We continue to be baffled by how much there is to talk about each year with respect to accounting. And after COVID-19 hit in 2020, and we’re still in the midst of a pandemic with 2021 said and done, there’s certainly a lot to unpack.
In general, accounting typically stays the same. However, the biggest hurdle that everyone in the accounting profession, as well as most every other industry, is facing right now is the Great Resignation. After millions of people were laid off in light of the COVID-19 outbreak in 2020, 18 months later, employers are having trouble finding enough people who are willing to work.
Let’s jump into the insanity that has been this past year…
COVID-19
Look. COVID-19 is still very much impacting the accounting realm as well as the larger working world. And after causing skyrocketing growth in ecommerce, the pandemic is still keeping those numbers up.
That being said, as of recently, it was reported that Amazon’s monolithic ecommerce boost has dropped off now. (So, people are beginning to buy things elsewhere!)
A2X News
As you all know, we love A2X. They’re one of our top partners, and they’re still our go-to partner for posting income in ecommerce. For you ecommerce sellers, A2X takes all of the ugly order details and sorts them into an accurate (and aesthetically pleasing) summary of accounting information without crushing your accounting system.
A2X is continually making improvements, which makes them such enjoyable partners. The big news in 2020 was that A2X no longer only works with Amazon. They also integrate with Shopify, Walmart, eBay, and as of recently, Etsy!
For more information, here’s a link to check them out.
Cloud Inventory
We know that every year we talk about cloud inventory…And every year we tell you they are all great and simultaneously all suck in different ways. One of the biggest struggles that we’ve all faced is that you need a cloud inventory tool, but most tools haven’t really improved in a long time.
Last year, the big news was that we finally found a cloud inventory tool that we were willing to connect to Xero without worrying that it’s going to push over too much data or the wrong data: Locate. Now, Locate was acquired by Xero in 2021 (which we’ll talk about later)! In addition to Locate, though, we support connecting Brightpearl to Xero, too. We’re still working on DEAR, Cin7, etc.
BUT… just like all cloud inventory tools, you need to: 1) devote the time and attention required to set up your tool properly, 2) be aware of its limitations and how that will impact your accounting, and 3) build proper workflows that will support the proper use of your tool.
Our top recommendation is to work with a cloud inventory consultant that will optimize the tool, provide better support, do customizations, etc. Cloud inventory tools have the potential to fundamentally improve your business, or they’ll be a massive drain on your resources and make things even worse…So, you need to be in control of that process.
Payroll
We believe that Gusto continues to be the leader in this space. And they have changed so much in 2021!
Here are some of the major updates:
– Geolocation on Time Tracking: Enables hourly employees to record their locations when clocking in and out of shifts on the Gusto Wallet app.
– Self Serve Tax Package: Allows for client admins and accountant users to download a zip of their W-4 and/or I-9 files for all of their employees at once instead of one by one. (To find this resource, click on: Company > Documents > Bulk I-9 and W-4 form packages tab.)
– Gusto Recruiting: Advertise job postings, review candidates, send an offer letter, and more.
– Multiple Bank Accounts: Customers can associate multiple company bank accounts and choose from specific accounts for each payment they make.
– International Contractors: Process international contractor payments through Gusto for work completed in 80+ countries.
– Performance Reviews: Companies can facilitate a performance review cycle for their staff directly within Gusto.
– Gusto is also now integrated with Salesforce, Travitor, 15Five, GoToMeeting, Traliant, and Lattice. Click here to see Gusto’s entire app directory.
A challenger to Gusto that we think is worth keeping an eye on again is Rippling. Rippling sets themselves apart as an all-in-one HR and IT platform. You know how when you hire a new person, you need to set them up on a million apps and maybe order them a computer or a phone,etc? Yeah, Rippling streamlines all of that for you.
And as your business grows, Rippling can provide you with identity management, IT support, payroll automation, and several other capabilities to help you optimize your back office.
Accounts Payable
– Bill.com is the best option we’ve found (it was the first to market in this space). But, here are a few other companies that are worth paying attention to this year:
– Veem – one of our partners! Veem is already great for international wires & ACH, uses blockchain technology, and now is making improvements to UI, providing free checks in ACH in the U.S., and providing additional factoring/other financial services.
– Relay – online bank, good for non-US sellers trying to set up a US bank, but you need a U.S. entity to work with them.
– Settle.co – accounts payable and financing optimized for ecommerce.
Xero vs. QuickBooks Online
We still prefer Xero versus QuickBooks Online, but QBO offers a lot of perks as well. Everyone has their preferences!
In addition, QuickBooks Intuit recently purchased TradeGecko. Now, it’s called QuickBooks Commerce, which one of the founders of TradeGecko said will “accelerate our long-term mission of building the commerce platform to power millions of SMBs globally.” However, something to keep an eye on is how they’re affecting TradeGecko customers in addition to the larger market. And they may begin limiting cloud inventory tools, too.
And in exciting news for Xero, they recently acquired Locate Inventory, a consulting business for inventory-based companies. According to Locate’s blog, “Xero plans to embed LOCATE’s inventory management capability, talent and expertise into its business and focus on building a new cloud inventory management solution for small business, accountants, and bookkeepers.”
Accounting Firm Updates
The biggest change in the industry is, you guessed it, Catching Clouds merging with Acuity! And suffice it to say that it’s going really well. It’s one of the best decisions that we’ve made. If you missed it, you can read more about our merger here on our blog.
And you’re likely going to continue to see more consolidation, both in the accounting space and also with the different SaaS tools…Acuity works with so many AP tools – like Veem, Bill.com, and Pluto.
The field of ecommerce accounting firms continues to grow more each year, and starting in 2020, we’ve finally started to see some ecommerce accountants who know what they’re talking about and have developed solid reputations in the space.
Last year, the pandemic brought others who reluctantly but necessarily transitioned to online and were greatly slowed down by that. (Stay away from those, if you can. They won’t be able to help you long term.)
The pandemic also wrecked havoc on some “AI-based” bookkeeping firms. One of the big ones was ScaleFactor. (See this article from Forbes or this episode from the Cloud Accounting Podcast from 2020 to catch up if you need to.) Long story short: the technology that people need to replace us accountants still isn’t quite ready, so when you pretend you’ve got it, you’re just building a house of cards.
Look, we know that some of you are working with us, and some of you are working with our peers. If you have any questions about this space, we’re happy to help.
At Acuity, we’re now offering our high-touch ecommerce accounting service on QBO as well as Xero.
IRS-y Things
1099 Reporting Changes
There are always a few new things. 1099-MISC had a name change, from Miscellaneous Income to Miscellaneous Information. Some of the other changes that the IRS highlights are specific to different boxes on the form. Click here to learn more specifically about what’s new from the IRS.
In addition, both 1099-NEC and 1099-MISC must be delivered on or before January 31, 2022. From there, deadlines vary for filing these forms with the IRS. Double check on the IRS website to see which deadline pertains to your specific form, whether you’re a paper filer, electronic filer, or maybe even fall into a different category based on information filled in certain boxes.
Check out this page on the IRS website to learn more about this year’s filing dates.
For more information, check out our most recent blog post about 1099 reporting changes this year – The 1099 Form 2021: What You Need to Know About Filing.
Nexus Issues
Nexus is your “business presence” in a location. You heard all about this during the South Dakota vs. Wayfair case as it relates to “economic nexus” or with respect to physical presence of inventory.
But, finally! All states have marketplace facilitators so that Amazon, eBay, Walmart, Etsy, etc., are collecting and remitting all the sales tax for their sales to the U.S. states. If you’re a marketplace-only seller with no Shopify/etc. site, you can deregister in all states or all but your own state. If you are selling through Shopify/other, make sure you’re including your marketplace facilitators as exempt sales to your filings. Don’t just ignore them!
Sales Tax… Always Sales Tax
We’ve recently switched to using Avalara managed returns for accountants. They’ve made sales tax so much easier to manage. We’re really happy with the partnership.
For sellers, we still recommend everyone outsource their sales tax to a sales/local tax ecommerce expert, but if you decide to implement a tool yourself, we would recommend Avalara over any other tools.
Miscellaneous Topics
If you made it this far, thanks for sticking with us. Here are a handful of Acuity’s blogs, Scott Scharf’s webinars, videos, podcasts, interviews, etc. for more information on specific topics:
– The 3 Things That Will Continue To Affect Accounting, Post Pandemic – Acuity
– How Congress Ending the ERC (Employee Retention Credit) Is Hurtful – Acuity
– Expectations, Attendees, And Favorites From NetSuite’s Annual Conference: SuiteWorld – Acuity
– Three Steps to Optimizing Cash Flow During a Crisis – Shopify
– Why Detailed and Accurate Financials are Critical for E-Commerce Businesses – TaxValet
– Ecommerce Accounting with Scott Scharf of Catching Clouds – Sales Tax and More
– How to Build Out an Accounting System Using Automation with Scott Scharf – QuietLight Brokerage
– eCommerce Holiday Preparation in a COVID-Era for DTC Brands on Amazon and Beyond – Channeled
Ecommerce Accounting Last Thoughts…
We really appreciate being part of and supporting the accounting community. At Acuity, our team is always happy to talk to ecommerce sellers and help out in any way we can. We’re looking forward to providing our current and new clients with more value and ecommerce CFO services in 2022. Happy holidays!
Stay healthy, and happy holidays to all of you!
