From XU Magazine, 
Issue 31

What are outsourced accounting services?

Outsourced accounting services can be the best solution for e-commerce sellers to meet their financial regulatory obligations. This WorldFirst overview will outline the benefits of seeking outside help with accounting in e-commerce.

Think of accountancy as the backbone of any company. Your company needs reliable accounts data to make informed financial decisions to stay in operation. Outsourced accounting services frees up e-commerce sellers’ time and insulates them from unnecessary risk (such as accidentally filing an incorrect tax return).

Outside help with your accounting can also reveal opportunities to increase business profits  — opportunities you may not have noticed if you’re busy doing every other task to keep your company afloat.

Small business e-commerce sellers can access a wide range of accounting technologies to make the bookkeeping process easier.

This article outlines how outsourced accounting services and technologies can replicate the benefits of hiring an in-house accounts team for less cost.

Why do many online sellers personally handle their accounts admin?

When you are just starting as an e-commerce seller, you may juggle another job, raise a family, or have other things you like to do alongside your ‘side hustle’ business.

It’s easier to start turning a profit through e-commerce selling than ever before. There are tools online that can set you up with a functioning e-commerce website in minutes. You can also start running PPC and social media ads for a minimal cost and make your first sale within the first day of opening up shop.

With a plethora of automated tools to help you manage every aspect of running an online business, very few part-time e-commerce sellers see the advantages of hiring outside help in their accounting.

To use an illustrative example:

An inexperienced online business owner –– perhaps in their first few months of business –– may be mesmerised by the money coming in and oblivious to the responsibilities that come with online selling. Filing their first tax return, for instance, might feel like a far-off obstacle that they may view as being as easy as completing their first product listing, right?

Well, not exactly. If you, so far, have not paid a second thought to your accounting records, you (like the inexperienced seller) will be in for a shock when it comes to meeting your first tax return deadline. Picture yourself sitting in front of a computer screen with endless spreadsheets, surrounded by piles of receipts and bank statements.

Stressing over your accounts recording procedures is certainly not an efficient use of your time. So, make sure you prepare for the annual tax return deadline by accurately managing your small business bookkeeping as you go. We promise you; it will make your life so much easier.

What are the benefits of outsourced accounting services?

As mentioned previously, you can outsource your accounting admin to an accountant or bookkeeper. Alternatively, you can use technology to automate parts of the accounting process.

Consider the following benefits of outsourced accounting services before deciding if you want to go the human or software route in managing your finances. You may even choose a mix of both solutions as the best accounting option for you.

1) Cloud-based accounting tools sync with existing technologies

Automation has made many aspects of e-commerce operations easier to manage daily. You have tools to help you analyse KPIs, run ads, create artwork, check copy, handle store inventory etc. Many of these programs run on subscriptions, and some even include AI functionality that allows programmable bots to spend money without the need for a human to approve each transaction.

To keep up with all of the costs of running these technologies, you need a way to record the expenses instantly in your accounts records. Cloud-based accounting software like Xero can automatically log all of these financial activities directly from your bank account or payment gateway.

2) Outsourced accountants can Identify growth opportunities

Some say accountancy is like a language –– your account records tell a story of how financially stable your business is and reveal areas where you may have inefficiencies that need to be fixed. A qualified accountant can take all of your financial information and provide helpful tips on cutting costs.

An accountant can also gather all of the financial information you need to successfully apply for business loans or other finance packages to help your business grow.

3) Accounting automation lets you share financial data quickly and easily

If your business grows from a one-person operation to two or more people, you can quickly lose track of your financial transactions.

All team members need, at the very basic level, a process to self-report their financial data. However, to minimise account manipulation or human-error in recording costs, it is highly advisable to seek an automated accounting system to flag instances of mistakes or inconsistencies.

4) International tax compliance becomes easier with expert help and AI tools

Automated accounting tools are fast becoming a regulatory requirement for companies filing taxes worldwide. For example,

under the UK government’s

Making Tax Digital scheme, which was introduced in April 2022, businesses making over £10,000 a year in income were now required to file digitised tax records to HMRC.

Business owners trading abroad also have to submit records and pay taxes to international governments –– regardless of whether a jurisdiction has enacted digitised tax filing mandates yet or will do so soon. If a business owner is inexperienced in accounting or doesn’t have outsourced help, they can quickly get bogged down in international standards and accounting practices.

Additionally, in instances where an internal revenue service wishes to conduct an audit on a company, the specialised skills of an international accountancy firm are essential in ensuring the process runs smoothly.

For these reasons, aside from making accounting and bookkeeping more straightforward, automated tools and experienced accountants help businesses stay compliant with changing tax regulations. With the help of AI tools and expert accounting professionals, businesses of all sizes can trade internationally and remain confident that they meet the highest regulatory standards.

Outsourced accounting services like WorldFirst help minimise business risk

If you are processing payments in multiple currencies, you need clear records of financial transactions to minimise the business risk of changing currency exchange rates.

A dip in currency value from transferring one currency to another, if left unchecked, could end up negatively impacting your business’s bottom line.

With an account from WorldFirst you can lessen the impact of FX volatility by managing risk with Forward Exchange Contracts. Whether you’re looking to expand your business, take advantage of prevailing exchange rates, or speed up supplier payments WorldFirst have the tools to help your clients grow. Discover how your accountancy or bookkeeping practice can benefit from partnering with

WorldFirst or how we can help your business.

Call the Accounting partnerships team:

+44 (0)207 801 2388

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