E-commerce is the buying and selling of good or services via the internet, and the transfer of money and data to complete the sales. It’s also known as electronic commerce or internet commerce.
Types of e-commerce
As commerce continues to evolve, so do the ways that it’s conducted. Following are the most traditional types of e-commerce models:
Business to Consumer (B2C): B2C e-commerce is the most popular e-commerce model. Business to consumer means that the sale is taking place between a business and a consumer, like when you buy a rug from an online retailer.
Business to Business (B2B): B2B e-commerce refers to a business selling a good or service to another business, like a manufacturer and wholesaler, or a wholesaler and a retailer. Business to business e-commerce isn’t consumer-facing, and usually involves products like raw materials, software, or products that are combined. Manufacturers also sell directly to retailers via B2B ecommerce.
Direct to Consumer (D2C): Direct to consumer e-commerce is the newest model of ecommerce. D2C means that a brand is selling directly to their end customer without going through a retailer, distributor, or wholesaler. Subscriptions are a popular D2C item, and social selling via platforms like Instagram, Pinterest, Facebook, Snapchat, etc. are popular platforms for direct to consumer sales.
Consumer to Consumer (C2C): C2C e-commerce refers to the sale of a good or service to another consumer. Consumer to consumer sales take place on platforms like eBay, Etsy, Fivver, etc.
Consumer to Business (C2B): Consumer to business is when an individual sells their services or products to a business organization. C2B encompasses influencers offering exposure, photographers, consultants, freelance writers, etc.
E Commerce Accounting
E-Commerce accountants in London, or any big city, specialise in providing e-commerce companies accounting services and advise with a strong awareness and understanding of the industry and the regulations affecting it.
Beyond the scope of basic Accounting and tax advice as well as bookkeeping, E-Commerce accountants can offer:
E-Commerce Accountants advise on the most beneficial VAT scheme to apply as well as the preparation and submission of ongoing VAT returns. They can successfully handle HMRC VAT investigations and know all the areas of VAT tax law which impacts many types of e-commerce such as dropshippers.
Reducing foreign transaction costs
E-commerce businesses provide products and services globally, leading to more foreign transactions than a typical business. Reducing the costs related to these transactions is important for profitability which experienced ecommerce accountants can assist to reduce these costs.
Dashboards and Analytics
An ecommerce business is an inventory-based company. The inventory and COGS numbers are the most important figures to understand and ensure their correctness. A business will need more knowledge for this area of accounting than for a typical business. Through the use of inventory apps and systems, an ecommerce accountant can assist a business with the management and control of stock using cloud-based systems which provide live stock updates. This eliminates human error and reduces the time taken for inventory management.
It is vital to be able to make informed decisions, and the choice of analytics and management reporting solution will make a significant difference to the quality of insight a business can achieve and quality of decision making
E Commerce accountants may offer tailored industry experience such as being PPC specialists with a track record of delivering value for money for a business. Through offering an audit of the current state of the business, an e-commerce accountant can offer strategical advice and informed plans on how best to market the PPC campaign. This is a huge driver for growth of a business.