Sales Tax Fundamentals
Get up to speed on the basics of sales tax
Expert Advice for Aspiring eCommerce Accountants
byNovember 1, 2020
We talked to a lot of accountants and tax preparers during the making of TaxJar. What we soon noticed was that helping eCommerce sellers make sense of their finances (and especially sales tax) is a growing specialty among financial professionals.
By the same token, we often see people online looking for “an accountant who understands eBay” or “a CPA who can help me with sales tax.” So we thought we’d take the next step and round up the best advice we could find for tax preparers who wish to specialize in eCommerce. … Or even for tax preparers who have found themselves receiving calls from eCommerce sellers and simply aren’t sure where to start.
We caught up with CPAs Sylvia Dion and Wray Rives, and Enrolled Agent George Sleeman and asked what they would tell accountants and other financial professionals new to the world of eCommerce finances. This is what they told us:
Put Yourself in Your Clients’ Shoes
All three professionals were adamant that in order to be an eCommerce financial professional, you must understand common eCommerce platforms.
“You need to know how your clients sells in order to know how his business works,” said Sleeman.
Rives put in that it is useful for eCommerce advisors to have a working knowledge of the major platforms like eBay, Amazon, and Etsy. He added, “Amazon Seller Central isn’t really that intuitive. You need to be able to get in there and help your client figure out how to run reports and collect sales tax.”
(Editor’s Note: If you suffer from this, too, check out our Amazon Sales Tax Quick Reference Guide for help.)
Get a Handle on Digital Financial Tools
Speaking of familiarizing yourself with digital tools, all three professionals agreed that an eCommerce accountant must know the financial tools available to their clients, and when to recommend them. Rives summed it up, “When clients sell online, they often want an online accounting solution.”
Rives mentioned that he often runs into clients who use GoDaddy Online Bookkeeping (formerly Outright), Xero, or QuickBooks Online, so it pays to be familiar with these “Big Three” services.
Sleeman, an early TaxJar adopter, added that our service for accountants, TaxJar Pro, has taken what he once calculated on multiple spreadsheets and save him hours per client in the process.
We also recommend Bench accounting for sellers who want a more hands-off accounting experience!
Find Your Tribe
Dion agreed that eCommerce accountants should familiarize themselves with the latest technology, but she also emphasized that eCommerce accountants should be sure to get to know colleagues in the profession, too.
“Because you are a CPA doesn’t mean you do every type of accounting under the sun,” Dion said. “It just isn’t practical anymore, which is why so many accountants focus on a niche.”
Dion herself is the sales tax expert many other financial professionals turn to when confronted with a knotty problem about precedent or nexus.
…But Don’t Stop at Your Tribe
Dion also recommended that potential eCommerce accountants not only meet colleagues, but get out there to conferences and events where online sellers hang out.
“Get involved in eCommerce – the industry, seminars, and events,” she advises. Meet potential clients and find out what their problems are. I’ve worked with a lot of eCommerce clients and they’re all different. They are all different.”
And last but not least…
Understand Sales Tax
All three financial professionals we interviewed agreed that an eCommerce accountant must understand sale tax at a high level, and be able to quickly get comfortable with sales tax laws in individual states.
For more on how tax preparers are using TaxJar, check out the TaxJar feature in Internet Retailer. Or find out more at TaxJar Pro.
Now, eCommerce sellers, you tell us. What do you look for in an eCommerce accountant?Please note: This blog is for informational purposes only. Be advised that sales tax rules and laws are subject to change at any time. For specific sales tax advice regarding your business, contact a tax advisor.