Shopify Accountants: How to Find the Right One for Your Ecommerce Business

Even in the crowded ecommerce marketplace, Shopify has emerged as the platform of choice for DTC entrepreneurs of all sizes. 

The platform is easy to set up, simple to use, and offers a wide range of secure payment gateways, dramatically lowering the barrier of entry to the ecommerce field. If you have a product to sell and a plan on how to sell it, Shopify provides everything you need to run your DTC business. 

Well, almost everything. 

You still need proper accounting of your financial transactions, something that you can’t get through Shopify alone. 

Without proper accounting, it’s virtually impossible to know if your business is operating efficiently, or even if the high revenues you’re seeing are bringing in profits. 

All too often, ecommerce entrepreneurs are more focused on sales and marketing than they are on keeping their books straight. 

Business founders often make the naive assumption that all accountants are equally adept at all types of business. But many quickly discover that ecommerce accounting requires specialized knowledge. 
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This is where specialized ecommerce accountants come into play. They are professionals who understand not just general accounting principles, but the specific financial ecosystem of Shopify businesses.

Shopify accountants have the know-how to handle the unique accounting challenges related to DTC sales, multi-channel inventory, a variety of payment processors, and tax obligations that change from state to state. And much, much more. 

The right Shopify accountant can make the difference between merely surviving and truly thriving in the competitive e-commerce market.

Why Shopify Businesses Need Specialized Accountants

Shopify businesses operate in a unique financial environment. They have to account for a different set of elements than a typical brick-and-mortar operation. They require specialized knowledge and expertise.

Unique Accounting Challenges for Shopify Businesses

1. Multi-channel complexity

One of the best features of using Spotify - and a key element that pushed it to the top of the ecommerce hierarchy - is the ability to expand sales to numerous other channels, including marketplaces like Amazon and Ebay, all through the Shopify store. 

The multi-channel flexibility makes it a boon for business owners. But it creates a challenge for accountants. Every channel has its own system for sales, fees, and returns, requiring a skilled accountant to reconcile the various accounts. 

2. Payment processor reconciliation

Ecommerce sales today involve a full range of payment options. More sales go through alternative payment methods such as digital wallets or Buy Now, Pay Later (BNPL) systems than credit cards these days.  

The broad range of payment options make online sales quicker and easier than ever. Regardless of the method, a Shopify accountant can reconcile all the different channels - something general accountants may not be equipped to handle efficiently.

3. Inventory and COGS management across locations

While DTC sounds like a simple concept - selling merchandise through the internet - managing your costs of goods sold (COGS) is complex and could take different forms. Buying multiple ingredients from different suppliers, at different times and currencies, can make tracking COGS a real challenge. Top ecommerce accountants that are well versed in Shopify accounting and using good software can help you stay on top of this, and make sure you are actually profitable per SKU, and not cross-financing.

4. Complex tax calculations

Shopify sellers, especially if they operate through multiple sales channels, are likely to make sales across any number of states. This creates challenges, especially in the area of tax compliance. For example, a high-volume seller could create a sales tax nexus across multiple states if the local sales volume is high enough.      

Benefits of Hiring Shopify Accountants

In a nutshell, Shopify accountants provide more benefits than generalized accountants when it comes to the financial health of your DTC business. 

• You make better business decisions because your data is right for your sector. 
• You get a clear picture of your financial position across all channels. Shopify accountants use specialized software to pull data from all your accounts and create a reliable chart of accounts.  
• You see better data for forecasting and planning, pricing strategies, product profitability, and growth opportunities based on your specific Shopify business model.

Ultimately, a specialized accountant builds a financial system that scales with you, helping you navigate challenges as your business grows. 

Generalist Accountant vs. Shopify Accountant

How a Shopify accountant is different from a general accountant

There are many important distinctions between a general accountant, especially one whose primary training and experience in the world of retail, and a Shopify accountant. 

Shopify- and ecommerce-specific reporting

A Shopify accountant understands the nuances of the Shopify platform, including how DTC transactions are recorded, how fees are structured, and how the platform integrates with various payment gateways and apps.

Shopify accountants also work with multiple ecommerce businesses, giving them insight into industry standards and benchmarks specific to your business model and product category.

Taxes

An important difference is how Shopify accountants approach taxes. Even though the internet is not bound by borders, commerce is still governed by states and selling across state lines can trigger a sales tax nexus. 

While general accountants understand basic tax principles, Shopify tax accountants have specific knowledge about DTC tax obligations, including economic nexus rules, marketplace facilitator laws, and digital goods taxation. This is especially pertinent when selling on Shopify, as sellers generally have sales tax liability here (vs marketplaces).

Technology integration 

Specialized accountants are familiar with the apps and integrations that connect Shopify with ecommerce accounting software designed especially for ecommerce rather than being limited to general accounting programs like Quickbooks. 

Ecommerce businesses have unique marketing expenses like PPC advertising, influencer partnerships, and affiliate commissions. Specialized accountants understand how to properly categorize and analyze these expenses for tax and profitability purposes (such as including variable marketing costs above the contribution margin line).

What to Look for in a Shopify Accountant

Finding the right Shopify accountant starts with a clear understanding of the goals of your business, what it needs to succeed, and what role the accountant will play in helping achieve those goals. 

If you have a business plan and a good idea of your expenses and revenues, a Shopify accountant can help you see how well your business is running, check that your profit margins are on track with your goals, and ensure that your planning for the future is in line with your cash flow. 

The best and most experienced Shopify accountants will share examples of how they've helped clients improve margins and profitability through financial analysis and strategy.

1. Experience with ecommerce and Shopify accounting 

Ideally, the Shopify accountant you choose will have experience with DTC stores that are similar to your business, possibly even in your particular niche. That would help them anticipate the types of transactions you are likely to make. 

That means looking for an accountant with direct experience working with the specific ecommerce models you are using in your business. Whether you're using dropshipping, holding inventory, selling digital products, or subscription services, your accountant should understand the financial implications of your specific model.

Most likely, a Shopify accountant who has worked with successful ecommerce businesses will also understand the evolving financial needs at each stage of the business as you move from 6 to 7 and then 8 figures in revenue.

2. Familiarity with tax compliance

Taxes represent one of the most important - and most difficult - aspects of ecommerce accounting. First, missing tax payments or underpaying what you owe could result in fines and, if severe enough, could harm the reputation of your business. Second, if your ecommerce bookkeeping is handled poorly, it can lead to overpaying taxes or missing out on possible deductions.

Your Shopify accountant should be an expert in DTC sales tax, with a strong understanding of your tax obligations based on sales volume and transaction thresholds - particularly when your sales create a sales tax nexus. The accountant should also be knowledgeable about market facilitator laws to ensure all taxes are properly accounted for in all markets, including marketplaces like Amazon or Etsy. 

Your Shopify accountant should also be familiar with various state, local , and international filing requirements and deadlines. 

3. Expertise in Shopify integrations and financial reporting

In essence, an ecommerce business is at the heart of an advanced technological ecosystem. It includes accounting software, ecommerce inventory management systems, and payment processing systems - all of which are designed to support the main business. 

An ecommerce accountant will draw data from all your accounts electronically, creating a single source of truth. 

That sounds simple but it can be a major stumbling block. Even less experienced Shopify accountants might have trouble reconciling transactions across Shopify Payments, PayPal, and other payment gateways. 

It  requires the ability to integrate with accounting tools like Finaloop to create real time accounting along with accounting reports that go beyond standard accounting outputs to provide e-commerce-specific insights.

4. Important certifications and credentials

Finally, if you are choosing a Shopify accountant, make sure the accountant has the proper certification. While there is still no ecommerce-specific certification for accountants, a regular accounting certification combined with hands-on experience in the ecommerce industry should provide sufficient reassurance of expertise. 

If you are looking for simple bookkeeping, it could be sufficient to work with a bookkeeper or group that are not Certified Public Accountant (CPAs). If you also need tax work, such as year-end tax reporting or expertise on sales tax, you need the service of a CPA. 

Common Mistakes Shopify Businesses Make Without a Proper Accountant

Mistakes are a part of life, but mistakes in handling finances can be costly, especially when a business begins to grow and develops complex accounting needs. 

Many mistakes can be avoided by working with industry experts, especially when those experts also use effective accounting software. 

Here are some of the most common mistakes ecommerce owners make: 

Incorrect Tax Calculations and Compliance Issues

Many DTC sellers don't realize they have tax collection obligations in states where they exceed sales or transaction thresholds, even without having physical presence in those states.

Often, they also fail to maintain proper records for tax exemptions, creating potential problems during audits and missing tax filing deadlines in different states. 

Poor Inventory and Cost Tracking

Inventory management is one of the most complicated parts of running an ecommerce business. It’s not just keeping track of how many units you have available for sale, but also how much your landed costs are per-unit. 

Without proper accounting of your cost of goods sold (COGS), you may be losing money on every sale - something that is hard to see when sales are growing and revenue is flowing into the business. Other than the cross financing of SKUs, and potentially underpricing products (or discounting too heavily), inventory management can have other implications.

In addition to having cash tied up in inventory, heavy financing and carry costs, you may also drive your inventory value to the ground. Holding inventory past prime season can lead to the need to have steep discounting or giveaways, to free up your precious and costly warehouse space.

Inefficient Bookkeeping and Cash Flow Management

There are so many ways to make bookkeeping errors - anything from mixing personal and business finances in a single bank account to manual errors in data entry that lead to discrepancies in financial statements - that’s it’s tempting to say the most common error is simply to ignore bookkeeping as much as possible. 

But that’s not really correct. The most common error, or perhaps the most serious error, takes poor bookkeeping and raises the stakes to a new level. The error is to believe your bank balances are the true indicator of cash flow. 

Too many businesses make financial decisions based on bank balances rather than on accurate financial reports, leading to problems, such as poor inventory or cash planning. Without proper accounting, a cash crunch is always right around the corner, and trust me, you want to stay away from those MCAs. 

How Shopify Accountants Help Avoid These Errors

Hiring a Shopify accountant can address all the issues mentioned above. 

 Shopify accountants can provide:

• Proactive tax readiness - So your books are all prepared for tax season and sales tax is categorized properly.
• Financial statements - They create meaningful reporting systems that provide data into your finances. This can help you make real-time business decisions, assuming you are using a tool like Finaloop.
• Strategic inventory management - Using ecommerce inventory software, Shopify accountants can provide you with visibility into inventory per warehouse, inventory turnover rates, optimal reorder timing and general inventory forecasting.
• Cash flow forecasting - A Shopify accountant can help you anticipate cash needs based on your spending patterns and growth projections.
• Automated systems integration - A Shopify accountant can set up proper connections between your store and accounting software, minimizing manual entry and errors.

Where to Find a Shopify Accountant

Finding a qualified Shopify accountant requires looking in the right places. Here are several resources to help you connect with specialized e-commerce accounting professionals:

Referrals from other Shopify stores - One of the most reliable sources is recommendations from other Shopify business owners, particularly those in your niche or at a similar scale.

Ecommerce accounting firms - Several accounting practices now focus exclusively on e-commerce businesses, with dedicated Shopify specialists, such as Finaloop.

Online communities and forums - Shopify community forums, ecommerce Facebook groups, and Reddit communities often have recommendations for trusted accountants.

Conferences and trade shows - Ecommerce and Shopify-specific events often include accounting partners who specialize in the platform.

Top Questions to Ask a Shopify Accountant Before Hiring

The best way to find the right Shopify accountant is to ask the right questions. You want to know that the accountant is both an expert in the unique elements of ecommerce and understands the needs of your particular business model. 

Here are some sample questions that can help you identify what you need to know: 

1. Do You Have Experience with Shopify-Specific Accounting Challenges?

This question will help you determine whether the accountant understands the specific demands of a Shopify business, including different business models (dropshipping, subscriptions, etc.), revenue recognition, platform fees, and payment gateways.

A follow-up question that can help you determine if the fit is right could be: "Can you describe a specific accounting challenge unique to Shopify that you helped a client solve?"

2. Which Accounting Software Do You Recommend for Shopify Stores?

The Shopify accountant you choose must be familiar with the software that produces the most efficient results for your business. You want to know that the software is right for your business and integrates well with Shopify. 

You can follow that question by asking if the accountant can tailor that software to your Shopify business. 

3. Can You Provide Case Studies or Testimonials from Shopify Clients?

This is less a question than a request for proof that the accountant can deliver the desired results. An effective case study demonstrates success and connects the experience to a particular company. 

Ideally, the case study would demonstrate how the accountant handled a particular challenge. If that isn’t part of the testimonial, a smart follow up would be to ask for an example of an accounting challenge the accountant was able to overcome. 

How to Get Started With a Shopify Accountant

After finding some good prospects with the accounting skills and ecommerce expertise you need, and then following up with some pointed questions, you’re ready to choose your Shopify accountant. 

The next step in the journey is to bring the accountant onboard.  

Steps to Onboard an Accountant for Your Shopify Store

The process begins with a comprehensive kickoff meeting to discuss business goals and expectations for the accounting relationship. 

When all of the outstanding issues are resolved, the two sides sign a service agreement detailing the services the accountant will provide, the responsibilities of each party, the fees, and terms of the agreement. 

The accountant then handles the technology setup to build the necessary connections between Shopify and your accounting system. 

Finally, your Shopify accountant will provide detailed process documentation, conduct a comprehensive financial review, and begin strategic planning.  

If you are using a system like Finaloop, you can cut a lot of this out of the process. Finaloop serves as your software service (encompassing ecom specific Chart of accounts), built-in integrations with online stores, payment processors, banks, payroll and more, and even has inventory management software. Moreover, utilizing Finaloop provides you with a top-notch team of ecommerce accountants on the backend, making sure your books are in order.

What Documents and Information You'll Need

Access credentials:

• Shopify admin access (with appropriate permission levels)
• Payment processor logins (Shopify Payments, PayPal, etc.)
• Existing accounting software credentials (including bank and credit card access)
• Expense management systems (unless also included in accounting software)

Business documentation:

• Business formation documents
• EIN and tax registration information (only necessary if filing taxes for the first time)
• Previous tax returns (at least 2 years if available)
• All 1099-K forms 
• Existing financial statements

Operational information:

• Inventory valuation - opening balance
• Employee information (not needed unless accountant is also running payroll) and 
• Contractor information and any 1099-NEC forms
• Lease agreements and major contracts

Financial history:

• Bank and credit card statements (opening statement and the previous month) 
• Loan documentation
• Investment records
• Asset purchase information (if relevant)
• Fixed asset and intangible asset information and depreciation/amortization schedule

Alternatively, you can simply connect your Shopify store to accounting software like Finaloop. Just  download the Finaloop App from the Shopify App Store and get real-time financial data.  

How to Ensure Smooth Collaboration and Communication

Once the relationship is established, it’s important to establish clear communications channels, set regular meetings for financial reviews, and define protocols for urgent financial matters. 

Make sure that there is clear understanding about response times. That can eliminate a great deal of misunderstanding that can undermine an otherwise healthy relationship. 

Finally, it’s a good idea to establish periodic times to review the relationship, including the goals and expectations, which often change with time. 

Final Thoughts: Find the Right Shopify Accountant for Long-Term Success

Shopify has emerged as a top choice for ecommerce, and there is a great need for accountants with expertise in both Shopify and the wider world of ecommerce. 

Shopify accountants, who understand ecommerce, multi-channel selling, and DTC business models, play an essential role in the ecosystem.

Choosing the right Shopify accountant can impact your business directly. The accountant can put you on the right path for ensuring financial health and helping you build a plan for sustainable growth. 

Beyond compliance, a good Shopify accountant provides insights that drive profitability, manage cash flow, and support informed business decisions. As your business grows, your accounting partner will grow with you, providing the financial advice you need at any level.  

Looking to streamline your Shopify accounting? Schedule a free consultation with Finaloop and discover how our expert team can help your business thrive