Why Your E-Commerce Business Needs Bookkeeping

• May 17, 2021

Setting up an e-commerce business is an exciting opportunity for every new entrepreneur and small business owner. While some aspects of running an e-commerce store are easy and fun, some, not so much. And if you are like most new e-commerce store owners, accounting and bookkeeping are probably your least favorite part of launching an online store too. But remember, as your small business grows, keeping track of the finances is only going to get more complicated.

Without sound financial planning and tracking your cash flow, your new business could soon run into financial and legal troubles. We are not here to discourage you and keep you away from your dreams of making it big in the e-commerce world. Instead, we are here to show you the importance of bookkeeping for startups and e-commerce owners.

Read on to understand how bookkeeping can help you and your business thrive–

• Bookkeeping gives you a clear picture of your finances

Probably one of the most important benefits of bookkeeping for e-commerce business is getting an instant overview of your financial health. Well-documented books allow you to quickly refer to your cash flow, your profits, your losses, your debts, etc. So you can make informed decisions for your business based on your financial status.

• Bookkeeping helps you track the nuances of e-commerce selling

Selling inventory online is not the same as selling it in a brick-and-mortar store. From understanding different tax rules and international transaction costs of maintaining various transactional data channels, there is a lot that goes into running an e-commerce store. E-commerce bookkeeping makes it easier to gather accurate numbers and keep track of the different unique aspects of your business.

• Bookkeeping makes it easy to detect fraud

When you are dealing with multiple stakeholders, it is common for some discrepancies and errors to occasionally crop up in your records. It is also common for people to manipulate data and misuse certain resources. Bookkeeping for e-commerce helps you reduce the chances of fraud and protects your assets, resources, income, and hard-work from being exploited.

• Bookkeeping helps you have a stress-free tax season

From understanding and identifying tax deductions and claims to estimating your taxes for the financial year, detailed and well-maintained financial records help you avoid the last minute hassle of making sure your finances are in place and keep you away from unknowingly committing any tax evasions and fraud.

While this might sound like a lot of work, especially for a first-time small business owner, taking the time to learn e-commerce accounting and bookkeeping can not only help you run your online store smoothly but can also help you upscale your business. But if you do not want to add another feather to your hat just yet, you can always approach established remote bookkeeping firms like Bookkeeping eSolutions to outsource your bookkeeping. Equipped with the right financial analysis tools and expertise, our e-commerce accounting services provide your business with personalized bookkeeping solutions so you can spend more time doing what you love – growing your business.