Many are barely waiting to get their e-commerce business off the ground, but not many are fully aware of what happens after the takeoff. If you’ve watched any movie about rocket launch, you’ve seen that every ground control is crowded with people and that the most important task lies in monitoring.
Well, keeping track of things in your e-commerce store might make you feel you need the same amount of people for the job. Especially if you’re not good at math since finances can be a real nightmare. But that’s the thing with nightmares – they seem scary only until you take them apart and see where they’re coming from. Same goes for your e-commerce accounting – if you break it into pieces you can manage you won’t have to spend another sleepless night.
This probably sounds easier said than done, especially when you take a look at that shoebox overflowing with receipts and try not to look at your mailbox full of tax forms. But when you realize that accounting is a necessity (no matter how painful this might seem) it will become a natural part of your life. Sure, it is a bit boring, but so are things in life. If you don’t go through them you’ll never achieve more and you want your business to grow, don’t you? If your books are putting too much pressure on your shoulders we’re about to show you how to reverse that situation and get on top of them.
Get Your Rulebook
Every business is like a game. Those who come to the finish first make a bigger profit, simple as that. It is a furious race, and many people think they can skip reading the whole rulebook. But this is a game where it’s not nearly enough to roll your dices and try your luck. It is mandatory to get acquainted with the laws and regulations regarding business accounting in your jurisdiction.
Unfortunately, there’s no printed edition of this rulebook that comes with the game, which means you’ll have to do a bit of research. What you have to do is to visit a government site based on a country you’re operating in and find the financial and tax implications. Most governments have their own sites with such information. If online search leaves you in the dark you should find a tax advisor that will shed some light on the subject.
Another equally important aspect of every game is time. If you’re a person who has a hard time remembering birthdays, it’s time to start using a calendar. Tax deadlines can’t get offended for forgetting about them, but they have a nasty habit of sending pricey penalties your way.
Don’t Just Stash it Away
Keeping records of your financial transactions doesn’t mean simply keeping all the receipts somewhere in the house. You’ll end up with a bunch of missing documents which will cause an unbelievable amount of stress. If you want your accounting to go smoothly you need to do this in a systematic way as you go along. Every document that shows your income and outgoings should be stored in the right way, containing key details such as item information and transaction date.
Accurately recording your business expenses and revenues leads straight to tax deductions. You can reduce taxable income through your office expenses (most people run their stores from home), hosting and website domain fees, shipping costs, even professional services of accountants and bookkeepers. But you need to have the right paperwork in a clear and logical order.
It is extremely helpful to have digital copies of all these important files. Just make sure you assign them appropriate filenames, meaning they need to contain the date and the document type. There are a lot of apps such as Expensify, Shoeboxed, and Evernote which will help you with this paperless storing method.
Share The Burden
This doesn’t mean you can simply take all that paperwork and hand it to the first stranger who says he’s an accountant. You might think you’ll be just handing over a bunch of papers, but you’ll actually be handing them financial control. That is the best way to put the success of your business at risk.
The fact that you’ll be paying someone to do everything for you doesn’t mean that they’ll do it right, nor any better than you would. A lot of people know how to crunch numbers these days, but the best accountants for e-commerce business are the ones who will provide advice based on the specific needs of your online store.
This means it’s mandatory to find professionals who are willing to invest their time to understand your business – it is the only road to reaching the best solution. Of course, this also means that you need to know the basics yourself, so you can question and help them understand. This is what sharing the burden is all about.
Another way to take this paperwork nightmare apart is to choose an accounting software which you’ll integrate with your online store. There is a sea of apps you can use, most popular being Zapier, Xero, and Quick Books, just to name a few. With them, you’ll be able to see your past purchases and current inventory with just a glance, keep a running ledger of payouts and bank deposits, and easily catalog and generate invoices.
We don’t need to mention that this would save you a lot of time by cutting down on manual calculations and scribbles, keeping your books up-to-date and completely accurate. Keep in mind that choosing a software doesn’t mean you won’t be needing an accountant – it will only give them easier access to your business information and reports, with every transaction in place. We live in the times where man and machines work together.
As you can see, this business necessity doesn’t have to be a nightmare, but a natural part of your life in the form of a simple routine. In order to break it apart into manageable pieces, you need to be aware of the whole and keep it organized. Once you realize everything has its place you can simply take it as it comes.