For many business owners, accounting is perhaps one of the most painful necessities they have to deal with to keep their business running smoothly, especially if it’s an eCommerce business. While that remains to be a fact, doing your accounting obligations properly is much more beneficial to your business, especially if you follow these tips:
1. Preventing Manual Errors
This is one of the most basic tips, but it’s also a very important one. By entering all the data accurately, you will prevent yourself from having to spend too much time on data entry, and most likely, you’ll skip lots of errors that might have occurred.
2. Updating Your Tax Declarations
If you are a UK-based business owner, you have to report your income and any tax you pay in the UK, even if you’re not residing there. If you don’t file your taxes, you could be susceptible to penalties imposed by the tax authorities.
3. Setting Up Pre-Sales Invoices
If you’re using a pre-sales invoice, you will save a lot of time and paper. It’s a good idea to print a signature page of blank pre-sales invoices and keep them on your computer. If a customer places an order, all you have to do is create an invoice, print it and dispatch it.
4. Calculating Your Margin and Profitability
This is a must for any business owner. Make sure you’re not just estimating your margin but calculating it. Underestimating profits can be more harmful than beneficial, but overestimating them can be equally damaging.
Being able to calculate your margins can help you gauge where you stand and give you an idea of where to make improvements. You can start by really analyzing your business’s profit margins and see if you can do things like reduce your product or service costs or improve your website's conversion rate.
5. Considering the Cost of Doing Business Internationally
While you might never have thought of it, accounting is not limited to your business’s geographical location. If you have customers in other countries and you sell to them, you’re expected to follow that country’s guidelines for recording your business’s activities. This can prove to be a challenge to even the most seasoned business owners and entrepreneurs.
6. Avoiding Double or Triple Counting
If you set up a spreadsheet or use accounting software, you should know how to avoid double or triple counting. This is important because if you apply the same formula to several cells, you have to make sure that the results are accurate. After all, if you don’t, it will all fall apart.
7. Dealing with Fixed Assets
Any business will eventually accumulate certain pieces of equipment or furniture that are very useful because they help the company’s productivity. To keep it simple, you should think about fitting such purchases as fixed assets.
The above tips are meant to help you make the most out of your accounting process and to help you save time and money every step of the way. There are many facets of your business that you have to take into account when dealing with your accounting duties, and some of these might not be apparent to you at first. By following these tips, you should be able to handle everything with ease and know what to look out for in the future.
Turn to The Ecommerce Accountant when it comes to managing your finances and keeping track of your tax obligations. By working with our passionate and experienced accounting team, you can easily get all the guidance you need to manage and grow your business. Accounting for eCommerce businesses is just a lot easier with the help of The Ecommerce Accountant. Book a free strategy session today!