The biggest difference between fast-growing eCommerce businesses who are able to sustain that momentum for a long… Every eCommerce entrepreneur has their own risk tolerance. However, when it comes to taxes, it is generally better to be safe than sorry. Unlike your P&L and balance sheet, it is a more hands on report, where you can model best case, moderate, and worst-case scenarios.
We help your business mature & advance by combining ecommerce-specialized accountants, established processes, and tech solutions, fostering your growth. Our team ensures an accurate A/R balance, providing clarity on paid vendors and those requiring collection services. Our payroll service will give you and your team confidence in payroll accuracy and timeliness. Errors usually occur when businesses purchase new inventory. When inventory is purchased, bookkeepers or small business owners will often immediately enter the cost of purchasing that inventory as COGS.
If you can figure out what caused the spike in sales, you can then double down on what’s working. These tools help provide you the insight and confidence around what’s available to be spent and when. In addition, here are a few accounting terms that it is important to know, as they’ll be referenced a bit in this guide.
Your chart of accounts is basically an index of all the categories you are going to use to organize your transactions. A cash flow forecast is a tool you can use to better plan for the future. If you ever need a bird’s eye view into your business, your balance sheet is a great starting point. It allows you to take stock of all of your assets (what you own) and liabilities (what you owe). Our onboarding process ensures we understand your business and provide the best possible service to meet your needs. Based on our discussion, if we’re a good fit to work together, we’ll provide you with a proposal.
For example, if your VA has access to your bank accounts, running a reconciliation report on a regular basis ensures they aren’t stealing from the company. Get investor-grade financials that are clear and ready to present to investors or buyers. Whether you’re ready to sell in the next few months or a ways down the road, having clean, accurate accrual accounting is crucial to valuing your business correctly. Cash basis accounting tracks transactions when cash changes hands, while accrual basis accounting records them when the transaction occurs.
Myth 2: If you DIY your bookkeeping with Amazon’s default reports and an Excel spreadsheet, you’ll save money.
The advice you receive from your accountant and bookkeeper will only be as good as the information you share with them about your business, growth objectives, and challenges. For example, if you only give them basic information, they are going to provide you with more general advice and best practices. Then, your bookkeeper can what is the journal entry of cash received go in, follow the processes you and your accountant establish, and up to your financials each week. The primary difference between cash-based and accrual-based accounting is timing. When you have a financial system and processes in place, you can make more informed, data-driven decisions about the trajectory of your business.
- As companies grow, they must incorporate integrated tools into accounting and operations processes to communicate finance information across stakeholders.
- Sage 50cloud $48.17 per month (when paid annually) and up.
- Then, each month you subtract your COGS from your inventory to get a new inventory balance.
- We manage global intercompany activities, currency transactions, acquisitions, investments, internal controls design, and more.
- Even if it is only 5% of your total sales, having a Shopify store and/or selling on additional channels diversifies your revenue streams.
Manually recording COGS and inventory can be complicated and time consuming. Once again, we recommend using A2X – (yes, get emotional again). A2X will automatically update your COGS and inventory information. It can get a little complicated when diving into these steps. If you find this to be true, read for more details on accurately recording COGS and why COGS matters.
Then, either you have to fix them or you have to pay extra money to your accountant to clean up your VA’s work at tax time. Your dedicated accounting manager will review your financials monthly and guide you in making sound business decisions. You gain an entire team of ecommerce accounting experts with years of experience & knowledge dedicated to your success. My financial statements and bookkeeping have literally never been in better order, and it is easy and a pleasure to work with every member of the LG team.
Best Accounting Software for Small Businesses
We’ll then guide and show you how to analyze the data to make key business decisions. Know your real-time financial situation to make data-driven decisions and solve problems proactively instead of reactively. In partnership with A2X, we created a tool to help called the eCommerce Bookkeeping Checklist. It lists all the bookkeeping tasks you need to do on a weekly, monthly, quarterly, and annual basis to stay on top of things. For information on how to set up your chart of accounts, watch this video – Setting Up Chart of Accounts in QuickBooks Online | For Online Sellers.
This is how we build the numbers while you focus on growing your business.
Very easy to onboard and require very little from me to get the job done! Our account manager is so responsive and has handled so many things for me that would have been a huge hassle. Slay your bookkeeping and know where your money is going.
Meet Amazonians working in Accounting
Having a true double-entry accounting system in place with balance sheets and reconciliation capabilities leaves less room for error. What are the best practices for eCommerce inventory management? Even if it is only 5% of your total sales, having a Shopify store and/or selling on additional channels diversifies your revenue streams.
You get insights into your sales trends, cash flow, and overall business performance. Armed with this knowledge, you can steer your ship towards success with confidence. For access to the most useful reporting features, choose either QuickBooks Online Plus or Advanced instead of the less-expensive Essentials or Simple Start. QuickBooks Online Plus allows you to set up class and location tracking, which will help you determine what segments of your business are most profitable. You can also track inventory in QuickBooks Online Plus. We believe everyone should be able to make financial decisions with confidence.
You will get lost on how your business is truly performing, and the value of your assets will be inaccurate. As already mentioned, these problems become serious when trying to get investors, loans, or when selling your business. Our partners cannot pay us to guarantee favorable reviews of their products or services.
Get a Well-Ordered Chart of Accounts
Your business is cloud-based, so doesn’t it make sense that your accounting software is, too. Besides, cloud-based software integrates with other apps and tools MUCH better than desktop-based software. Although most accounting programs include a sales tax module, these modules only calculate the sales tax due based on information entered by the user.
When you know your numbers, this allows you to see what’s working, capitalize on any early trends, and grow your business. ECommerce business owners need to determine what they need from their accounting software and apps before picking the best ones. You might benefit from third-party apps such as HubDoc, A2X, or Gusto. Our account reconciliation process will help you check all transactions in your store. With accurate financial statements in your hands, you can easily see and match payments, determine extra commissions, know which orders remain unpaid, and more.