02 Mar 5 Accounting Tips for eCommerce Businesses
Accounting is one of the top necessities of any eCommerce business to keep it running successfully. Though bookkeeping is complicated and annoying, you cannot afford to ignore it as a business owner. It plays a crucial role in making your business successful in the marketplace.
Why eCommerce Accounting Software?
Running an eCommerce business may seem fun at first glance, but that’s not the case. As an eCommerce business grows, so are its accounting requirements. Things that look easy in the starting – expenses and profits – become more complicated with the time as you start considering supplier costs, logistical solutions, refunds, taxes, and other details. All these elements should be accounted for, and precise records must be kept.
To manage all these things, you need to have a sound eCommerce accounting software in place. An accounting system can make your job quite more comfortable as a business owner. With the right accounting software in hand, you can stay updated with the complete image of how your business is performing, forecast the future, and plan the next moves for your business.
Here are a few fundamental tips you need to take into consideration to have proper accounting procedures in place.
Separate Your Personal & Business Finances
This may appear obvious, but many eCommerce businesses fail to follow this primary step. They use their personal money for business purposes and vice-versa, and this can be their biggest mistake. Combining your business funds with private funds can get complicated with time, resulting in generating complications while paying taxes and other debts. To avoid this issue, you prefer to use an ideal business structure, and the two likely options include, Sole Proprietorship and Limited Liability Company.
Keep A Record of Your Business Sales
Being an eCommerce business owner, you need to have proof of almost every operation you perform in your business. Having a proper record of your business sales helps you in determining how much you are spending and earning from your efforts. Keeping your sales records doesn’t mean take out a receipt of every transaction and store it into a file manually. Instead, you can save all your business data electronically on the cloud.
Make Plans for Major Expenses
Measuring major expenses may sound easy, but in reality, it’s not as it’s often challenging to predict what expenditures are coming up. However, there are a few expenses you can plan early. For instance, upgrading your computer systems, you may know that you’re liable to pay for this service. In this case, you must start considering these types of expenses in advance and determine how you can save money out of them. For an eCommerce business owner, planning purchase orders and preventing unexpected stock-outs are crucial parts of expense planning.
Take Out Some Money to Pay Your Taxes
Setting up a separate account where you can save money for your taxes is another excellent idea. It is mandatory as it’s quite easy to use the money that you’re keeping to pay your taxes whenever a financial crisis occurs, or you have no plan for significant expenses. Consequently, it will lead you to lose all the amount you’ve saved for taxes for the past few months. If you don’t want any delay in paying taxes, you can talk to your accountant or bookkeeper to know how much amount you should set aside.
Get Yourself a Reliable Accounting Software
As discussed, accounting software can be a great solution to all the accounting needs of any eCommerce business. It can help you simplify your bookkeeping with payment tracking, client management, custom invoices, and more. Though there are different accounting software in the market, you can choose QuickBooks if you want to keep things simple.
Accounting may appear a tedious factor of running an eCommerce business, and knowing how to do it right can help you make your business grow. Paying close attention to bookkeeping can open the doors for improved time management, business productivity, sales, and growth.
With the help of the right accounting system like QuickBooks (QB), you can send out invoices electronically every time a transaction occurs. All you have to do is – sync your bank account with QB and let it send E-invoices automatically.
Sending out invoices with QB is more efficient and adds more credibility to your eCommerce business. It also allows you to save your time and save some money on paper-related expenses as everything is online.
Undoubtedly, QuickBooks makes the life of an eCommerce business owner easier. If you want to automate all your business bookkeeping processes, consider consulting Cloud 9 Hosting. We are one of the renowned firms in QB hosting solutions that are experts in both Exchange Hosting and Sage Cloud Hosting. Explore our business website to know about our hosting solutions and pricing in detail.