Accounting is necessary to run and keep track of your business’s many moving parts. Although some people think it’s the boring side of running an enterprise, it’s actually the most crucial part of keeping it alive. If you mishandle your accounting, you’ll end up losing your company’s footing to financial losses and tax violations. This is why it’s necessary to stay on top of all the accounting tasks you need to handle as a business owner.
Accounting tasks for your eCommerce business
The eCommerce platform is steadily growing to become the best place for many brands and businesses. Since more consumers prefer to use digital platforms for business transactions, it’s much easier for eCommerce businesses to find success in today’s market and consumer demographic.
Many people tend to fear numbers and computations, but they’re not as complex to understand as you might think. In reality, most accounting tasks are really just everyday business practices that will help you run a successful company.
If you want your eCommerce business to be successful, here are three accounting tasks you should learn to do:
1. Tracking your cash flows
Understanding the inflows and outflows of your business will help you make long-term decisions. If you start noticing that your debts and payments are going beyond your sales, you may have an issue with unsustainable income. Tracking your cash flows will prevent you from going over budget or resorting to loans to maintain your operation.
One way to arrange your cash flow information is to set up an excel sheet of all your mandatory debts, such as operation costs, logistics, rent etc. Doing so will give you a rough estimate of how much your break-even revenue figure will be per month. Add another row for your inflows in the form of product sales or subscriptions. Another tactic to maintain a steady cash inflow is to offer paid memberships. This will give you a set amount of income monthly without requiring immediate product sales.
2. Oversee payment timings
Part of tracking your cash flows is making sure that your customers pay their invoices on time. Timeliness is necessary to avoid incurring any late fees or issues with your deliveries or orders. Some payment methods will be more delayed than others, so you have to consider this when paying your outflows. Don’t be afraid to demand payment from your buyers, especially if it’s long overdue.
3. Determining your inventory
Being in the eCommerce industry requires you to pay attention to your supply and customer demand. It’s a standard principle of marketing that will affect how well your business can scale up in the future.
Remember that your inventory doesn’t just include the item price per unit. You must also consider its packaging, shipping costs, and courier fees if applicable. Setting aside a matrix of all these expenses will make it easier for you to project the potential costs of investing in more product units to match the public’s demand.
It will be challenging to pay close attention to your business’s accounting as your company grows. This is why many business owners opt to outsource their accounting to reputable accountancy firms that can dedicate their attention to your financials. Delegating work to a professional gives you more time to focus on your enterprise’s expansion while your accounting practices remain sound and foolproof.
Maintaining an eCommerce business will get harder and harder as you gain a larger customer base. We can provide you with eCommerce accounting services in Australia so that you can focus on your company’s growth. Book a free strategy session to partner up with our accounting specialists today!