So, you have started a new ecommerce business. Congratulations! It’s an exhilarating time for you but undoubtedly a hectic and overwhelming period, too. After all, it’s not just your products and your website to think about (although those already have your hand full). You also need to manage your finances.
Before you panic, though, know that you don’t have to handle things on your own. In fact, one of the best things that you can do is to get the help of an experienced accountant for eCommerce businesses.
In this post, we’ll share some of the accounting basics that you need to understand as an eCommerce business owner:
Intro to ECommerce Accounting Basics
Selling products online is indeed an excellent way to get your share of the market, increase your reach, boost brand awareness, and build a healthy margin. But for most entrepreneurs, knowing their products and customers are entirely different from understanding the financial principles involved.
Every online business needs a financial function that’s sophisticated enough to handle the tasks that you need it to do. Bookkeeping may not be enough. You need proper accounting so you can track your KPIs or key performance indicators including your inventory, the cost of goods sold, your cash flow, and gross profit to ensure that the business is running smoothly and that you are indeed making profit. You need reliable software that could integrate all the financial aspects of your business and help you comply with all the different requirements or laws in the countries you are shipping your products to.
How to Get Started with Accounting
To set up the accounting part of your business, the first step is to find yourself a dependable accountant who specialises in eCommerce. When you have someone knowledgeable on your side, it will be easier for you to navigate things.
You are also going to need a business bank account that you will link to your accounting software and other business-related software that you will be using.
How to Choose Your ECommerce Accounting Software
Your accountant will be able to help you determine the best programs that can be of help for your business. The right accounting software can help you in many different ways. For instance, cloud-based software allows you to see the transactional figures and key performance indicators anytime and wherever you may be, meaning you can always track things. Software also lets you automate most financial processes - there are tools for budgeting, forecasting, planning, and more. As your business grows, you’ll have to invest in a more sophisticated platform, too, that can help you manage your online sales, performance, logistics, and others.
Understanding Taxes for Your Business
Having a grasp of the regulations for online selling is crucial for any online business owner. The rules are complex, especially if you import and export products mainly because every country has its own set of tax laws and rates which can be hard to keep up with. Seasoned eCommerce accountants are familiar with how things work with different countries and they can recognise potential liabilities, too, so a pro accountant will be able to help you handle this and even refer you to reliable partners in other countries if needed.
This is just scratching the surface of what you need to learn about accounting for your online business. If you are to learn everything, it could take you years to completely master it. And because you have other aspects of your business to deal with, it could seem like an impossible feat. Let us reiterate what we’ve mentioned at the beginning of this post, though - you don’t have to handle things on your own. The key to having your finances in order is to find the right accountant for online businesses like yours.
The ECommerce Accountant can help you with that. As one of the trusted accountants for online businesses in Australia, we can lend you our expertise in accounting and other financial aspects of eCommerce businesses. Contact us today to know more about our services!