For an e-commerce business, bookkeeping is an important component.
E-commerce business has its own pool of benefits — reaches a wider audience, and products are available for order, every time to customers while having a small warehouse.
While setting up a website and store are initial and important steps, your online store will not gain the grip if you do not engage in financial planning. We have compiled a few tips for bookkeeping to aid businesses in running a successful e-commerce business.
5 things to consider while bookkeeping for e-commerce businesses
First things first, figure out the challenges faced while e-commerce bookkeeping, and then find a solution!
- Which payment mode you are accepting?
Keeping track of payment type, will help you in seamlessly maintaining your records. While a few customers will make payments via debit cards, many will pay via credit cards. You can also decide to accept other payment types. Other payment types include cash, gift card.
While accepting all forms of payment may seem convenient to customers, it may complicate the bookkeeping process. E.g. Payments made via cash will not appear in your books until you deposit the money in your account.
- Are you tracking Merchant fees?
You need to pay some amount/fees in order to get your online store hosted on an e-commerce platform. The platform will help your start-up in search optimization, boosting sales. However, in exchange of that, the platform will take decided percentage from your total sales.
This can complicate the process of bookkeeping, as deposits in the bank account will be shown as net sales instead of gross sales. You need to record the difference and submit it as Merchant fees.
- Have you tracked inventory across platforms?
Major no. of e-commerce platforms has inventory tracking software in place which makes it easy to manage and track stock available for online sales. But, in case you sell in multiple places online — the software will not track your inventory from outside sales.
This makes it vital for ecommerce retailers to have one central place for tracking the stock. If you work with a bookkeeper, they can use that information to establish a right record of sales, restocks in your books.
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- Have you considered Third-Party Tools and Refunds?
Apart from e-commerce platforms, third party tools like Stripe, PayPal can add complexity to the bookkeeping. This becomes even more difficult when a customer returns the item as that fee turns into a loss for business and needs to be reflected that way in your books.
- Are you tracking Inventory Cash Flow?
Cash flow is the money that comes from your business monthly, quarterly, and yearly. By having a knowledge of the kind of money passes through your business, will allow you to maintain good profit margin
An organized inventory is one of the most critical aspects of accounting for D2C Businesses. It helps you keeping track of your cash flow.
The amount you list on your document for inventory cash flow should be completely related to your stock
At Sapphire, we have a team of expert bookkeepers who use unique tools to handle the most complicated e-commerce bookkeeping circumstances. Sapphire outsourcing is one of the early adopters of cloud computing. Apart from using all cloud-based accounting systems such as SAGE, IRIS, QuickBooks, Xero etc, Sapphire has developed its own enterprise software platform to manage workflow & increase productivity & customer satisfaction. Sapphire is pioneer in adopting new technologies to help you achieve digital transformation in your accounting department.
Get in touch with Accounting experts for bookkeeping service for your e-commerce brand. For more such tips, stay tuned!
