Bookkeeping is a good way of keeping tabs on your business' finances. Aside from the fact that it is an efficient way to measure your venture's earnings, it is also a great way to look at the losses in the hopes of minimising them next time around. While it may not be a simple task overall, it is a vital role that needs to be accomplished regularly in order for your business to thrive.
Even if your venture is all about eCommerce, the act of bookkeeping is still a must-have. The nature of this business is filled with numbers—so much so that each and every step taken should be tracked and noted down. If you still aren't convinced, though, then the following reasons may explain how bookkeeping is important in this type of business.
It Provides a Forecast of Your Business' Next Few Steps
Do you know where your business is headed? Is it going in the right direction, or is it going towards a few losses?
Bookkeeping would give you an idea of your venture's current standings and its upcoming future. Even though it's just a record of numbers and computations, it would enable you to see your business' progress through the lens of an accountant, giving you an inside look into the inner workings of your profits, losses, and taxes!
It Prevents Any Oversight in Running Your Business, Especially with Taxes
Everyone is required to pay their taxes. Even an eCommerce venture such as yours isn't exempted from this obligation!
Bookkeeping would at least show you how much your company has to pay in order to comply with the governments' mandate towards taxes. It would also show you a comparison of the taxes you paid last month over the ones you'd have to pay this month. The change in numbers would be beneficial in finding out whether or not your business has been thriving.
It Enables You to Flush Out Any Fraudulent Activity
Aside from you and your employees, others are counting on your business as well. Some investors and stakeholders also have a say regarding the processes and the business model itself.
With that being said, there are times in which some of them may be tempted to take unnecessary shortcuts. This usually turns into an illegal activity such as money laundering, with your company as the perfect coverup for unlawful transactions. Weed out the fraud and illegal activities in your venture and avoid being an unaware accomplice.
It Enables You to Identify the Different Ups and Downs of the Ecommerce Business
Bookkeeping would tell you about the transaction fees and the international conversions that go along with it. While it may seem irrelevant at first, ignoring this aspect of your business may deem too costly in the future, especially when they reach the thousands. Knowing the international rates would motivate you to keep up with the ever-changing prices and decide whether or not you have to change something in order for your venture to survive.
Conclusion
The eCommerce industry is a profitable venture that everyone is interested in getting into nowadays. While it may seem like a practical way to buy and sell products online, it can also be a valuable platform to promote other industries' merchandise and services. With this business model, it would be wise to implement bookkeeping, as there are various numbers that may or may not affect your venture in the long run. Seek the help of an eCommerce accountant and be "in the know" when it comes to the numbers.
If you are looking for an effective eCommerce bookkeeping service, look no further than The ECommerce Accountant! We are a group of young and innovative accountants with years of experience in bookkeeping and finance. Contact us now for more information about our accounting services.