E-commerce is one of the largest expanding industries in the world. The largest companies today, including Amazon, Alibaba, and Walmart, are taking over the retail centers in all categories. Opening an e-commerce store is an exciting venture for any entrepreneur. Once your new store has been set up and goes live on the internet, you will need to ensure that your stock levels are sufficient and that expenses are tracked, among other concerns. By keeping these tips in mind, you’ll be able to effectively work with an e-commerce business.
Here are some tips for e-commerce accounting that will make your operation easier:
Keep A Record Of All Expenses & Revenues
If your online store has been up and running for more than a year, then you know the importance of correctly recording business expenses and revenues. Many expenses are tax allowable, which then reduces your business’s taxable income. This includes things like shipping costs and website domain and hosting fees. Outgoings to services like bookkeepers and accountants are also tax-deductible.
With every purchase, you need to ensure you get a receipt. The importance of this cannot be stressed enough, the receipt is your proof. It details the transaction date, product or service information, and the price. Plus, if you don’t want to keep the paper copies, there are now apps that allow you to store receipts in a paperless way.
Integrate Accounting Software With The Online Store
You should always connect your accounting software with the online store which keeps your books accurate and up-to-date. It also acts as a great mechanism to save time by cutting down on you having to manually input your own calculations – which would then allow you to concentrate your focus elsewhere. Additionally, when you decide to hire an accountant, these types of software will grant them easy access to your business reports and information, with all your transactions located in one place.
Accounting software allows the connection of your bank account to your business. This will allow the automatic syncing and download of all your transactions. It saves you from manually entering the banking transactions and hence saves a lot of man-hours and time. This helps tremendously when reconciling your accounts and once the month’s end comes, you can run a reconciliation report that will automatically match your transactions. If you do this regularly you’ll be able to easily find out when things don’t balance correctly, which can allow you to quickly get things back on track.
When any money leaves or comes into a business, it has to be recorded. Using a digital accounting portal will make it easy for both you and whatever eCommerce company you are working with to reliably track all cash flows. You can even report that money by taking the official records from the client's bank account. You can also choose to use top-notch accounting software to make that happen automatically. This will help you rid yourself of the hassle of keeping track manually. You can either do this manually or set it to happen daily, weekly or monthly.
Support For Multiple Currencies
Unlike brick-and-mortar retail, it’s very likely your e-commerce store will reach customers using a variety of currencies. Your bookkeeping solution needs to be able to handle multiple currencies and accounts for any discrepancies they create.
Keep Track Of Deadlines
Deadlines need to be kept. If they’re not, they will tend to sneak up on you. If you work in the US, things are straightforward when keeping the deadline for taxes. You need to file on time otherwise you will be slapped with price penalties.
By following these simple tips and employing the right software, you'll be able to offer more value to your e-commerce clients or successfully break into the niche of e-commerce accounting.
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