Why You Need an eCommerce-Savvy Accountant to Drive the Success of Your Online Business

Introduction: When eCommerce Meets Dollars and Cents  

Australia’s eCommerce industry is booming—no, scratch that—it’s roaring louder than a V8 engine on the open highway. Valued at an eye-watering $68 billion as of 2022, the digital marketplace is where small- and medium-sized businesses (SMBs) are flexing their entrepreneurial muscles. Platforms like Shopify, Amazon, and eBay have turned us all into overnight shop owners, shipping products and dreams to customers both local and global.  

But here’s the plot twist: while the growth is exciting, the sheer complexity of eCommerce finances would make anyone’s head spin faster than tracking your steps in a three-day closet sale marathon. Multi-channel revenue streams, cross-border tax laws, GST compliance, hidden fees… it’s basically a recipe for sleepless nights if you're trying to DIY your books.  

Here’s the kicker: traditional accountants are like Swiss Army knives in a world where you need a laser cutter. To truly thrive in this demanding (and often head-scratching) sector, you need an accountant who gets eCommerce—someone who speaks your language of abandoned carts, platform fees, and flash sales.  

“Spoiler Alert: Your run-of-the-mill accountant isn’t up for the eCommerce challenge. It’s time to bring in a specialist who can decode your financial puzzles and make them work to your benefit.”  

1. Why Is eCommerce Accounting Like Herding Cats?  

Simply put, eCommerce isn’t your average retail gig. If brick-and-mortar retail is a leisurely stroll, eCommerce is a rollercoaster bolted to a rocket ship.  

- Multi-Channel Madness: Selling exclusively on one platform? Most eCommerce entrepreneurs are juggling multiple sales channels—Shopify, Amazon, eBay, TikTok Shop, their own website, and a partridge in a pear tree. Each one comes with its own payout delays, fee structures, and reports that would confuse even Sherlock Holmes. Keep track of it all? Good luck.  

- Costs You’ve Never Even Imagined: Standard expenses? Sure, they’re there. But add in online ads, payment processor fees, shipping costs, and let’s not forget the returns! A staggering 30% of all online purchases end up back at your doorstep faster than a customer can say, “Where’s my refund?”  

- Taxing Taxes: Navigating domestic GST on sales? Manageable. But when you add cross-border sales and rules for digital products, your accounting turns into a spaghetti bowl of regulations waiting to trip you up.  

Example: Picture this: Kylie, an Aussie entrepreneur, sells her handmade activewear on Shopify and Amazon. Shopify pays her out in three days, minus transaction fees, but Amazon deducts fulfillment and marketing costs upfront. Reconciling all that manually? It’s like doing sudoku blindfolded—and that’s on a good day.  

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2. Why Partnering with an eCommerce-Savvy Accountant Is Like Having a Superpower  

An eCommerce-savvy accountant doesn’t just crunch your numbers—they elevate your business like a viral post boosting your follower count.  

- Laser-Focused Financial Tracking: Forget Excel DIY disasters. A specialist accountant will decode every Shopify payout quirk or Amazon advertising fee with the precision of a chess grandmaster. Your balances will never be off by that amount ever again.  

- Tax Compliance, Done Without Tears: Did you know you could get slapped with an ATO penalty if you don’t properly report the GST on overseas shipments, digital goods, or shipping costs? A specialist ensures you check every box while maximizing deductions like a pro.  

- Profitability That Actually Makes Sense: Many eCommerce owners realize too late that they’ve been underestimating variable costs like packaging or returns. An expert can help you pinpoint exactly what’s eating into your profits and stop the financial bleeding before it turns into a flood.  

Take Note: Tools like A2X and Xero integrate directly with your platforms to take the manual grunt work off your hands. Think of them as the ultimate financial personal assistants—minus the coffee runs.  

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3. Common Financial Booby Traps—And How to Avoid Them  

Without the right guidance, eCommerce finance mistakes can sneak up on you faster than your toddler grabbing your phone. Look out for these pitfalls:  

- Zombie Inventory: Dead stock sitting idle in your warehouse might as well play the theme from The Walking Dead. Whether it’s over-ordering or forgotten stock, managing inventory poorly is like leaking money out of your back pocket.  

- Cash Flow Crunches: Got surprised by payout delays from Amazon or Afterpay? Suddenly, you’re scrambling to pay for inventory or shipping just as sales roll in.  

- Growing Too Fast, Too Soon: Scaling is sexy until overhead—hello, warehousing fees—chews into your profit margins. Don’t let “bigger and better” derail your bottom line.  

Pro Tip: Work with your accountant to create a crystal-clear cash flow forecast. And implement inventory management software before your warehouse starts to look like a chaotic Costco.  

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4. Real-Time Reporting: Your Numbers, Your Command Center  

Here’s the thing: your financial reports shouldn’t feel like a history lecture—they should be your crystal ball.  

An eCommerce accountant can offer real-time dashboards that turn your raw numbers into actionable insights. These metrics let you make sharp, data-driven business decisions:  

- Customer Acquisition Cost (CAC).  

- Lifetime Value per Customer (LTV).  

- Refund rates, Advertising Cost of Sales (ACoS), and Average Order Value (AOV).  

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5. The Wallet-Denting Risks of Getting It Wrong  

Running an eCommerce business without the right accountant is like venturing into the Outback without a map—you’re bound to hit trouble.  

- ATO Horror Stories: A small Melbourne startup selling globally thought they were excused from GST on international shipping. Spoiler alert: they weren’t. Cue hefty penalties and late fees.  

- Wasted Deductions: Forgetting to claim expenses like platform fees or online software subscriptions is like leaving free money on the table. A sharper accountant would never let that happen.  

Pro Tip: Plan regular audits with your accountant, especially during peak sales months like EOFY or Black Friday, to avoid nasty surprises.  

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6. How to Find The One—Your Perfect eCommerce Accountant  

Finding an accountant who truly gets eCommerce isn’t just about ticking boxes—it’s about finding someone who speaks your financial love language. Here are the key traits to look for:  

- Real-World eCommerce Experience: Ever managed cross-border GST on digital goods? If your accountant has, they’ve passed the vibe check.  

- Tech-Savvy: They should be comfortable with Xero, A2X, or inventory software. Bonus points if they understand analytics dashboards.  

- Tax Wizardry: Look for a Jedi-level grasp of Australian GST rules, especially for online businesses with an overseas reach.  

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Conclusion: Unlock Your eCommerce Potential  

Running an online business comes with enough challenges—you don’t need financial confusion added to the list. With an eCommerce-savvy accountant in your corner, you’ll master compliance, squeeze every last drop of profitability, and set yourself up for scalable, long-term success.  

Let’s connect! Contact ZonKeepers today for a free consultation and let’s create a game plan that makes your eCommerce business unstoppable.  

Cash vs Accrual Accounting: What’s the Difference?

Why we use accrual accounting

The key difference between cash and accrual accounting lies in the timing of when revenue and expenses are recorded. In accrual based accounting, the revenue and expenses are recorded when the occur. However, in cash based accounting, revenue and expenses are recorded on the day the cash exchanges hands.

Accrual Accounting is the most commonly used method of accounting. Revenue is recorded when it is earned, rather than when it is paid. In the context of an Amazon business, this means that sales are recorded on the day of purchase by the customer, rather than the day that Amazon deposits money into your account. Likewise, expenses are recorded on the date that they occur, for example, the storage fees for July are counted as a July expense, even if you don’t pay for them until September!

Cash Based Accounting is far simpler, however it is not as accurate – it could show that you’re in profit, simply because you have outstanding invoices. As the name implies, sales are recorded on the day money is deposited into your account. Therefore, with cash accounting for an Amazon business, one day, every fortnight it would show two weeks’ worth of sales on a single day. Likewise, any expenses due would be counted on the day that they’re paid.

Think about cash accounting for an inventory business… You would incur huge ‘expenses’ in the months which you buy stock, putting huge ‘dips’ in your profitability.

Consider the following example:

Sue has a product which costs $6 (landed), sells for $30, and she buys 1000 units at a time. In January she purchases her first order, and is selling soon after. In March she sells 50 units, April 100 and May 150, slowly building.

She orders stock every 3 months.

In a cash accounting method her books look like this:

Which graphically can be represented as:

Yes, the cash on her Xero file exactly matches her bank statements, but she has no real visibility as to her profitability. If she buys a heap of stock, suddenly her ‘profits’ nosedive.

Using the same example, when Sue does her books using the accrual method, her books look like this:

Graphically represented as:

Obviously, Sue’s books have been simplified for the sake of illustration. What it allows you to see is that her profitability is directly related to her sales and expenses incurred within that month. The main difference is that stock is counted as an expense only when it is sold.

As it accounts for things on the date that they occur (not the date they are paid), when accounting with the accrual method, the balances in Xero may often not match exactly with the physical amounts that are in your bank accounts. However, it does show a much more accurate picture of your business performance and financial position. It allows you to make financial decisions with far more confidence.

Also, it is VERY important to note, if you’re considering an exit… any business broker will need your accounts in the accrual method.

Xero, MYOB, Quickbooks or Excel? What do I use for accounting in my ecommerce business?

Choosing the right accounting software can be quite tricky especially if you haven’t used one before.

Most Aussie businesses usually start with Excel then choose between Xero, MYOB, and Quickbooks. If you’re serious about your e-comm business you should just really skip Excel and, invest in a dedicated accounting solution.

We’ll compare these programs in this article and help you pick the best solution.

Let’s start:

Excel

Excel is not really a long term solution, however it deserves to be on the list as this is usually where most small businesses start.

As a way to track expenses before you start trading, it is somewhat adequate. Excel does not offer much for bookkeeping – there is obviously no double entry system, so mistakes can be easily made, and are usually difficult to detect.

The platform doesn’t offer historical or real-time data, which can make bookkeeping a tedious job. Expect to do most of your work manually as Excel does not automatically generate reports.

Pros:

• Templates can make the job easier

• You can get a free version (limited features)

• Available both as an online and offline software

Cons:

• More prone to errors due to manual nature

• Difficult to manage cash flow

• Not possible to automatically import data from bank accounts

Xero

Xero is undoubtedly one of the most popular accounting softwares out there. It's used by over 2 million customers and is the go-to option for many small businesses and professional accounting firms.

Xero hits the bull's eye when it comes to integrations, with add-ons available for nearly every ecommerce platform out there. So, you can be assured that wherever your ecommerce business evolves, your accounting system will be able to integrate this means less hassle and less manual labour.

Pros:

• Excellent customer support

• Apps for iphone and android

• Allows unlimited users

• Offers more than 800 integrations making it perfect for e-commerce businesses

Cons:

• There's a steep learning curve - some time is needed to familiarise yourself with the program

Users can get their hands on it for free as the software comes with a 30-day trial. Since it’s an online tool, you will not have to worry about hardware, it will work on any computer, and there is no need for backup, as it lives in the cloud.

The cheapest package starts at $25 per month, however most e-commerce sellers will need the $65 per month plan, as it supports multiple currencies.

MYOB

MYOB was introduced in the early 1980s, and it ruled the Aussie accounting landscape before the introduction of cloud-based solutions. To keep up with competitors, MYOB has released its own cloud-based packages – MYOB AccountRight and MYOB Essentials.

For Australian businesses selling in the USA, a multi-currency option is a must have feature. Unfortunately, the only MYOB solution with a multi-currency option is MYOB AccountRight Premier, which is their most expensive solution at $140 per month.

Pros:

• Offers phone support, seven days a week

• Can connect two company accounts

• Offers unlimited payroll

Cons:

• MYOB AccountRight is only suitable for Windows users

• Expensive at $140 per month

At the time of writing, MYOB is offering 50% off for 3 months, and a free 30-day trial, however, it is still significantly more expensive than Xero.

Quickbooks

Popular in USA, Quickbooks has recently expanded to Australia. Like Xero, they offer a cloud-based software for a monthly subscription.

Pros:

• Excellent customer support

• All plans include free Android and iPhone apps

Cons:

• Can be a little tricky to use

• Does not as many integrations available as Xero

The cheapest Quickbooks plan which supports multi-currency is The Essential Plan, $35 per month. This supports up to 3 users and also allows users to manage suppliers and bills.

The most expensive plan costs $50 per month and comes with the platform's newest feature called- tracking project profitability. It can manage more than 1000 contractors and track inventory.

Best Accounting Software for Small Businesses: Conclusion

Xero is undoubtedly the best accounting software for small businesses. Their support is unparalleled, and because it’s so widely used, the forums are a great source of information. Notably, it’s the integrations that really set it apart from the rest. With Xero you don’t have to worry about the marketplace you’ll be selling into in 3 years, as you can be fairly sure there’s a Xero integration for it. Without a Xero integration you’d have to manually import all of the transactions, line by line into your system. Painful!

Additionally, if you’re selling overseas, you need to be sure that your system can handle multiple currencies. Xero easily handles multiple currencies.

In our opinion, implementing Xero is a must for any small business.