If you're just setting up your eCommerce business, it can be overwhelming to set up payments, shipping, and other financial transactions. Learning how to do payroll for your employees can be even more difficult. But it doesn't have to be that way all the time. If you follow these tips, you'll have a smoother time with your eCommerce store accounting.
1. Record All of Your Expenses and Revenues
You may think you'll remember details of every expense or revenue, but it's much easier to keep track of everything if you do it as you go. Keep in mind that you can have multiple incomes or expenses at once, so keep track of all of them.
Whenever you get a dollar, write it down. Whenever you spend something, write it down. You're going to have to learn how to read an income statement, so start learning how to interpret revenues and expenses now.
2. Reconcile Your Accounts Regularly
Reconciliation is key to eCommerce accounting. There's a difference between what you think you made and what you actually made. If you don't reconcile your accounts regularly, you won't know how much you've actually made.
Keep track of your receipts and compare them to your books. For example, if you got paid by a customer, check your books to make sure you have the money in your account. Then add it to your records.
Reconcile your books on a weekly, monthly, or quarterly basis. It depends on how quickly you do your accounting.
3. Get an Accounting Software
You have a huge list of expenses every day, and having an accounting software makes it much easier to organise everything. Investing in an accounting software is a must, but they can be expensive. There are many free accounting software options, such as OpenOffice and Quickbooks.
If you want to go with a paid program, Quickbooks is probably the most widely used. It has a monthly and annual fee, depending on how often you want to update it.
4. Check for Errors
When you first set up your store, you'll be working with a ton of information. You'll have taxes, payments, revenues, and expenses. You'll have lots of information to keep track of, and that's before you do any accounting.
To make sure your accounting is correct, check for errors. If you make a mistake, you could end up overpaying your taxes or owing money to the government. It's much easier to correct an error early on before you have a huge problem.
5. Know Your Deadlines in Australia
You'll also want to know your deadlines. For example, if you're going to get an extension to file something, you want to know when to file. It's much easier to file an extension before you have to.
If you're going to sell something, you'll want to know about a few different taxes. You may have to pay GST if you're in Australia, which is 10%. Find out what your tax rates are, and make sure you're planning ahead.
Conclusion
As you can see, e-commerce accounting is a bit different from regular accounting. If you don't have an accounting background, it might be difficult to figure out. However, you can always hire an eCommerce accountant to help you out and make sense of everything.
The Ecommerce Accountant is a trusted name that's been helping small businesses through bookkeeping and accounting services. Our dedicated team will help you minimise your taxes and increase your profit to help you reach your business goals. Whenever you need an accountant for your online business, our team is always here to help. Book a strategy session today to get started.