Any business needs effective bookkeeping to record and keep track of all the financial transactions. For e-commerce business owners, bookkeeping is especially important as the industry is one of the fastest-growing these days. As their businesses grow, bookkeeping can be as complicated as it can be given the sheer amount of work to do. E-commerce business owners can’t possibly keep on doing the task on their own. For this reason, you need to invest in an effective bookkeeping system.
Daily bookkeeping is a time-honed task that will never lose its significance in making things a whole lot easier for business owners in the long run. From your run-of-the-mill bakery to an e-commerce platform giant, the practice of updating books on a daily basis has allowed business owners from all industries to take the fruits of their labour to the next level. Making a point to update your books daily, however, has more significance than the usual notion of “because-they-said-so” that they’re attached to.
The benefits of daily bookkeeping
To better understand exactly why you should update your books every day (let alone care about doing so in the first place), let’s look at a few key benefits of the practice that can pull your business ahead:
1. Your books will be accurate enough to provide a clearer picture of your business’s financial standing
With the scope of e-commerce business being nearly limitless, having a flurry of numbers come in left and right will easily put your own company under the water if you don’t stay on top of the updates. Knowing your numbers and tracking them daily may be considered a feat in itself given today’s highly competitive and demanding atmosphere. Even so, updating your books daily will easily put things into a more accurate perspective without having to do anything drastic.
Jotting down each transaction that flows in and out every day paints a more accurate cash position, which essentially translates to making better financial decisions. Whether your business may be seeing positive or negative numbers, it’s a whole lot better to have accurate numbers than not knowing what’s going on in your business’s finances at all.
2. Any problems that might concern your business won’t be able to linger long enough
One common problem that has caused millions of e-commerce business to fail in a matter of months is the inability to spot any underlying problems due to inaccurate financials. Simple problems—such as overpayments, debts, accounts payables, receivables, and the like—can be easily overlooked with everything going on in your business. Letting these problems stay overlooked can cost your business big-time. By implementing something as simple as a 15-minute daily routine of noting down your transactions, however, it will be much easier to catch a problem early enough to resolve it within a day or two.
3. It will be much easier to loop investors in
If you’ve been looking to grow your e-commerce business far beyond the limits that your tiny office or garage has set for it, then you’ve most likely considered pulling in a few investors. Accurate financial records are one of the first things that any investor could request. As such, maintaining the accuracy of your books daily is a guaranteed way to convince any investor to put an initial deposit down.
As tedious as it may seem, updating your books daily can give your e-commerce business the advantage it needs to stay on top of any challenge or opportunity that comes in its way. Should you consider daily bookkeeping but are short on time, then it’s best to give The Ecommerce Accountant a call and see what we can do for your accounting needs!
If you are looking for accounting services for your e-commerce business, get in touch with us to see how we can help.