As your eCommerce business grows, so too do your financial responsibilities. That means, as a business owner, you have an awful lot on your plate. Sales, returns, supplier payments, banking fees, every financial area you can think of, gets more complicated the larger your business grows.
Our team of financial experts can help you reach your maximum potential. We’re not entirely sure if this is true, but money is crucial for the long-term success of your business. Ensuring that you have proper and effective bookkeeping and accounting is critical for the success and growth of your e-commerce company—no matter your business size or industry. For long-term success, you need accounting services tailored to your specific needs and industry. In the e-commerce world, your business doesn’t fall in line with traditional hours.
How do you record ecommerce sales?
This ensures that you are always looking at the most accurate financial data, which is crucial for making any decisions that can affect your business’ growth path. But, you’ll want to consider permitting alternative payment methods like cash, checks, PayPal, and gift cards — especially if you do any business offline. Additional payment methods might make your bookkeeping more complicated, but it improves the overall customer ecommerce bookkeeping experience. Double-entry bookkeeping records each transaction in two accounts as debit and credit to make sure your income, expenses, assets, and liabilities line up appropriately. You have to wear a lot of hats as an ecommerce business owner, and (for better or worse) bookkeeping is one of them. Cash flow is one of the most prominent startup killers, so getting the books in order is your non-negotiable responsibility.
- Bookkeepers track all costs and income to help a company make informed financial decisions.
- Studies show that eCommerce sales will make up around 20.2% of all retail sales in the world in 2023.
- While e-commerce bookkeeping may at first look the same as e-Commerce accounting, there are important differences to note.
- When you first start a small business, you will hear the terms bookkeeping and accounting used almost interchangeably.
In case you need a hand, we’ve got short videos and step-by-step instructions to help you learn how to use QuickBooks. Maintaining an organized, cost-effective inventory is perhaps the most important aspect of any retail e-commerce business model. Maintaining inventory is more than just stockpiling items you intend to sell; it also means keeping track of your inventory cash flow. Your income statement includes all of the money brought in over a given time period, typically a month, quarter, or year. Operating income is any money made through regular business activities; if you own an e-commerce clothing retail business, your primary operating income is from inventory sales. An accounting program can track how many units were sold or if you’ve turned a profit.
Warning Signs Your Business Needs Outsourced Accounting
When you understand the basics of accounting, it can help you have confidence in your finances, stay compliant at tax time, and avoid unnecessary cash flow challenges. Tax money is not the same as revenue; it’s a liability that you owe the government. Your books need to show the difference between revenue, sales tax, fees, and the final cash deposit in your bank account. If you sell on multiple ecommerce platforms, you’ll need a single source of truth to maintain your inventory levels. This is critical to keep your sales, returns, restocks, and assets up-to-date in your financials. Without proper bookkeeping, you’re just aimlessly steering your ecommerce business.
Cash accounting does not allow for accounts payable or accounts receivable. Accrual accounting is an accounting method that records financial transactions when they are incurred, rather than when cash is exchanged. Ecommerce bookkeeping is the process of recording and managing all financial transactions for your online store. Regularly generate financial statements, including income statements, balance sheets, and cash flow statements, to gain insights into the business’s financial health. Generate Financial StatementsRegularly create financial statements, including income statements, balance sheets, and cash flow statements. These reports offer a glimpse into the financial well-being of your business.