Bookkeeping Basics for E-Commerce Businesses
Learning the basics of e-commerce bookkeeping helps you understand how your online store is doing.
Here are the fundamental activities to remember when doing your bookkeeping for e-commerce.
1. Use cloud accounting software
Cloud accounting software automates manual and time-consuming bookkeeping tasks, making your life easier.
Its strengths include:
- Integration with multiple e-commerce platforms and online marketplaces.
- Allows you to track and record transactions in real-time.
- Features a dashboard that gives you an overview of your finances.
2. Track your cash flow
Make sure to set a regular schedule to calculate your sales and profit. This way, you can see if your business is profitable. And if not, you can devise strategies to increase your sales before you burn cash more than you can handle.
3. Keep receipts
Keeping receipts of official business transactions is essential in separating your taxable and non-taxable income and identifying all deductions during tax time.
Tips for efficient recordkeeping:
- Digitize your receipts
- Use cloud accounting software to keep records
- Find out how long you need to keep receipts based on your local records management regulations
4. Calculate how much you need to break even
Your break-even point is the stage where total revenue equals total costs. Knowing how much you need to break even lets you set better sales targets to cover all your expenses while generating enough profit.
5. Monitor your inventory
Keeping your inventory levels in check allows you to manage consumer demands without overstocking or understocking. It also gives you an idea of what items are in-demand year-round, in a particular season, or not at all — thus, helping you decide what products to sell.
Are you looking for e-commerce accountants?
D&V Philippines is now offering specialized accounting and bookkeeping solutions tailored for e-commerce businesses.
Contact our team today to find out what services we have for you. You can also download our latest guide, Succeeding Online: Refining Your Accounting Processes through Technology and Automation, for more information on our e-commerce accounting solutions.