In this booming e-commerce industry, it’s easy to get caught up in a million different tasks. Proper e-commerce bookkeeping is one of them.
The accounting errors, if left unaddressed, can snowball over time, leading to financial and legal implications.
As a store owner, you sometimes have to wear an accountant’s hat. Knowing the basics of accountings is essential for making the right decision at the right time, and stay at the top of your game.
These are the most common mistakes e-commerce store owners make that you can avoid.
When traditional businessmen enter e-commerce, they manage their cash flow manually through spreadsheets. This is a colossal mistake.
There is always room for human error if you balance your books manually. It’s also unnecessarily tedious and time-consuming. If you want an accurate representation of your financial reports, automating your accounting system is the way.
Rather than using spreadsheets, opt for cloud-based accounting solutions like QuickBooks or Xero. With little maintenance, these cloud applications will allow you to access your accounts from anywhere in the world. Eliminate the hassle of updating your books, save time, and divert your focus to the core aspects of your e-commerce store.
Using the wrong software
After going for automation, choosing the right software for your day-to-day financials is the next important step.
There are numerous tools out there for you to explore. Wrong decisions regarding your accounting and business services can hamper the growth of your e-commerce store.
If the software you’re using doesn’t fit your needs, switch immediately.
Mixing personal and financial accounts
Although it seems convenient to keep your personal and financial data in one place, this mistake will cost you during auditing and tax planning
Whether you are a solo entrepreneur or not, maintaining separate bank accounts and credit cards is the best practice. This is because you want to objectively analyze financial data to spot the weak and strong areas of your e-commerce business.
This makes making decisions, like whether to hire more personnel or when to order the inventory, much easier.
Not tracking your cash flow
How much money are you investing in your e-commerce store? How much profit are you making? If you’re miscalculating the cash flow, you’ll lose investment opportunities.
During the early growth stages, you need more investment in your inventory. Here account reconciliation is important. Your accounts give a clear picture of your profits and investments, and whether you have enough money to run your business.
Track your inventory
Things that can go wrong with your inventory include:
- Incorrectly-listed stock levels.
- Product data mix ups.
- Incorrect data for products.
If your e-commerce store is selling on multiple channels, then you need to track your inventory. Losing inventory count means losing the cost of goods sold.
Integrate your stock level with the online bookkeeping service. they will keep an accurate and reliable record of your inventory levels.
Looking for online bookkeeping services in Canada? Accounting Plus is your friend. Their tax advisory, bookkeeping services markham and cloud-based solutions, will ensure maximum success for your business.
Contact them to avail their services.