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Accounting Best Practices to Remember for Business Growth

Good accounting practices are essential for any business, large or small. They help to ensure accurate and up-to-date financial records, which are necessary for making informed decisions. Accounting best practices should be followed to ensure accuracy, consistency, and compliance with laws and regulations.


In this article, we will list some of the most important accounting best practices to remember and where to find an accountant for an e-commerce business.


Estimate of High Costs


Maintain a detailed record of all regular account payables, and create an Excel spreadsheet with a weekly budget. You can control your spending and pay for major expenses like a new warehouse location, more aggressive marketing, or additional inventory. You'll constantly be conscious of your commitments in this manner.


Pay Close Attention to How You Handle Your Inventories


The immobile inventory costs the American retail industry $50 billion annually. Calculating such numbers will result in an enormous inventory building that will negatively affect your liquidity, assets, and bottom line.


The same is true for raw materials; resist the urge to overbuy unless you are sure that you can use the entire quantity. The expense of storage will ultimately surpass any volume discounts you receive. Choose a minimum and maximum amount of inventory based on your budget and anticipated cash flow.


Put Money Aside for Time and Taxes


If you converse casually during tax season, it could be challenging. One-third of small business owners devote almost 80 hours or two work weeks to tax return preparation each year. Your dedication to keeping precise records all year long will pay off greatly. Set aside 30 and 40 percent of your company's annual revenue for tax obligations at the end of the year.


Accounting Issues to Consider and Resolve


Delaying Evaluation of Financial Statements


Don't categorise your spending until the end of the month or, worse yet, the fiscal year. You risk missing something important when there are thousands of documents to review. Little things like an unclaimed deduction qualify. You might have needed to amend your tax returns because of a significant omission.


What requires replacement: Every month, set aside 2 to 3 hours to review and classify all the financial documents, followed by a bank account reconciliation.


Neglecting Errors


You'll make mistakes if you complete your books quickly. Your financial objectives could be jeopardised, and you could incur losses due to a bookkeeping blunder. If you disregard them, they can spread to your tax returns. You will then need to submit an amended tax return. Once more, it's not the most enjoyable activity.


Instead, automate your accounting to eliminate human errors and discrepancies. A chief financial officer (CFO), a certified public accountant (CPA), or an internal e-commerce accountant should be hired after you've created a budget to assist you with tax reporting.


Conclusion


Overall, accounting best practices should be kept in mind when managing finances. This includes understanding the different types of accounting, setting up an organised system for tracking expenses, following proper procedures for recording transactions, and consistently reviewing financial records.


Additionally, businesses should use reliable and secure accounting software, seek professional advice for an e-commerce accountant when necessary, and develop a system of internal controls to ensure accuracy. Following these best practices can help businesses ensure accuracy and efficiency in their accounting practices and promote financial stability.


The ECommerce Accountant provides the best business advisors for online stores & influencers. Contact us to speak with an e-commerce accountant!

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