Whether you are looking for your first accountant for your eCommerce business, or thinking about switching to a new one, it is easy to get overwhelmed and wind up in a state of analysis paralysis. However, there are only three things that you really need to focus on when weighing your options:
- Their accounting background and technical skills
- How much experience they have with eCommerce businesses
- The stage of your business
Evaluating their accounting background and certifications is relatively standard practice. If you want a refresher, check out this post on questions you should ask.
So, in this post, we’re taking a deeper dive into the latter two items, and sharing everything you need to know when choosing a Shopify CPA.
Let’s dive in.
Shopify business – Under $20k in monthly sales
Chances are, you are just getting started and might still be running your business as a side hustle while also juggling your day job. At this point, all of your focus is on sourcing and finding cashflow for your products, finding product-market fit, and marketing your business.
A specialized eCommerce accounting firm is likely overkill at this stage. Focus on getting set up with cloud accounting software, like Xero, and finding a local accountant that can help you incorporate your business, file your tax returns, and you can turn to whenever you have one-off questions.
This will likely cost you anywhere from a couple hundred bucks to maybe a thousand each year, but you’ll also gain a key understanding of where money is flowing into and where it’s bleeding out of your business.
Shopify business – $20k – $85k monthly sales
Your eCommerce business is now bringing in 6-figures in annual revenue. By this point, you’ve likely made the leap to working on your business full-time (or have plans to!) and may even have a few employees and contractors.
While your accounting needs are becoming more complex, it probably doesn’t make sense to shell out a thousand dollars or more per month for a specialized eCommerce accounting firm quite yet.
Here are the things to consider if your Shopify business is doing six-figures in annual revenue.
- Tax planning and filing
- Monthly bookkeeping
- Financial report setup and monitoring
- Diversifying revenue streams (like being less reliant on Amazon and getting more sales on your Shopify site)
- Sales tax filing + compliance (through an app like Taxjar)
- Managing payroll
- Inventory demand forecasting
Depending on what accountant or firm you decide to go with, you can expect to spend anywhere from $100 – $1000 per month.
Shopify business -$85k – $2M in monthly sales
At this point, you are making seven figures or more in annual revenue. If you are still using a general accountant, you are probably feeling the pain or at least have a lingering sense that you could be missing things that you don’t even know to ask.
This is where working with a specialized eCommerce accounting firm – such as Bean Ninjas – can be beneficial.
Your needs are more complex and nuanced than simply taking care of your books each month, handling payroll, and preparing your taxes.
Here is what you should be considering at this stage:
- Working with a firm that offers virtual CFO and/or financial controller services
- Enhanced financial reporting and modeling
- Cash flow forecasting
- Inventory forecasting
- US sales tax management and filing (anywhere you have nexus)
- Dedicated specialized eCommerce accountant / support you can ask questions to whenever you need it and get timely responses back
Plus, you might be thinking about making your first business acquisition, taking funding, opening up a warehouse in another country, or perhaps thinking about selling your business for a life-changing amount of money.
With big financial decisions that are hard or next-to-impossible to undue, you don’t want your business to be a guinea pig for a general accountant. You want to work with someone who knows the nuances of the industry, has established relationships with business brokers, and has worked with dozens or more Shopify businesses just like yours.
Just 25 years ago, the only way to get this level of service would be to shell out $350k or more in annual salaries and benefits for an in-house CFO.
As the accounting industry has evolved, specialized third-party eCommerce accounting firms can provide vCFO services along with financial help for a tiny fraction (i.e. usually a few thousand dollars per month) of the costs of hiring and managing a full-time CFO.
Shopify business – $2 million plus in monthly sales
When you are doing $24 million or more in annual sales, you probably already have an in-house finance team member or a few on staff.
In fact, if you haven’t hired a full-time controller yet, it is probably overdue, especially if your business is expanding globally, acquiring other businesses, or taking VC funding.
Your controller is typically the first in-house finance team hire. As your company grows, you’ll bring on in-house accountants and eventually a CFO.
The biggest thing to consider as you expand your team is cultural fit. Any hire you bring into your business should reflect attitudes, values and beliefs in line with the core values and culture of your organization. Nothing worse than working with an accountant you simply can’t get along with as you don’t see eye to eye on your core beliefs!
Pro Tip: Here is what to consider as you start to build your in-house finance team.
In sum, there is a lot to consider when it comes to choosing an accountant for your Shopify business. It is key to think about the stage your business is currently at, your specific accounting needs, and any challenges you may have.
Whether you are looking for a virtual CFO, accounting, or bookkeeping support, we can help. Schedule a free call with a Bean Ninjas team member today.