Many new businesses of today utilize online platforms, such as Shopify, to manage and run their company while running an online store. It is incredibly convenient, cheap to use, and has all that a company needs to run.
Are you just getting started with a brand new company and wanting to utilize Shopify to reach a bigger audience? Here are a few accounting-related tips to help you grow:
1. Track Your Profits
One of the most critical tasks for any business to take on is to figure out its profitability. In other words, you must know how much you're making or losing. To do this, you will have to take a look at your profit and loss report.
If you've paid attention to your business classes, you know that to start, you will first have to calculate your company's gross profit (or gross margin). It is calculated by taking your net sales and deducting it with the costs of goods sold. After that, you will need to take your gross profit and deduct it with all your operating costs and your overheads. When that's done, you get your net profit. This figure is what will tell you whether you're making money or losing it.
2. Keep Tax Rates Up to Date
When using Shopify, tax rates are generally already calculated for you. If you're only dealing with local customers, that's fine, as the tax rates are going to be the same for all your local customers. However, you will need to start paying attention to tax rates when it comes to your global audience. Customers from around the world deal with different tax rates. At the same time, some people have the benefit of avoiding tax like VAT. With all these tax rates and exemptions to keep track of, help from your local tax authority is going to be required.
3. Generate Important Reports
When it comes to accounting, there are many reports to be made. Reports, such as sales tax reports, profits and losses reports, and inventory valuation reports can help you keep track of the state of your company. It allows you to identify any ongoing issues that would be otherwise hidden if not for the report, such as diminishing cash flows and so on. Reports can also help you compare your documents with a bank statement, helping you figure out if any numbers are wrong or do not match.
4. Prepare for Deadlines
One of the most significant deadlines you have to be aware of in the world of accounting is the end of your tax season. In other words, you will need to be prepared for your annual tax deadline. Preparation is the key to success, and doing so will not only help you fulfil all the requirements, eliminating any penalties, but it can help you identify any tax deductions you can take advantage of.
By following the four tips we've given you, you can be sure that even while you're addressing a global market when you're still small, you can be sure that your accounting efforts are going to help boost your company. Remember, if you're struggling to do any of these by yourself, don't be afraid to hire a certified accountant. They're one of the best investments you can ever make, making sure that your business's accounting is as good as it can be.
If you are looking for an e-commerce accountant in Australia, get in touch with us today! We’re happy to help.