It’s common for small business owners to always have a lot on their plate. From daily business operations to customer service, marketing tactics, networking, and ensuring that everything goes smoothly — it can be very overwhelming.
Finding time to review financial spreadsheets, analyse numbers, and manage your cash flow becomes difficult. 1 out of 7 reasons businesses fail is poor cash flow management.
You can avoid this by hiring a professional bookkeeper.
Whether you need help improving cash flow or enhancing overall financial transactions, Pearl Lemon Accountants has the expertise to help you. Our eCommerce bookkeeping services can assist in giving up-to-date financial information to our clients.
If you want to stay on top of your books, just call us, and we’ll get you started.
Bookkeeping is the process of tracking the money that enters and exits your firm.
When it comes to bookkeeping and accounting, running an e-commerce firm is similar to running a traditional retail shop. ECommerce Bookkeeping includes concentrating on inventory and cash flow while utilising retail accounting software to help you fill in the gaps.
As a retailer, inventory is the foundation of your business, and nearly everything you do depends on it. As a result, many of your financial paperwork and reports are simply concerned with your inventory.
Understanding accounting fundamentals can help you trust your finances, stay compliant throughout tax season, and avoid avoidable cash flow difficulties.
Whether you’re a Shopify, BigCommerce, or Amazon seller, the following are some of the top advantages of establishing solid accounting and bookkeeping systems and processes for your business:
An eCommerce business’s ability to consolidate sales has significantly improved thanks to digitalisation. On the other hand, having many sales channels can be overbearing.
Setting up an accounting strategy for your eCommerce firm allows you to manage your revenue better. You can track where a sale was made, regardless of the sales channel a customer used to check out a brand item. Hence, you can easily manage the growing inflow.
Stay on top of your bookkeeping if you want to optimise your cash flow management. Bookkeeping is important! It is the single greatest way to understand all of your eCommerce’s financial operations, and you cannot go without it.
For instance, you won’t need to get frustrated in figuring out how your revenue became a thousand dollars if you know the exact value of each sale over the month. You also won’t have to be confused about why your inventory has a surplus since your accounts will reflect the money you shed and attain.
Every business owner, even those in eCommerce, is required by the IRS to issue a physical sales invoice with each sale delivery. This obligation allows the agency to preserve business records and ensure that an organisation, firm, or individual pays the correct amount of tax.
In March 2020, the HMRC implemented the Digital Services Tax of 2% on the income of search engines, social media services, and online marketplaces that derive value from UK users. Large firms like Amazon, Facebook, and Google were most affected by this.
A business model is a brand’s primary revenue-generating strategy, and accounting is the foundation of any successful firm. You can gain clear insights into your company’s operations if you have a system for recording your transactions and expenses. More significantly, you can avoid unpleasant surprises when it comes time to pay salaries or taxes.
Here are some essential bookkeeping tips every entrepreneur must know to keep their business afloat in the eCommerce industry.
At first glance, combining your personal and business funds may not appear to be a major issue. Every business, however, should have a separate corporate bank account from any personal bank account. A separate business bank account is a wise decision that any business owner will decide on.
A separate bank account will save you time, effort, and confusion by making it more manageable to sort through the purchases and sales important to your business.
This separate account will save you time, effort, and frustrations by making it easier for you and your bookkeeper to sort through the purchases and sales important to your business.
We live in an age of cloud-based accounting software that allows you to access your business information whenever needed easily.
Technology allows us to sort through heaps of documentation, review spreadsheets quickly, and perform manual computations every month. Cloud-based software now conducts the majority of the workload for you.
Accounting software automatically sends invoices to eCommerce clients on the due date, tracks your incoming and outgoing expenses, and provides cash flow reports. There are numerous software options available. If you’re unsure which option is best, you can always consult a bookkeeping expert to get precise advice.
Every transaction of eCommerce businesses should be recorded and organised in a way that allows you to easily see and understand your cash inflow and outflow.
Keep track of all business records, including invoices, receipts, and costs, that will assist you in projecting future opportunities for your business and maintaining tax compliance in the event of an audit.
If you succeed in this task, all your future transactions will be easy to follow, and your accounts will definitely be transparent to any concerned party.
There are few things more satisfying than witnessing your company make money. You might realise you’re starting to generate a profit and decide to put your additional money back into the business as quickly as feasible. Spending profit on product development, marketing, and other growth activities is an excellent strategy to keep your firm moving forward – but don’t get too carried away.
Remember a percentage of your income must be set aside for tax purposes by the end of the year. You should save at least a portion of your total income to ensure you have enough money to meet your bills. If you’re having trouble keeping this money in your business account, open a separate savings account.
Cloud accounting platforms such as Xero, Quickbooks, and Reckon make it easier for business owners to manage their accounts without putting in too much effort. However, this does not exclude you from hiring a professional bookkeeper. After all, these software don’t input the values on their own, right?
When you hire a professional, you can ensure that your books are continuously updated and organised. When your books are professionally organised, you can make significant business choices with confidence because you have a clear view of how your company is functioning financially.
Managing your eCommerce books becomes easier when you and your bookkeeper have the correct tech stack and follow a strong process. Here are some activities that your bookkeeper can keep tabs on for you.
This begins with using cloud accounting software like Quickbooks, MYOB, Wave, and Sage Accounting. This will be your primary financial hub.
One of the benefits of using accounting software is that it interfaces with hundreds of software programs that your company may already be using to understand its finances better. This makes it effective for various business-friendly functions all in one place.
Maintaining up-to-date records of your transaction processing and evaluating your chart of accounts every week is very important. This guarantees that you are always looking at the most accurate financial data, which is critical when making decisions that affect your company’s growth trajectory.
Cash flow and inventory management are critical on a biweekly or monthly basis. This is to ensure that your accounts are in check over the course of the year.
Here are some steps you can take:
This is where you should analyse your company’s finances from the previous quarters, create new growth targets, and ensure your reporting is in quarterly order.
Spending a little time once a month or once a quarter to check your taxes are in order will help you prevent additional stress and compliance difficulties during tax season. You can also make necessary changes if needed to your business operations.
When you hire a bookkeeper from us for your eCommerce business, these tasks won’t have to burden you too much. Our bookkeeping professionals will do the grunt work of crunching numbers, organising receipts, and even documenting every transaction you make.
Let’s face it– with the fast-paced environment of the eCommerce industry. You’re going to need it.
Hiring a professional bookkeeper isn’t a new thing nowadays. However, finding a trusted and reliable one can be challenging. You can stop spending time looking for a reliable bookkeeper when you have us.
Pearl Lemon Accountants have competent bookkeepers that you can trust. Our team of talented experts will assist your eCommerce business in making accurate financial statements and transactions.
When you outsource with us, you can uncover more money-making opportunities and find ways to improve your profits while spending less.
Contact us now, and hire a competent eCommerce accountant today.
If you want to learn more about our accounting services, click HERE.
Managers use cash flow reports for budgeting and planning. A retail store must maintain dozens of inventory in stock; however, there is a time lag between purchasing inventory and selling to a consumer. A current cash flow report assists in planning for these lags and seasonal changes in retail sales volumes.
A bookkeeper’s hourly wage varies from $10 to $40 per hour. However, we don’t bind ourselves over the usual costs because we know every business and individual has different needs. The cost will depend on your needs and the services you require.
If you’re inquiring directly for yourself– contact us now to know our prices.
Bookkeepers in Pearl Lemon Accountants can help record and manage your company’s financial activities, such as purchases, expenses, sales income, invoices, and payments. They will enter financial information into general ledgers, which will be utilised to generate the balance sheet and income statement.
When you're thinking about starting a building company or your career as a builder, an innovative financial strategy is essential, rooted in accounting basics.
If you have an effective financial plan, you can reduce your administrative duties so they do not overshadow your customer relationships and ability to work independently. You can use accounting basics to reduce your company's costs, increase your profitability, and minimise your tax liability when you establish this strategy early in your company's lifecycle.
So if you want to build up your business's account, you need an accountant by your side.
We can be that accountant for you. Contact Pearl Lemon Accountants today!