Bookkeeping tips for your eCommerce business

1. Bookkeeping tips for your eCommerce business medium.com/@pasfirm11/bookkeeping-tips-for-your-ecommerce-business-9f013d74b33f In this article, we have presented the best bookkeeping tips that will boost your eCommerce business. No matter the type of business you do, accounting is a necessity that you cannot avoid at any cost. Undoubtedly it is boring, and e-commerce business owners would rather talk about expanding their company than spend time on accounting. To run a successful e-commerce business, you should keep tabs on the numbers and understand the accounting basics. To help you understand e-commerce accounting, we have put together some bookkeeping and virtual bookkeeping tips that will help you deal with e-commerce accounting. Track cash flows The main aim of business is to generate profit and to calculate how profitable your business is, you need to list down the amount of money moving in and out of your business. You need to make more sales to allow more cash to flow. To generate more profit, you need to cut down on unnecessary expenses. You need to be upfront with the credit terms you present to your clients so that you receive timely payments. Apart from this, it would help if you tracked the earnings and expenses weekly to avoid any discrepancies later on. 1/3

2. Managing Inventory Inventory includes both the finished goods as well as the raw materials that are used to produce the end products. Maintaining a balanced inventory is essential because stocking unnecessary products in inventory impact your business. On the other hand, maintaining fewer stocks badly impacts your company’s reputation. So it is necessary to maintain a balanced inventory that should include the stocks and raw materials, you require. Having less inventory increases the fear of losing customers, and if your inventory is piled up in excess, your cash flow gets restricted. Cost of Goods Sold The cost of goods includes the cost spend on producing that product or goods. This cost comprises the money spent on labor and raw materials used to produce these goods. The indirect cost, such as the expenses of distributing and selling these goods, does not add up to the cost of goods. Undoubtedly, calculating the actual cost of goods requires a lot of experience and this tends to get more difficult if you have purchased the raw materials from different places and different salaries are given to the production team members. Keeping a track of COGS is crucial because they play a pivotal role in calculating and reporting the finances. Count the other expenses Apart from the cost of goods, several other types of expenses, also add up to the company. These are known as fixed and variable costs. Fixed costs comprise the cost incurred in your running a business despite producing or selling any product. These fixed costs incurred in running an eCommerce business can be: Technology and software costs Domain name and hosting (yearly payment) Rent and utilities Employee salaries Understanding fixed costs are necessary to minimize error and improve the efficiency of business operations. Track your earnings Tracking the sales is essential to forecast any discrepancy that can arise while generating the target revenue. This also allows you to apportion money to carry out business operations that contribute to revenue generation. For instance, if the sales for a month are going at a slow pace less than the expected number, then you can spend some money on marketing to improve your sales. Moreover, the costs of these products should also include the amount spent on marketing these 2/3

3. products. Tax Rates Tax may sound too complicated, but it is one of the essential factors, required to run a business. If you sell different products and services, then the procedure for calculating tax might get a little complicated. You should segregate all the taxable products. When you sell these goods, you will have to give them a tax payable. Categorizing the products as tax payable and non-taxable products are essential to running your business operations in an organized way. Tracking the business is essential to avoid trouble at the time of filing the taxes. Take help from the third party These are the best bookkeeping tips that you can swear by to manage the accounting needs of an eCommerce business. If your goal is to be successful in the e-commerce sector, then keeping your accounts in check is imperative. To avoid any discrepancies in the accounting operations, you should consider outsourcing your accounting department. Outsourcing the accounting needs will allow you to channel your time and energy toward growing your business. You can reach out to Professional Accounting Solutions to avail the benefits of outsourcing accounting operations. Professional Accounting Solutions, Inc offers timely and cost-effective accounting services including bookkeping, catch-up bookkeeping, accounting, payroll, tax, and QuickBooks consulting from their Miami and Fort Lauderdale offices. As a Certified QuickBooks Advisor, we provide consulting services that combine strong accounting and technology knowledge. ***Get free 1-Month online bookkeeping services from Professional Accounting Solutions, Inc, one of the best-reputed accounting Miami, USA-based firms. 3/3