If you think you're free from bookkeeping tasks just because you're running an e-commerce business, then think again. You might find that carrying out e-commerce accounting can be a little more complicated than you might've expected. That said, if you're a relatively new business—or even if you’re a long-standing one—hiring an e-commerce accountant to do the job for you is an excellent investment to make, considering that you won’t have to worry about doing all the bookkeeping yourself or training one of your employees to do so.
If you're interested in an e-commerce bookkeeping solution, here are a few things to consider:
1. Bookkeeping for various payments
When customers pay you when purchasing through products online, they'll pay with either credit or debit cards. The great thing about this is that the sale is recognized right away, making the bookkeeping procedure much more straightforward.
That said, you're also given a choice to include other payment options. This might be necessary at times if the customers you're targeting are ones that usually pay using a check or even cash. While this means that customers are given a lot more choices on how they want to pay, it will cost you a little more effort to bookkeep properly. For example, if you've made a sale and they pay with cash, the transaction itself won't be recognized until the money shows up on your account.
2. Accounting for foreign sales
With your store built on an e-commerce platform, you're given access to a global market where people can take a look at what you have to offer and purchase it. However, this can wreak havoc on your bookkeeping, especially if the sale is made in a foreign country.
One of the challenges you'll have to face is how to deal with the difference between the foreign sale, as in the money they spent, and the final amount that shows up on your account. In some cases, the amount you receive is less than what you'd expect. In other cases, this can be more. This difference must be recorded into your account and labelled as "foreign exchange gain/loss."
3. Recording shipping costs
When it comes to shipping costs, you have different options on what you can offer. For example, for local buyers, you could provide free shipping or faster shipping with a small fee or charge all shipping. That said, you might also consider using a flat rate.
Whatever the case may be, when it comes to bookkeeping, this will depend on the e-commerce platform you're using. Some will integrate their platforms directly with the shipping service, meaning that you don't have to worry about charging and collecting shipping payments. You might also find some that will automatically purchase postage from a particular logistics provider.
Other than the three things we've shared with you, there are many differentiating factors you'll have to make, such as inventory tracking, refunds issuance, and the like. All of these things require bookkeeping to help you track where your money is going to and coming from.
That said, while you can do the accounting in-house, we will always recommend that you hire a professional e-commerce accountant to do it for you. With their help, you don't have to deal with missing numbers here and there, and you can rest easy knowing that your business financials will be in the hands of an expert.
If you’re looking for an e-commerce accountant in Australia, we've got your back. Get in touch with us to see how we can help.