it’s necessary to include financial benchmarking as a permanent part of the company’s culture. Along with that, the realization that financial benchmarking will often only be temporary is also important.

Bonus Tip – Start Early On

When it comes to getting the most out of your financial benchmarking practices, starting early is conducive to improving financial performance. And no matter how cliché it might sound to say this, it’s never too early to start benchmarking. By doing so, you’ll have clear directions to spark positive changes in your organization and stay ahead of the competition.

While all kinds of businesses can benefit from financial benchmarking, e-commerce businesses need to pay closer attention. The industry as a whole, along with its sub-categories, is subject to changes daily. In order to garner success for your business, you need to stay ahead in the benchmarking game.

Our comprehensive guide on how to use KPIs to benchmark your business for success teaches you how to do that. You can find it here for free. Give it a thorough read to leverage your brand to grow and scale its business.

You can also take this opportunity to speak with one of our Award-Winning eCommerce experts and seize your complimentary benchmarking analysis by scheduling a call now!

The post Financial Benchmarking Best Practices for Small Businesses appeared first on Fully Accountable.

10 Tips for eCommerce Accounting

Chris Giorgio — Thu, 20 Dec 2018 11:15:37 +0000

Accounting is one of those painful necessities that you need to do in order to keep your business going. It’s boring and for the most part, business owners would rather talk about something more exciting like expanding their product line, but there’s no avoiding it.

In fact, eCommerce is the fastest-growing retail market projected to hit $4.058 trillion in sales in 2020. If you want to run a profitable eCommerce business, you must understand the accounting basics. As long as you grasp the basics, you’ll be knowledgeable enough to understand and question what the numbers tell you.

Fully Accountable is a full-service, digital accounting firm specializing in outsourced financial operations for eCommerce and technology companies. Whether you need outsourced, eCommerce accounting, or a fractionalized CFO, Fully Accountable is here to help. Below are ten key accounting tips for business owners to understand everything they need to know to run a successful eCommerce business.

What Is eCommerce Accounting?

ECommerce accounting is a term used to describe the collection, analysis, organization, and reporting of financial data related to an eCommerce business. As with accruing financial data for other industries, eCommerce accounting separates into three categories:

Bookkeeping
Reporting
Submitting tax returns

However, with eCommerce accounting, four critical elements differ from traditional accounting firms.

Where to find transactional data
In-depth understanding of inventory and COGS
Sales tax for online sales
Reducing foreign transaction costs

ECommerce Accounting Vs. Bookkeeping: What’s the Difference?

The difference between accounting and bookkeeping is that accounting requires:

More specific data
Financial audits
Financial forecasting,
Financial risk analysis
The preparation of financial reports and models.

Bookkeeping is a more simplified process that consists of

Financial statements
Transaction categorization
Invoicing
Account reconciliation
Balance sheet preparation
Payroll management
Account payables and receivables management.

Accounting is a more specialized procedure that requires more resources and expertise. While accountants may be able to fulfill the responsibilities of a bookkeeper, bookkeepers might not be able to provide the insight expected from an accountant.

Professional accountants equip your team with financial knowledge to make smarter, more informed decisions using advanced data metrics.

What Do You Need to Start Accounting for Your eCommerce Store?

To start accounting for your eCommerce business, you need three critical components:

Business Tax ID Number

Operating as a corporation or partnership, you need to request an Employer Identification Number (EIN) from the IRS. The Employer Identification Number (EIN) is a nine-digit number of your business that you can use in all of your tax documents. You can apply for your EIN online or receive it via email. If you are a sole proprietor, you can use your Social Security Number (SSN).

Business Bank Account

One of the most critical aspects of eCommerce accounting is keeping your business and personal finances separate. You can open a dedicated business account for your eCommerce store by setting up popular payment apps such as PayPal.

You should avoid using your business account for personal expenses but using your personal finances for business expenses classifies them as “out-of-pocket” expenses. Stay within reasonable grounds on your “out of pocket” expenses or you risk regulatory questioning.

Accounting Software

Accounting software apps and online services save you time on sales recording, expense management, report generation, and other tedious bookkeeping tasks. In fact, 50% of small businesses use accounting software to aid in their financial bookkeeping and accounting procedures.

Some popular examples of small eCommerce software are:

FreshBooks
QuickBooks Online
Xero
Wave
Kashoo
Sage

Choosing which software to use depends on your business requirements. Smaller companies might only require simple software such as QuickBooks Online to accomplish their needs. Others require more extensive accounting software needs.

1. Keeping track of your cash flows

The primary purpose of any business is to make money and in order to know exactly how much money you are making, you need to watch your cash; everything that comes in and out of the business. Be it eCommerce or any other business, most businesses will focus primarily on generating more sales to improve cash flow. While this method can be effective, there are other, more practical, ways to achieve this. The first step is trying and reducing any unnecessary expenses. Even cutting down on minor costs can have a significant impact on your expenditures. You also need to put some strategies in place for on-time payments. For example, be careful with the credit terms you offer to your customers. Unless they buy your products on a regular basis and have a good credit history, it is best to take payment upfront.

You also need to take note of the timing of your cash flows. For example, when are your bills and receivables due? When do you have to pay your employees?

In order to effectively manage your cash, you can try doing the following:

Track your expenses and earnings on a weekly basis. If there is a discrepancy between the two, you’ll know there is trouble.

Don’t make a payment on your bills until the due date. If there is a 30-day credit period, then you do not need to rush yourself. This is important because you may face a shortage of cash when you need it.

Offer monthly subscriptions or payment plans to customers so that money comes in on a timely basis.

Keep some amount reserved in your bank account in case of cash emergencies.

Lastly, you can improve your cash flow by negotiating better terms with your suppliers. Incentives like longer payment terms, bonus goods or services and discounts on repurchases can free up the cash flow for your business. You can also negotiate upon returning goods that go unsold within a certain period.

A key method that can help avoid cash flow issues is carrying out a cash flow forecast on a regular basis. Doing a cash flow forecast can be difficult, and you may end up with overly exaggerated assumptions on sales or underestimated expenses. If you need advice on how to build a cash flow forecast, you can reach out to our team of experts for advice.

2. Managing Inventory

Inventory includes both the goods that are available for sale, as well as, the raw materials you use to produce these goods. An unnecessary inventory buildup impacts your liquidity and will reflect badly on your assets. It’s imperative, therefore, that you keep your inventory in check and decide the minimum volume that you want to keep. The rule of thumb to follow here is – Keep only as much as you need.

You don’t want to run out of inventory because then you run the risk of losing sales. You also don’t want to have an excessive amount that goes unsold because again, you’re losing money.

There’s also the question of price fluctuations. If the market price shoots up, your inventory will have more value than it did the day before. The opposite can also happen. A good business needs to have a high inventory turnover rate in order to thrive. This helps minimize the impact of external forces on your sales as well.

Lastly, we have inventory shrinkage. Shrinkage is basically when you lose a portion of your inventory due to theft or damage. It’s important that you physically count your inventory in order to keep track of losses from shrinkage. Since eCommerce businesses usually operate out of warehouses or homes, the chances of shrinkage are considerably low.

3. Cost of Goods Sold

Your cost of goods sold is the cost incurred from the production of goods that are to be sold. This includes direct labor costs and the cost of materials used in production. Expenses incurred in the distribution and sale of the goods are not included in this. Calculating your cost of goods sold can be difficult, especially if you bought the raw material at different prices and are also paying different salaries to the people involved in production. The best way to resolve this is to use the Weighted Average Method. You can also use the Specific Identification Method.

Tracking the correct COGS numbers is important for your business as these figures play a critical role in accurate financial reporting. Incorrect COGS numbers will automatically reflect a higher or lower gross profit on your income statement and lead to false conclusions about the net income of your business.

4. Counting Other Expenses

Besides the cost of goods sold, there are other variable and fixed costs as well that factor in. Fixed costs are the costs incurred by your business regardless of whether you’re producing or selling anything. Some of the fixed costs related to an eCommerce business include:

Technology and software costs

Domain name and hosting (yearly payment)

Rent and utilities

Employee salaries

Variable costs are the costs incurred according to how much product you sell. These can include:

Data warehousing

Marketing and advertisement

Logistics

While it’s hard to go around your fixed costs, understanding the nature of your variable costs can help you minimize them and increase the efficiency of your operations.

5. Calculating the Break-Even Point

The breakeven point is when your revenue equals your expenses. When you hit break-even, your profit stands at zero, but you’ve managed to cover your costs with the sales generated. Calculating break-even involves factoring in your fixed and variable costs, the product price, and the contribution margin. The contribution margin is the value obtained after subtracting your variable costs from the selling price. In order to calculate the breakeven point, the following formula can be used:

Break-even Point = Fixed Costs/Contribution Margin

Where,

Contribution margin = Average Price – Variable Costs

If your break-even point is too high, then you can either raise your prices or lower your variable costs. This can be done by increasing your shipping charges, using cheaper materials, etc.

6. Tracking Your Earnings Before Tax and Sales

Now that you know the number of sales you need to break even, the next step is tracking your sales. Keeping track of your sales lets you know beforehand if you’re going to have an issue in generating the target revenue. It also helps you allocate money for business operations related to revenue generation. For example, suppose that you know that the number of sales required to reach break-even is 3,000 units. Half the month has passed and you have only sold 1,000 units. Since you’re tracking your sales, you realize how far ahead you are for this month’s sales target. The month isn’t over yet and making more efforts towards the marketing of your products might still get you there. Just make sure that if you’re allocating more money towards marketing your products, the sales generated must exceed the amount spent on marketing.

If you want to track your sales, then one way of doing this is linking Google Analytics to your website. There is even a plug-in available that is specifically designed for eCommerce sites to help you out.

Once you have calculated your sales, cost of goods sold and your expenses, you can now calculate your earnings before tax (EBT). This involves subtracting your cost of goods sold, operating expenses and your interest expense from total revenue.

7. Tax Rates

Next, we have taxes. It is everyone’s least favorite thing, but taxes are both unavoidable and complicated. If you sell different products and services, then it is best to consult a professional in the matter. Make sure to flag products if they are taxable. When a customer purchases it, you’ll need to provide them with a tax payable.

In order to stay organized, it is best if you categorize products according to those that require a tax payable versus those that are exempted from taxes. As you’ll find out in the next portion, keeping track of taxes is very important; otherwise, it can cause trouble down the road.

8. Tax Payments

Your tax payments primarily depend on the physical location of your business. As a starting point, however, you can assume your tax amount to be nearly as much as the tax you have collected from your customers. This means it’s important that you recognize the nature of that money and set it aside as tax and not a portion of your revenue. If you don’t, this could create problems for you when it’s time to make payments.

Mixing the tax amount with the actual price of the product can also make you lose track of the amount of profit you have made. To avoid such problems, you can consider opening a separate account for your taxes.

9. Balance Sheet

So far the things we have discussed either fall under your cash flow statement or your income statement. Now we have the balance sheet. The balance sheet is mainly for tracking the long term health of your company and to see how it is doing. The balance sheet is made by calculating your total assets, total liabilities and owner’s equity. Assets are anything of value that is under the control of your business. This may be cash, inventory, office equipment and/or accounts receivable.

Liabilities are the debts you owe to people. Both assets and liabilities are defined under a long-term and short term basis. Your owner’s equity is the difference between your assets and liabilities.

The balance sheet is important because it provides a bigger picture and can also pinpoint any inaccuracies in your income statement. For example, if your income statement says that you’re earning profits but your balance sheet tells you something else, it is possible that you have missed out on accounting for some expenses.

Remember that your balance sheet is only correct if your assets = liabilities +owner’s equity.

10. Too Complicated? Get Outside Help

In order to achieve long-term success in the eCommerce industry, it is imperative that you get your accounting operations up to mark. If having an internal department dedicated to the task feels too expensive, you can consider outsourced accounting as well. This will greatly reduce the cost of having an internal accounting department and get you in touch with a team of experts at a fraction of the price. If your company has crossed $1 million in gross revenue or is getting close to that mark, then it is likely that having a basic Bookkeeper who is only using QuickBooks is no longer sufficient for your operations. Relying solely on accounting software will also prevent you from making real-time financial decisions for your company.

It is also important to remember that as an eCommerce company, your core business is not accounting, and investing time and energy on something you can outsource only distracts you from focusing on your goals. After all, it is your core competencies that will help your business grow.

Having an outsourced accounting team allows you to achieve much more. Your business owners can make better decisions and focus on aspects like business growth, promoting individual excellence, and keeping in line with market trends to keep the business afloat. If you would like more information on the benefits of outsourced accounting and help deciding if it is right for you, then we have a complete guide for you. Click here to download it now for free.

The post 10 Tips for eCommerce Accounting appeared first on Fully Accountable.

5 Dangers of DIY Accounting

Chris Giorgio — Thu, 06 Sep 2018 14:02:46 +0000

Right now, the whole DIY thing is a huge trend. People are making their own farmhouse tables, home dÃ©cor, skincare products, and accounting… wait? that sounds out of place. That’s because it is, you shouldn’t try to do your own accounting if you have no experience with it. While you might be able to get away with making your own home dÃ©cor and skincare products, accounting is something you might want to leave to the professionals. So many business owners make the mistake of trying DIY accounting to save money and usually end up losing more money this way. I’m going to touch on a few reasons as to why you might not want to try to tackle your business’s finances alone.

1. Keeping up on Bookkeeping

This may seem like a task you can kind of just push to the side, but if you do that you will quickly fall behind. Most of the time with small businesses, when something is pushed to the side it is forgotten about and keeps getting pushed further and further back because it’s not as “important” as the current task.

Not having up-to-date books will cause:

Loss of profits, if unpaid invoices are left unnoticed
Ruined relationships with suppliers because of unpaid invoices, which leads to bad credit rating
More work come tax season

2. Relying too Heavily on Technology

The problem with trusting accounting technology, is you think it will do all the work for you. However, you still have to make that software work and know how to properly use it. Also, while one form of technology might work for one company doesn’t mean it will work for you and your company. I recommend doing some research first to figure out what will be the best fit for you and your needs.

3. Doing Tasks Last Minute

Many business owners think of accounting more as a chore and not so much part of their job. Since it’s not a top of mind priority, important deadlines are often missed and forgotten about. When accountants wait until the last minute it causes:

Missed deadlines – which leads to paying more money
Mathematical mistakes – which takes time to fix and cost money
No planning for the future – which leads to (you guessed it) paying more money

4. Poor Organization and Record-keeping

Small business owners often lack the time and skills to manage record-keeping and bookkeeping. This is often not something on their to-do list and on top of that it takes time away from the business. Fortunately, there are dozens of apps out there to help make organizing a lot easier. With a little bit of help, you can have a system that works great for your company in no time!

5. Trying to do it all Yourself

Doing all your accounting in-house is not something you should do unless you’re an accountant yourself. A lot of people do this because in their mind this is the most cost-effective, but in reality, time is money and they don’t have the time. For small business owners in particular, they need all the time they can get because usually, they are lacking manpower. Passing the accounting work on to an expert will allow you to focus on the important components of your business.

Moral of the story: Accounting IS an important task, don’t push it to the side and if you aren’t comfortable doing it yourself (sorry YouTube videos probably won’t work for this one) you should think about outsourcing. Being smart about it, in the beginning, will save you money in the long run!

Learn more about Outsourced Accounting!

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