Is your eCommerce business finally getting good results and making great sales like never before? Your business is finally growing, but so are your responsibilities. You might get hit by a tax bill that doesn’t make sense, or you’re probably struggling with keeping up with all your accounts receivables and payables. Well, if you’re in a similar situation, it might be time to call an eCommerce accountant that will provide all the bookkeeping, tax preparation, and management accounting services you need. This guide will talk you through why having an accountant maintain your books is essential for your business.
Bookkeeping and Accounting Explained
Bookkeeping essentially involves keeping a day-to-day record of your financial transactions. From product sales to purchase orders for supplies, all these are taken into account by your eCommerce bookkeeper. They store this information and organise all your transactions into the correct business area.
All that data that’s been stored and accumulated will later be used by accountants whose job it is to make sense of all the information and craft detailed reports about them. Accounting exists to gauge the financial health of a business and help you make informed decisions that will have an impact on your company.
Use Accounting to Your Advantage
As an eCommerce business, management accounting is going to be one of the most valuable assets at your disposal. This is where real growth starts, and you can finally focus on specific areas of improvement in your business. In simpler terms, management accounting uses the numbers to analyse and back up your decisions as an entrepreneur.
The Importance of Bookkeeping and Accounting
Like any business operating mainly in the digital space, eCommerce is also a particularly fast-paced industry. The success of any eCommerce business depends largely on your ability to maintain accurate and reliable key performance indicators available at your fingertips.
How are you supposed to keep up with your financial performance if you keep on worrying about your annual tax filing deadlines and your quarterly monthly business reports? Bookkeeping and accounting is there to take this off your plate and produce completely detailed and accurate financial reporting, which is crucial if you want to stay up-to-date and have access to your real-time business performance.
Have you ever looked closely at your product range and not know which of them brings in the most profit and which of them don’t? These are questions that an effective business owner must always have an answer to, which can only be possible by leveraging bookkeeping and accounting for your business.
When to DIY and When to Hire Bookkeepers and Accountants?
The simplest answer is that all businesses will reach a point where they need both to grow as a business. If you’re just starting with your eCommerce business, you can probably manage your company’s finance on your own early on. You only have a couple of staff members and a limited inventory to work with. Your customer base is still relatively small, and your product range isn’t all that varied for now.
As your business grows down the line, it’ll be an entirely different story. Once your business is starting to gain some traction and finally have the resources to hire an accountant or outsource the work to an eCommerce accounting firm, you’re on your way to growing your business even further.
Conclusion
Bookkeeping and accounting are two very distinct concepts that work hand in hand to bring about the success of your business. By understanding its importance, you can make better decisions and lead your company to even greater heights.
Never worry about filing your tax returns just when the deadline is right around the corner. Work with the Ecommerce Accountant to help you streamline your finances and get on top of things. Our team of young and innovative accounting professionals will work with you using our three-step process to becoming a profitable eCommerce business. Contact us to book a free strategy session today!