There is a great deal of overlap between normal business accounting and e-commerce accounting.

Essentially, most accounting tasks that need to be undertaken for a business also apply to the accounting practices of an e-commerce business, but there are complications specific to e-commerce accounting that a specialist e-commerce accountant will know how to handle, such as platform fees and other deductions, as well as navigating the complexities surrounding UK and foreign VAT.

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Why does e-commerce accounting differ from any other retail business?

In a retail business without e-commerce, the consumer buys the product, pays the retailer, and the retailer receives the payment, making the relevant declarations and deductions.

In an e-commerce business, things can differ as the platform or marketplace, like Amazon or eBay, could make deductions before the money is handed to the retailer, and how they are treated for tax purposes differs.

Also, in a traditional brick-and-mortar shop, the consumer buys the product in the location of that store and therefore, all local taxes and legislation apply. In an e-commerce business, especially those with digital downloads, the purchase may be happening abroad, and this is why you need the best e-commerce accountant for your business to be able to handle all the more complex international VAT and tax rules.

Getting any of the above wrong means that you could be over- or under-declaring taxes and either be eligible for a refund or, worse, a fine.

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How else can a specialist e-commerce accountant help?

In addition to making sure you are compliant; you want your e-commerce business to thrive. An e-commerce accountant will help you analyse and prepare your financial data in order to help you grow and expand your business, helping you track the profitability of your different platforms and products. 

To read more about e-commerce accounting and find out why MWA is the best e-commerce accountant for your business read more here.

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