While we’ve already discussed tips that will help you set up your eCommerce accounting systems in the first part of this article, there’s always more to learn when it comes to improving your eCommerce business management. Indeed, when it comes to managing your finances, it pays to be as informed as possible.
To help you out with this, we’ve prepared a couple of tips on setting up your systems. Hopefully, this proves to be useful in helping you maximise profits and keep costs at a minimum:
Familiarise Yourself with Sales Tax and Shipping Costs
Aside from familiarising yourself with the accounting tools, it’s also important you understand that running an eCommerce business is significantly different from running a regular business. Not only are there new strategies that you have to employ to maximise sales, but you’ll also need to successfully navigate the unique sales taxes attached to eCommerce.
Now, if you already are familiar with how sales taxes work, this isn’t an excuse to be lax with it. Just like other modern inventions, things are always shifting when it comes to eCommerce; this applies to the technology as well as the regulations that govern this industry. For this reason, it’s in your best interest to keep yourself updated about any potential changes when it comes to sales tax and other forms of tax attached to eCommerce.
Speaking of things that are constantly shifting, you must also be updated on shipping fees. What you have to consider is that the amount that you pay for shipping will change depending on the order size, your location, and your customer’s location.
Factor In Returns, Fees, and Losses
Keep in mind that taxes and shipping aren’t the only things that you’ll need to consider when it comes to eCommerce accounting. Two of the biggest things that you’ll need to factor in are the various fees that come with operating in the digital space and the possibility of potential returns.
You’ll also want to review your agreement with your eCommerce platform so that you have a better understanding of the associated costs that come with operating on it. Similarly, you’ll want to review which costs are variable and see if you can bring the costs down.
Returns are a little trickier, as there is no way to get rid of all the returns. It’s something that comes with the territory as customers are well within their right to send back a product that they are not happy with. This becomes even more problematic when you consider that returns can lead to a significant amount in losses if the product that is returned is too damaged to sell again, not to mention the manpower and resources needed to review return claims.
To help you prepare for the costs, you should take a closer look at your return rate and set aside the appropriate amount of funds to counterbalance the losses. This is a great way to minimise the damage that returns do to your business.
The eCommerce industry is one that’s growing at an unprecedented rate, and it’s indeed the future of how we buy and sell things on the Internet. This is why you’ll want to do all you can to make sure that you’re running everything optimally. We hope the tips we’ve shared above prove to be useful when it comes to improving and optimising how you handle your finances.
If you need more help with eCommerce accounting in Australia, our experts at The eCommerce Accountant have got your back. We can provide your business with the services that you need to maximise profits. Book a strategy session and start your partnership with us today!