The eCommerce industry is growing exponentially by the minute. Thanks to the easy and convenient shopping experience of purchasing an endless variety of items from your smartphone or computer, customers have fewer reasons to go to brick and mortar stores. Many Australian entrepreneurs have taken advantage of their popularity by creating eCommerce businesses of their own.
If you’re tinkering with the idea of starting your own online store or you’re in the process of running one, then you’ll need an e-commerce accountant to keep your finances in order. That way, you can sustain operations while making it grow every quarter.
Here are five bookkeeping tips to help you run a thriving eCommerce business:
1. Hire an eCommerce Bookkeeper
The first thing you need to do is to higher a bookkeeper that specialises in eCommerce. Seeking the help of eCommerce accounting services will help you take care of all the financial aspects of your business, especially if you don’t have basic knowledge of accounting and bookkeeping. They can help you understand what you need to do to stay compliant with tax regulations and other important financial decisions you need to make to keep your business afloat.
2. Use Accounting Software
Your eCommerce bookkeeper will know the best accounting software they can use to do their recordkeeping work, which takes a detailed log of all your transactions. They know how to customise the software to suit the needs of your business, helping you save time while diminishing the risk of manual errors. They can also sync the software with your website and supports to help them prepare your tax records and the Business Activity Statement.
3. Monitor Your Cash Flow
It’s essential to track the money that goes in and out of your business. That way, you can guarantee a healthy financial position for your company. Having an eCommerce bookkeeper by your side will help you boost the amount of capital flowing in your business while restricting the money that comes out. They can identify ways to cut down on excess expenses while ensuring that clients pay you on time.
Bookkeepers can also help you send out invoices right when your client receives the delivery, which is crucial to maintaining the flow of your income. Many businesses get choked by delayed payments, and when this adds up, it can cause any enterprise to sink.
4. Conduct a Break-even Analysis
Your eCommerce venture must ensure that you’re breaking even with your products. When your expenses amount to your income, any money you receive after this will be your profit, so knowing this amount is crucial to your success.
Knowing your break-even point will help you price products fairly while ensuring that you’re earning as much as you can. Fortunately, an eCommerce accountant knows how to determine this while helping you find the best pricing for your offerings. With this analysis, you can set realistic monthly goals while plotting the future course of your investments and business expansion. That way, you can make profits as soon as possible.
5. Maintain Ideal Stock Volumes
A steady availability of inventory is crucial to your business, especially for in-demand items. Having the optimum levels of stock will ensure that you fulfil orders and keep a speedy turnaround time, which is sure to satisfy your customers. Lacking raw materials, packaging, or the actual product will cause you to lose on sales and other customers, especially since they may not be amenable to waiting for a restock.
On the other hand, you must make sure that your warehouse isn’t overcrowded with inventory, as you may be negatively affected by price fluctuations. It’s best to meet in the middle by only stocking what you need with a few extras.
There’s never been a better time like the present to run an eCommerce store. However, there’s a lot that goes into making sure it thrives, and a part of that is hiring an eCommerce bookkeeper while keeping these tips in mind. That way, you’ll enjoy a healthy financial status, allowing you to reap the benefits of your hard work.
The ECommerce Accountant offers eCommerce accounting services in Australia to online entrepreneurs and influencers. With our financial expertise, we can help you minimise tax and increase profits. Contact us today to get started!