Amazon is one of the most popular online platforms for buying and selling goods. The online store earns billions of dollars every month of which a major share goes to the third-party sellers. One of the best programs introduced by the online retail giant is Fulfillment by Amazon (FBA). The program allows you to sell products without investing in any physical infrastructure to store and transport them. The products are picked, packed, and transported to the customers.
If you are looking for a CPA for Amazon Sellers, please contact us at 407-502-2400, or email us at [email protected].
What’s best about the FBA program is that online business owners can greatly expand their business without investing an additional sum. The fulfillment network allows business owners to reach the maximum number of customers and maximize their profitability. Certain orders are eligible for free shipping which means additional profits for the business owner. In addition, you can sell the goods on lucrative online marketplaces including Mexico and Canada.
When it comes to managing the finance-related aspect of the online business, you should consider hiring Amazon seller CPAs. The accounting professionals can help you make sense of taxation code related to online sales. You will know the under-the-wrap tricks to maximize your tax savings. Best of all you will have peace of mind knowing that your finances are being handled by a highly experienced accounting professional.
What are the Benefits of Hiring Amazon Seller CPAs?
Amazon Seller CPAs undergo rigorous training and pass exams on financial accounting, business environment, auditing, and reporting to obtain the certification. They have a bachelor’s degree in accounting and finance management. Also, they have experience of working under a practicing CPA for a specific period of time. The knowledge, experience, and expertise of the CPAs make them an invaluable resource for companies to manage and streamline their accounting functions.
Here are some of the benefits of letting Amazon seller CPAs handle the financial aspect of the online business.
- Budgeting — Amazon seller CPAs can help create a budget for the company. The accountants can develop accurate estimates of costs and revenues. They can also determine profit drivers and the breakeven point for a company. Budgeting can help in the optimal utilization of limited company resources.
- Cash Flow Optimization — CPA professionals can also help improve the cash flow position. They can prepare projections of future cash requirements. This will allow you to ensure that the company will be able to meet important financial obligations. The accountants will provide advice on the best way to allocate cash to investing, operating, and financing activities with the goal of optimizing cash flow position.
- Tax-Related Advice — Accountants with CPA certification can provide tax-related services as well. They can make the tedious and somewhat confusing tax process easy-to-understand and simple. The professional accountants will make sure that the tax files are prepared in a timely manner. They also make sure that the return files comply with IRS requirements. What’s more, they audit the return files to ensure that there are no errors. This reduces the chances of paying hefty fees to the IRS for errors in the returns or late filing. Haring the certified professional will also help in maximizing the tax savings. The professionals will share little known techniques that can help a company to get the maximum tax breaks possible.
- Benefit in Other Ways — Hiring Amazon seller CPAs can provide benefits in other ways as well. The accounting professional will connect you with key personnel related to your business. They may be able to suggest persons who can turn out to be a valuable asset for your company.
- Keep Tabs of Financial Position — The professional CPA accountant will assist you in keeping tabs on the financial position of the company. You will know the accurate position of your company’s finances. This will help in making strategic financial decisions. The financial professional will help in monitoring business expenses, revenues, account receivables, and much more. Efficient management of financial resources will decrease the financial risk. It will reduce the chances of penalties and also prevent damage to credit reputation. Accurate financial reports will also prove invaluable for auditing purposes. Also, it will help you foresee potential losses and gains, and take appropriate decisions.
When You Should Hire an Amazon Seller CPA
You should consider hiring a professional Amazon Seller CPA in case the following condition applies in your case.
1. Keeping Track of Financial Records Take Majority of your Time
In case you find that most of your time is taken in managing financial related matters, you should consider hiring an Amazon Seller CPA. Instead of spending your precious time on performing accounting tasks, you should instead be focusing on making business strategies, improving product or service features, prospecting new clients, and expanding your business. It’s best that you leave the financial related tasks to the CPA experts. This will free up your time so that you can focus on making your business more prosperous. Also, it will allow you to create a work-life balance. You will find more time for taking part in favorite activities such as fishing, golfing, other pursuits.
2. You are Not Familiar with Accounting Terms
Are you confused about the term depreciation? Do you know what is amortization? Do you scratch your head when you come across the terms such as deferred charge, defeasance, defined benefit plan, ESOP, FIFO, LIFO, SEC FORM 1099, 10-K, Keogh Plan, and other similar accounting jargons? If the answer is yes, you should consider hiring an Amazon seller CPA.
An accounting professional will save you the trouble of searching online to decipher accounting statements. The CPA accountant will inform you in an easy-to-understand manner all the complex accounting terms. In fact, you don’t really have to understand the terms as the accountant will take care of all accounting related matters. What you should be only concerned about is how to improve the bottom line figure, which the net profit of your company.
3. You Don’t Know About Taxation Rules for Online Stores
Taxation laws are like a deep ocean that holds many surprises. However, it’s mandatory that you understand the taxation laws, especially regarding online stores. This will ensure that you are not hit by penalties and fines like a jolt out of the blue. Also, understand the complicated taxation laws will allow you to know how you can maximize the tax savings. This is where you should consider hiring an Amazon seller CPA.
The professional accountant will not only help you decode taxation laws but also help you to find out ways to boost profitability. The accountant can inform you about strategies that can allow you to gain tax deductions and exemptions. More importantly, the accountant will inform you of tax implications related to significant business transactions. This will ensure that you don’t get flabbergasted when Uncle Sam sends a notice containing a significant tax amount.
4. You Owe a Lot of Tax Money
You should hire an Amazon seller CPA if you find that the taxes go on increasing every year even if when the profits remain the same. Effective tax planning will ensure that you minimize your tax liability. Depending on the business activity, you will be taxed differently. There are many ways you can minimize the tax liability. A CPA accountant is well versed in strategies for minimizing business taxation. The professional will inform you about the steps that you can take to minimize the tax obligations.
5. Revenue is Increasing but Not Profits
Another time when you should consider hiring a CPA professional is when the profits are increasing at a much slower pace as compared to the revenues. The accountant can take a close look at the financial position and inform you about the reasons for slow profit growth. With the qualified advice of the accountant professional, you will be able to cut costs and boost your profit margins.
6. You Want to Expand your Business
When you expand your business, your customer base will also expand. Also, you have to take the services of additional vendors and hire additional staff. You also need to ensure compliance with laws relating to taxes, employees, and other financial matters in other states.
All of these things require number crunching and increased paperwork. This will make the task of handling your business difficult for you. In order to help manage the expanding business, you should consider hiring a CPA professional.
7. The Financial Reports take a Lot of Time to Prepare
Timely preparation of financial reports is important. In order to make sound financial decisions, you should know the accurate financial position of your company. If you want to obtain new loans, you need to know about the liquidity ratio, profit margin, and other related figures. A CPA professional can help in streamlining the accounting process that will result in the timely preparation of accurate financial reports. This will result in greatly improved financial related decisions making a positive impact on the company’s bottom line.
8. You Plan to Buy New or Sell Existing Business
An accountant can walk you through the process of buying a new business or selling an existing business. The accountant will inform you about the tax-related aspect of buying and selling a business. This will ensure that you are not hit by significant taxes from the IRS.
9. You Are Required to Audit the accounts
Finally, if a third-party agency such as an IRS or creditors requires an audit of your accounts, you should consider hiring an Amazon seller CPA. The professional accountant will save a lot of time and hassles involved in auditing the finances.
How to Hire the Right CPA for your Online Business
Most people tend to think that all CPAs have similar specialization. This is not the case. CPAs specialize in different aspects of handling business finances. Some are experienced only in taxation related matters while others specialize in broad financial fields. Make sure that you hire a professional accountant who has experience in handling accounts of companies similar to yours.
Here are some of the things that you should consider when hiring an accountant for your online company.
1. Determine the Company Needs
Do you require an accountant to handle just business taxes or other financial related matters? The answer will determine the type of services required by the accountant. You need to find out whether the accountant should handle sales invoices and accounts payable. You should consider listing the requirements on a paper. The accountant that you hire should handle all the accounting services required for your business.
2. Interview the Candidates
Before hiring a CPA for your online store, you should schedule an initial consultation. This can prove helpful in determining whether the accountant will meet your business needs. During the initial consultation, you should ask about the background and experience of the accountant. Make sure that you ask whether the accountant has handled accounts of online stores before. You do not want to hand over the accounting task to a person who has no experience in handling accounts of online stores.
Accounting is not just a number crunching process. There is a lot more to accounting than making financial statements. The accountant needs to know the tax laws and regulatory requirements relating to your business. Also, the accountant should have the ability to devise strategies to maximize tax savings. This is not possible if the accountant has no experience in working with companies similar to yours.
3. Have the Right Skills
Make sure that you hire an accountant who has the required skills in handling accounting matters. If you want the accountant to prepare a budget for your company, the accountant must have cost accounting skills. In case you hire an accountant to appraise projects, the accountant must be well worse in NPV, IRR, MIRR, Payback period, PI, and more to properly evaluate the projects.
An accountant must have complete command of the local taxation codes if you want the professional to handle tax-related matters. In addition, if you want the accountant to provide you with advice to improve your company’s financial position, the accountant must have a flair in using ratios (acid test ratio, days sales outstanding, inventory turnover, etc.) to obtain key health indicators.
4. Provide Advisory Services
If you want the accountant to provide advisory services, the accountant that you pick to handle for your company should know how to utilize the knowledge of tax situation, business environment, and financial statements to create a business financial plan. The accountant should know the financial implications of expanding the business.
The accountant should also know how to look at the entire picture when giving business-related advice. The CPA professional should know how to break up the sales figures to detect problem areas. Focusing on just one area of the business won’t help in revealing problem areas. By breaking the sales figure, you will realize that you are making a profit on one section of the business but a loss on the other. For instance, you may be making a profit on the sale of furniture items but a loss on the sale of personal care products.
5. Get a Referral
The best way to find the right CPA professional is to get a referral. You can request the accountant to provide you with a list of references. Also, you can read online reviews to find out about the reputation of the accountant. Avoid hiring an accountant if most of the past customers give negative reviews.
6. A Good Fit for the Business
The accountant that you hire should be compatible with your personality. During the initial consultation, you should find out whether you are comfortable communicating with the accountant. In addition, you should make sure that the person you are talking to will actually handle your company accounts. There is no use wasting time on consulting with an accounting professional who won’t handle your accounts.
7. Accountant Fees
Lastly, you should ensure the fees charged by the accountant. Most CPAs charge by the hour. The charges are more for complex tasks. At this point, you should remember that cheap is not always the best option. If the accountant has no relevant experience, you should not waste money on the person. Instead, you should focus more on the expertise of the accountant in handling accounts related matters.
At the end of the day, how much you can afford to pay the accountant will determine what quote is acceptable for you. Consider getting quotes from different experienced accountants and select the one whose fees are affordable for you.
Business owners should not underestimate the importance of CPAs. The title is awarded to those individuals who have passed a rigorous standardized test and fulfilled training requirements. They represent the premium accountants whose services can greatly benefit your business.
If you are looking for a CPA for Amazon Sellers, please contact us at 407-502-2400, or email us at [email protected]. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for almost 20 years. Our tax accountants and IRS enrolled agents (IRS ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, ITIN number, incorporations, and nonprofit 501c3 tax-exempt. (Freedomtax’s accounting and tax professionals are NOT CPA’s. CPA services provided by a third-party provider.)