Did you know that the eCommerce industry generated almost $223 billion during the second quarter of this year alone? Simply put, there’s a ton of money to be had.
However, things can get hectic if you aren’t doing your accounting correctly. Even one small mistake can build up to a huge disaster.
Are you wondering what you need to know? Keep reading to learn all about doing eCommerce accounting in a super simple way.
1. Keep Finances Separate
The first step for a small business owner is to get a bank account that’s separate from their personal finances. This will allow you to track your cash flow from online sources. Getting your personal and professional finances mixed up can turn into a nightmare.
Aside from tracking the general cash flow, you should know how much money is coming in at certain times. That way, you can get a more accurate idea of your business’s health.
2. Learn About Payment Methods
As you continue selling merchandise, you’ll need to have at least one payment method for customers, if not more.
It’s best to know if any of these payment methods put a hold on the money you’ve made. There can also be processing delays that can take up to 5 days or longer.
All of this information is crucial if you plan on doing accurate eCommerce accounting.
3. Figure Out Essential Expenses
Adding up all your expenses is a requirement of diligent business ownership. From rent and electricity to site hosting and employee salaries, all of this must be kept track of to-the-T.
Failing to calculate insurance costs, for instance, will result in misleading profit figures. This can get you in trouble with investors, the IRS, and more.
4. Calculate Cost of Goods
Once you’ve figured essential expenses into your accounting books, you’ll also need to know exactly how much it costs to make the goods you’re selling.
This can get complicated, but the sooner you figure it out, the easier your accounting will become. Aside from the material cost associated with each product, there’s also packaging, shipping, and labor. All of this must be subtracted from your profit to get a net figure.
5. Invest in Software
Are you wondering how to make things easier? Accounting software, such as PayPal Quickbooks online integration, can allow you to keep track of an amazing amount of information.
It can also simplify calculations so you don’t have to stress over them.
Ready to Excel at eCommerce Accounting?
Now that you’ve learned all about doing eCommerce accounting in a super simple way, you can feel much more prepared and confident. There’s a learning curve to everything, but once you have the basics down, you’ll be able to get peace of mind and improve your skills over time.
The world of business and technology can be quite intimidating in general. That’s why we’re dedicated to publishing regular articles that simplify those topics and other relevant ones. You can ensure that you stay informed by browsing our site and bookmarking the homepage.