The beauty of modern times is that there are so many different possible income streams. You can become an influencer or streamer, start an online retail business from home, or even dabble in content creation. Whatever you want to do, there is likely a pathway to monetising it.
That being said, these income streams come with their own financial concerns, such as bookkeeping and ECommerce accounting. One might think that they all fall under the umbrella of accounting, but this couldn’t be further from the truth.
In this article, we are going to talk about the stark and subtle differences between bookkeeping and accounting to help you understand your finances better. The better your understanding, after all, the more easily and more effectively can you manage your income.
What is bookkeeping?
This is the process of recording and tracking financial transactions, including but not limited to purchases, sales, receipts, outflows, list cost of sold goods (COGS), payroll, operating expenses, and so on.
The books, as they are called, will provide valuable information to your accountant. From there, they can identify problems and patterns in your cash flow so that these issues can be addressed.
Some other benefits of meticulous bookkeeping are as follows:
Clear information from your finances
The capacity to build financial stability
Better management of cash flow
The establishment of clear benchmarks for growth
The ability to create better forecasts
Better and more accurate decisions about your future
In-depth data analysis
Prevention of tax errors
What is the role of an ECommerce Accountant?
Essentially, a bookkeeper is the camera operator to the accountant’s director. The bookkeeper records and tracks the raw data, and the accountant performs the complex analysis. Essentially, they are the one making sense of the numbers.
After that, they can make recommendations as to how you can improve the finances and operations of your business using their expert knowledge and valuable experience.
How can I improve my bookkeeping for my ECommerce Accountant?
One rule in bookkeeping and accounting is that the more frequently you take the time to handle it, the better your records will be. However, for a lone entrepreneur or a smaller business, it might be more difficult on top of the many tasks you are likely to have. As such, you must maintain a schedule of daily, weekly, biweekly, monthly, quarterly, and yearly financial tasks so that you can stay on top of it.
Using the right software for your operations and finances, such as DEAR and Inventory Planner, can help you keep better track of your cash flow, net worth, and other relevant details. If you have an accountant, consider asking them about which software solutions are the best for your business.
Whether you are a streamer, content creator, influencer, or online retailer matters not. Your income and expenses must be managed properly for any financial endeavour to remain sustainable. If you want to succeed at being an entrepreneur, you need good bookkeeping skills and the aid of an accountant.
If you’re in need of an ECommerce Accountant in Australia, send us at The ECommerce Accountant a message. We help entrepreneurs achieve financial stability while pursuing their passions.