Bookkeeping in E commerce Industry
Starting an E-commerce venture and opening an e-commerce store is an exciting progression for any entrepreneur. With an online shop, your products are available day and night, year-round, to an international array of customers and because of that e-Commerce businesses have the potential to grow very quickly, the result of which many small and medium sized sellers have made a chunk of money. However, it is a very popular fact that E-commerce businesses see an initial flourish but gradually their profit margin starts declining. One of the prominent reasons for this high burn is poor accounting activities by online sellers.
It is a common myth that starting an ecommerce business on Amazon, Shopify, or a similar selling channel, you only need to focus on ordering inventory, managing inventory, shipping, driving traffic to your products, branding, etc. This is where many E commerce entrepreneurs and amazon sellers miss the hack “Accounting for your business”
Accounting In E-commerce
Accounting is a painful necessity. It’s the boring side of the business. But, if you want your business to grow, you can’t avoid it. As a business owner, you will need to maintain an up-to-date view of your finances at all times. When you have a clear picture of what your money is doing, you can get a better handle on your business spending. This allows you to develop and consistently improve your profit margin. Financial statements offer an organized view of this information.
- The first step towards organizing your finances is known as bookkeeping. In layman terms it is the recording of transactions that goes in and out of your business. Accounting for an online retail business translates to focusing on your inventory and cash flow. Your inventory is the bedrock of your business and almost everything you do is dependent upon it. Because of this, many of your financial documents and reports focus solely on your inventory.
- Since eCommerce is a fast-paced industry, monthly, quarterly, and yearly financial reports aren’t enough to ensure your business is on the right track. Instead, you need real-time data to stir your business in the right direction. This is where amalgamation of real time accounting comes in place with its comprehensive tools to make sense of such complicated data. As a e-commerce business owner, you get insights about your business financial health and how to avoid cash or inventory shortages
As an online seller and not having core expertise in accounting, you want to work with somebody who cares about your business almost as much as you do. To help you manage your ecommerce business we at Meru Accounting provide a full spectrum accounting solution. Contact Meru Accounting today to see how we can assist your business through our accounting and bookkeeping services.
Specialized E-commerce accountants VS Traditional bookkeeping
Bookkeeping might not be the favorite subject for many, but it has been around ever since the double-entry system came into existence.
It is a crucial tool to help E-commerce sellers and Amazon FBA sellers to keep a watchful eye on where their business stands financially. While some E-commerce and Amazon Sellers have taken bookkeeping seriously and have tried to integrate bookkeeping with their day-to-day business activities, still for many of them, it becomes too overwhelming to maintain accounts and focus on their business.
This is where specialized E-commerce accountants come into the picture as they have taken time to learn what is the key areas to focus on for Amazon sellers and make it easier for you to understand your business more by integrating your seller accounts with proper systems and processes for bookkeeping and accounting which will help you to make better decisions.
- Specialized accountants help you to understand trends through numbers which allows you to capitalize and grow your business. Whereas, as if you do bookkeeping by yourself, there is a high chance that you might overlook these trends.
- Proper accounting will ensure that all your transactions are recorded, and your cash inflows and outflows are correctly done, which at times might be missed when a seller does accounting on their own.
- Even outsourcing specialized accountants help to reduce the overall operating cost and time as you can hire them on a contractual basis.
- At times, it becomes difficult to understand the numbers that you procure through amazon; an E-commerce accountant helps you choose the best software for automating your accounts and gives you a clearer picture regarding finances.
- Specialized accounts help you reduce taxes and understand specific terminologies associated with E-commerce accounting and sales in particular.
- Finally, when you hire professional E-commerce accounting services, it certainly takes the load and pressure from your shoulders of preparing reports, filing taxes, studying, and analyzing results. Also, outsourcing bookkeeping services allows you to focus on other aspects of your business, which is very difficult when doing traditional accounting.
- Traditional accounting doesn't seem to fit with Amazon sellers, as accounting for Amazon involves many more challenges as it is done on an accrual basis and involves lots of terms and conditions, But one can certainly avoid all the hiatus and focus on profits and tap growth opportunities by outsourcing accounting and bookkeeping services from Meru Accounting
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Founder & CEO
STEVEN MONROE
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Founder & CEO
STEVEN MONROE
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Finance & Commerce
MICHAEL KING
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