4 Reasons Your E-Commerce Business Needs Bookkeeping
Launching an e-commerce business is incredibly exciting, as you’ll bring life to your business idea without needing to worry about some extra expenses, like a physical storefront. Although some parts of running an e-commerce business are fun and seamless, others require more attention and care. If you’re like most new business owners, accounting and bookkeeping are probably the least exciting part of launching your new venture. Still, keeping a close eye on your finances is essential to ensuring the good health of your business, or things can go downhill quickly.
Without monitoring your cash flow and proper financial planning with a small business accountant, your freshly launched business could soon veer into trouble. To ensure you maximise your chances of success, here are four reasons your e-commerce business needs bookkeeping services:
1. It Helps You Keep Accurate Numbers
Keeping track of your online inventory works differently than doing it in a brick-and-mortar store. While running an e-commerce operation eliminates a lot of expenses, there are still many things involved in it, like knowing the different tax rules and international transaction costs of offering other transactional data channels. The good news is that getting a bookkeeper will help you collect accurate numbers and monitor the different aspects of your business, ensuring you’re on top of everything.
2. It Offers an Accurate Picture of Your Finances
One of the primary benefits of bookkeeping is that it gives you an immediate outline of your financial health. Correctly filled out books enable you to refer to your cash flow, losses, profits, debts, and other vital figures right away. That means you can make more informed decisions for your business using your financial status as your basis, improving your chances of growing and succeeding.
3. It Makes It Easier to Identify Fraud
Dealing with numerous stakeholders raises the risk of discrepancies and errors, which will inevitably appear in your records. However, it’s also common for people to abuse specific resources and change the numbers in their favour. Luckily, getting a Gold Coast accountant to do your bookkeeping for you will drastically reduce these instances, thereby protecting your resources, assets, income, and business from being exploited by unsavoury individuals.
4. It Makes Tax Season Simpler
Tax season is easily one of the primary sources of stress for entrepreneurs. Understanding and identifying tax deductions, claims and estimating your taxes for the financial year are complicated enough to cause headaches. However, having well-maintained financial records will help you avoid last-minute stresses and panic in keeping your finances in order. By getting bookkeeping services, you won’t have to worry about unknowingly committing tax evasion or fraud.
Tips to Stay On Top of Your E-Commerce Bookkeeping
Managing your e-commerce bookkeeping can be daunting, but it can be made easier with a few tips. For starters, use accountancy software, which will make the number-crunching much easier. While it’s best to hire a company accountant to do your bookkeeping for you, they can recommend and teach you how to use the software if there are some figures you want to review.
Tracking your cash flow is also an essential part of running your business. Having a healthy cash flow is critical for growing your business, and having a negative cash flow can quickly upend things. Luckily, you can avoid this by looking after your profit and monitoring your cash flow.
Lastly, identify your break-even point. Knowing your break-even point will tell you how much profit you need to sustain your e-commerce store. This figure is where your total cost and revenue are equal, meaning there is no net loss or gain.
Taking care of your business’s bookkeeping can be tricky. However, it’s a worthwhile investment, as it is vital to your e-commerce store’s health and success. Luckily, you can hire a small business accountant to take care of this for you, making it easier to run your business.
New Wave Accounting has the best accountants on the Gold Coast to help you with all your accounting and bookkeeping needs. We provide end-to-end services that help scale and grow your business. Contact us today to find out more about what we can do for you!