Practice Management Small Business

What SMEs Operating Online Need to Know About Finances

Written by Victoria Greene

Ecommerce has grown into a diverse global landscape over the last decade. For businesses of any size andSMEs Operating Online industry, the chance to access millions of new customers online can be too much of a good opportunity to pass up. In fact, experts predict that online exports in six of the top e-commerce markets will see a fivefold increase by 2020, to $130 billion.

Accounting professionals seeking to become “most trusted advisors” to their small business and start-up clients need to be aware of this development and its implications.

The following is a summary of key issues that accountants with clients that are SMEs operating online need to be aware of regarding finances.

Integrate Alternative Methods Of Payment

Because digital spending trends are inextricably tied to the devices consumers use to access the Internet, integrating alternative forms of payment will be crucial to meeting the changing customer needs of SMEs.

In an ideal scenario, SMEs operating online would want to accept direct bank transfers, credit card payments, and PayPal. From there, the SME advisor should look at the business’ preferred payment methods (Google Wallet, for example) and consider including these channels too.

PCI DSS (Payment Card Industry Data Security Standard) compliance consists of 12 points. To achieve compliance in processing payments, a business will need to:

  1. Make a firewall to protect cardholder data.
  2. Change all system passwords to non-defaults.
  3. Find methods for protecting your stored cardholder data.
  4. Find ways to encrypt cardholder data across public networks.
  5. Install anti-virus software and regularly update it.
  6. Ensure that all software systems stay secure.
  7. Ensure that access to cardholder data is strictly on a “need to know” basis.
  8. Give all employees and users their own account and unique ID.
  9. Ensure that physical access to payment data is restricted.
  10. Monitor all access to networks and data.
  11. Test your security regularly.
  12. Ensure all personnel work in compliance with measures.

Full details on setting up PCI controls can be found here. For many SMEs, handling payments directly won’t be a necessity. In these cases, using a reputable payment gateway service would be sufficient to meet these points of compliance.

Ultimately, selecting the best payment processing system may be based on the costs offered on transactions, the ease of integration with your existing ecommerce store platform, and the volume of card payments your customers make.

Use Multi-Currency Accounting Apps

Whether your SME client is just starting out or is an established company, complete control of company finances is crucial. As your client’s trusted accounting and tax expert, you may want to utilize or recommend an automated multi-currency accounting software. This is now an affordable option and can help sync up currency conversions and bank accounts held abroad.

Manage Tax Issues at Home and Abroad

While multi-currency payment options have evolved in recent years, tax and regulation technologies have lagged far behind.

Cross-border tax issues constitute one of the most complex areas a strategic accounting consultant can help with.

Business owners may be just as confused as customers in figuring out the extra fees charged on products purchased from overseas. In turn, this could start to have a negative impact on sales.

You can find comprehensive duty calculators online that will calculate exact cross-border costs. These calculators will take account of free trade agreements, but make sure that you are also aware of the list of participating nations. This information should then be made freely available to your customers. This will help increase trust and enhance brand loyalty.

In managing your customs requirements abroad, make sure that you also check that shipping agents are attaching the correct customs paperwork on the front of all overseas deliveries. This should come as part of a reputable shipping agent’s services, but make sure to check.

Further, in terms of bookkeeping, it may also be wise to split your records by country. Tax compliance officers like to see all figures broken down. Arranging your accounts in this way can help make their jobs easier.

Cut Out Repetitive Tasks

Errors and poor record keeping costs your clients’ businesses money. Switching databases, finding details and signing-off documents takes seconds to complete, but if this needs to be done 20 times a day, this “dead time” can start to add up.

Accountancy automation software handles all of the onerous and repetitive calculations in your clients’ business operations for them, helping them to cut down on administration errors and allowing them time to focus on the more important things, like improving customer service.

Manage Payments/Payroll

If an SME has to process payroll in any capacity, it will need to track employee time sheets, bank and insurance details, and more. Accounting software that maintains these records and processes payroll easily is available. Providers like Kashoo offer payroll as an add-on service, offering a cheaper alternative to smaller operations that may not need a full range of accounting features right off the bat.

Get a Hold on Reporting

Tracking the returns on any sort of business investment, whether it is social media ad spend or PPC advertising, can also be made easier with automation.

However, beyond that, sifting through the large amounts of data collected by services like Google Analytics can be tricky. Your SME clients need to learn how to read between the lines of these insights and create marketing goals to supercharge their sales.

For example, if an SME has received increased website traffic as a result of a Facebook update, how can this data be leveraged to encourage more sales from the visitors that clicked on the link?

Similarly, if an SME has received a boost in first-time customers, with fewer repeat customers and lower average order values than previous months, how can the website be used to encourage these new customers to come back soon and spend more money? Could a voucher or an abandoned cart reminder message work?

Many of these queries will come down to working out the difference between your client’s “vanity metrics” vs. their “actionable metrics.” An example of vanity metrics is number of Facebook “likes” on a post, whereas an example of actionable metrics is number of purchases made through a discount code.

Syncing the analytics data of a business with its Shopify online store builder and ordering and accounts systems make this process a lot easier, as it allows an SME to track its customer lifetime value, i.e., the sum total of purchases over time. From there your small business client will then be able to figure out which messages encourage consumers to come back.

When Is the Right Time to Hire A Financial Director?

In the early stages, SME owners will hire an accountant or bookkeeper to help with the more complex aspects of compliance and business setup. As the business matures, the accounting professional can help the client to automate such functions as:

  • Day-to-day bookkeeping
  • Data entry
  • Reporting
  • Cash flow management

As a “most trusted advisor” who has made the move from delivering tax and accounting services to strategic business consulting, the accounting professional/consultant can also advise in such areas as:

  • Evaluating funding options and tax planning
  • Assessing and mitigating against financial risks
  • Coordinating and developing long-term strategies for growth

Ensuring that you meet your SME client’s accounting needs, should they choose to start selling online, will require careful strategic thought and planning. Navigating taxes, payment channels, and marketplace regulations takes dedication. However, many onerous tasks can be made easier through use of automation, giving accounting consultants more time to advise their clients to the best of their abilities.

About the author

Victoria Greene

Victoria Greene is a brand consultant and freelance writer who runs her own blog at She aims to empower start-up owners and give them the advice and courage they need to start their own online business.

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