As we previously mentioned in the first part of this guide, two of the most vital processes that your eCommerce business’s Shopify account will depend on are accounting and bookkeeping.
With both of these key financial processes as the bread and butter of a business’s stability and success, it’s clear that there’s no better time to start doubling up on your efforts than today. In fact, to say that proper financial management is essential for profits, conversions, and top-level performance would be a complete understatement at this rate.
Fortunately, getting your accounting and bookkeeping practices up to speed won’t call for immense trial-and-error attempts because we’ve got you covered with this guide on all you need to know:
Key practices for better accounting and bookkeeping
Although it may sound like a rather intimidating effort at first, improving your Shopify accounting and bookkeeping systems and keeping them compliant for success requires taking the right practices into mind and making them a habit. As the list of valuable tips and tricks continues to grow, here are a few tried-and-tested best practices that can make the biggest difference in your business’s financial performance:
Best practice #1: Accrual accounting
ECommerce businesses usually thrive on the use of accrual accounting because of how the system’s nuances are best tailored to Shopify’s processes.
The main reason this type of accounting is especially recommended for Shopify accounts is that it fares better with the fast growth and big sales spikes that affect online firms. Additionally, an accrual-based system is especially vital for eCommerce businesses because their financial structure has a significant amount of complexity embedded in it!
Best practice #2: Regular recording
Hundreds to thousands of Australian businesses fail annually because they overlook the need to follow one bookkeeping practice: regular recording.
As tedious as it may seem at first, keeping your books up to date at all costs is a vital practice that will remain because of how it keeps all your business’s numbers accurate and up-to-date. By taking 15 to 30 minutes to record all the transactions, inflows, and outflows that your business incurred for the day, you can give your future self an easier time when it comes to forecasting and making informed decisions!
Best practice #3: Financial forecasting
Speaking of getting a better look into the future, another essential practice that you’ll need to follow as you strengthen your Shopify accounting processes is financial forecasting.
Thanks to the way the eCommerce platform itself is built and how well it integrates with financial tools like Xero, you’ll eventually have copious amounts of data from your transactions and operations. Once you have enough data to work with, you can start creating forecasts that will best aid your business’s operations in the future and make more sense out of both your accounting and bookkeeping efforts!
Best practice #4: Outsourcing
Unless you have an accounting degree under your belt, there will be more financial matters in your Shopify account that are best left in the hands of an expert—especially when you have less time for accounting and bookkeeping. With the help of The ECommerce Accountant’s experts, you can keep your financial operations airtight and help ensure that everything’s running smoothly on the numerical side of operations!
Conclusion
Running a successful Shopify store for your eCommerce business is an effort that requires getting all the details right, especially in your accounting and bookkeeping work. With the help of the best practices mentioned above (and the key points mentioned in the first part of this article), you can help take your business to the next level and rake in more results in no time!
If you’re looking for a reliable and affordable accountant in Australia, our experts have got you covered. We offer various services that can improve your venture's profitability rate, so get in touch with us today for a free consultation!