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E-commerce accounting may appear simple, but that is misleading. Online businesses often encounter difficulties when their accounting firm must handle rapidly growing transaction volumes.
The e-commerce sector
E-commerce means electronic trade: products and services ordered online, often through manufacturers’ or providers’ shops or large platforms bringing together many sellers.
Online shops are not the only example. Internet currency exchanges, betting and electronic banking also fall within the definition.
The main models are B2B, sales between organisations; B2C, retail to an individual customer; C2C, transactions between individuals; and C2B, individuals offering goods to businesses.
The sector benefited from the popularity of online shopping, particularly during the pandemic when physical shopping was restricted. Many consumers became accustomed to it, and demand remains strong as new businesses enter.
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Document volume
Estimate monthly documents covering purchases, shipping costs and sales invoices or bills to select an appropriate accounting package. Orders can increase quickly, so one fixed estimate may not last. The firm’s offer should scale and allow the package to change as the business develops.
Bills or invoices?
VAT taxpayers must issue invoices. Some activities are exempt while others use a 0% rate; these are different tax concepts with separate rules.
A bill is another accounting document, where the service is cheaper by the VAT rate. E-commerce, including dropshipping, may also involve VAT-margin invoices, which require individual assessment by the accountant.
Business form
Accounting costs often depend on the legal structure. A sole trader generally has lower costs and is recommended for people also employed elsewhere or entitled to reduced ZUS contributions.
A company has important advantages but raises accounting costs and requires accounting books. A reliable firm should indicate the most suitable structure.
Sending documents
Consider how documents move between client and accountant. Many firms still require paper delivery, which can be inconvenient with high e-commerce volumes. Look for electronic submission or at least courier delivery.
Process automation
Sellers using several platforms should look for specialist converters that automatically import platform data into accounting software. This reduces costs, saves time and simplifies the process.
Full digitisation and automation mean:
- Saving time and money: the accountant handles regulations and settlements while modern tools let you sell where you choose.
- Avoiding penalties and interest: support helps with timely, effective tax settlements across Europe and reduces concerns about cross-border formalities.
- Full business control: integration brings information, reports and other services together in an intuitive application available wherever there is internet access.
- Professional customer service: integration helps resolve problems and answer questions faster, with direct order visibility showing shipment status.
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Summary
An e-commerce accounting firm needs to handle growth as well as today’s transactions. Scalable packages, convenient document transfer and platform integrations can reduce manual work and give the owner better visibility of the business.
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