E-commerce Founders: Why Your Financials Matter
E-commerce founders move fast. Between scaling operations, managing cash flow, and planning exits, many overlook one crucial element: their financials. If your accounting isn’t keeping up, your business could be flying blind.
Why a CFO Won’t Solve Messy Financials
Many founders assume that when they scale, they need a CFO. According to Jason Munckton ofECOM CPA, most brands scaling to $1M+ in revenue should first invest in a controller before bringing on a CFO. A CFO provides high-level financial strategy, but if your books are a mess, a CFO can’t fix that.
“If anyone tells you they’ll accept you as a client for CFO work while your financials are a mess, they’re doing you a disservice. You need a controller first.”– Jason Munckton, ECOM CPA
Additionally, many e-commerce businesses operate on anegative cash conversion cycle, where they pay suppliers and ad costs upfront but don’t receive customer payments until later. Without proper financial oversight, this cycle can lead to cash shortages and inventory mismanagement.
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ECOM CPA’s Approach: Technology + Expertise
Jason notes that many founders make decisions based on outdated financial reports. To address this,ECOM CPAbuilt a real-time financial dashboard that pulls live data from Amazon, Shopify, and other sales channels.
Key features include:
Live Profit & Loss tracking—no waiting for month-end reports.
Automated sales datasync from Amazon, Shopify, and marketplaces.
Cash flow projectionsto forecast accurately.
Inventory and demand planningfor proactive stock management.
Sales tax tracking and complianceacross multiple states.
Automation vs. Human Accountants: Where the Industry is Going
Accounting is changing. Many firms still rely on manual processes, butECOM CPAis investing in automation.
“AI-powered accounting is coming, but fully automated accounting is still five to ten years away.”– Jason Munckton, ECOM CPA
They recently hired a full-time engineer to build automation tools, reducing overhead while improving efficiency. However, Jason emphasizes that while automation improves accuracy, human accountants remain essential for strategic decision-making.
When Should You Outsource Your Accounting?
From Day 1→ Start with bookkeeping, even if you DIY.
At $200K+ Profit→ Upgrade to tax planning to reduce liabilities.
At $1M+ Revenue→ Consider CFO-level insights (only if your books are clean).
If you sell in multiple states→ Ensure proper sales tax compliance to avoid penalties.
FAQs: Answering Common E-commerce Finance Questions
What’s the biggest mistake e-commerce founders make?
Managing cash flow based on their bank balance instead of actual financials.
How do I know if I need a controller or a CFO?
If you can’t accurately forecast inventory needs, cash flow, or profitability—start with a controller. A CFO is useful once your financials are in order.
What are the tax benefits of working with an e-commerce accountant?
A specialized CPA ensures you’re structured correctly before tax season—reducing tax liability and maximizing deductions.
How can e-commerce businesses handle sales tax compliance?
An e-commerce accountant helps track obligations and ensures compliance with state laws.
What’s the advantage of real-time financial tracking?
Instead of relying on outdated reports, real-time tracking provides better decision-making.
For a tech-driven accounting firm specializing in e-commerce, check outECOM CPAon Sam’s List!
