In the early stages of a business, it’s easy to get caught up in all of the excitement that surrounds your launch. Business owners often run on pure adrenaline during those high-stakes days and nights, which means they can fall prey to making common accounting mistakes that can sink their ship. They’re not aware that their lack of attention is setting them up for disaster later on when it comes time to pull out the earnings reports.
Here are some common mistakes that could put your Shopify sales at risk:
Mixing Personal and Business Finances
Mixing business finances with personal finances is a big mistake for many business owners. You may want to keep things separate, but you might inadvertently put your company in hot water by doing so.
Not Keeping Accurate Records
Keeping careful records means more than putting all of your sales figures into a spreadsheet. Records are a list of every bank transaction, expense and sale, and they’re a solid way to keep track of your company’s earnings. If you don’t keep good records and you’re an average entrepreneur, you’ll be susceptible to making the following mistakes.
You may forget to record cash sales, or you’ll keep a loose tally of your expenses. You’ll break this rule when you’re tempted to buy a new computer, or when you want to spend more money on customer gifts than you’ve budgeted.
When you’re focusing on growth and development, you may think you can take advantage of your finances, but you could be headed for disaster because of this omission.
Getting an Accounting Tool Without Determining Your Business Needs
When you’re getting started with accounting, spending a lot of money on tools and software that you don’t need is easy. Determining your business needs is the first step in finding the best accounting system. You may need something that’s straightforward, or you may need something a bit more complex. Explore your options, and choose systems that fit your needs.
Not Understanding Your Tax Obligations
Most Shopify stores are legitimate businesses. You’re required to pay income tax on all of your earnings unless you’re using the income to finance your business. Take time to understand the income tax guidelines that apply to your business, and be sure you know your tax obligations before the government catches you.
Completing Key Financial Transactions Late
When you allow yourself to feel overwhelmed, one of the things that can suffer is your accounting. If you don’t handle your finances on time, you’re more likely to miss payments and fall prey to costly fees. It’s a good idea to set aside time to balance your books every day or pay your bills at least once a week. This way, you don’t have to rush the process when the time comes.
Don't Compromise Your Sales!
Here we talked about a few common mistakes that ecommerce businesses make every month that could seriously bury their Shopify sales if not dealt with quickly. Although it might feel like you have your daily tasks locked down, try being more methodical, and they'll be much easier to foresee and correct before things get out of hand.
What you need is a reliable accountant for ecommerce. With that, The Ecommerce Accountant can help you out. We have a team of business advisors to get your business finances in order. Get started with us!