E-Commerce accounting: how we can help!
E-commerce businesses are experiencing exponential growth and that means more transactions than ever before. From July 2020 to July 2021, Australia’s online shopping grew almost 32 per cent, according to Australia Post. It’s a staggering figure – one fuelled by the pandemic – but this upward trend is set to continue.
Those at the helm of an e-commerce business know that the industry is fast paced and unlike any other – and as an e-commerce business grows, finances tend to get more and more complicated.
At Inline Partners, we specialise in accounting services for the e-commerce industry. We can set up systems, provide tailored accounting solutions, ensure you are compliant and help you maintain a healthy cash flow to grow your business. This allows you to stay focused on other areas of the business and achieve your goals.
Why bookkeeping and accounting are particularly important for e-commerce
E-commerce businesses have a high volume of transactions, which means that directors, owners and founders of start-ups, can easily get bogged down in spreadsheets and numbers – and unfortunately most are unequipped with the skills and knowledge to manage them well.
Whether you’re selling products through BigCommerce, Shopify or another platform, you need the right processes in place to manage cash flow and keep track of your finances. After all, the success of any e-commerce business largely depends on having an accurate overview of the business’ performance in real-time.
The first step is good bookkeeping. This will help make accounting for your e-commerce venture smooth and seamless. Regardless of whether you use cash accounting (when the money is received) or accrual (when the transaction takes place), a system such as Xero can help with this. An easy-to-use cloud-based platform, Xero records all invoices and expenses, giving you access to real-time financial data. It also allows you to connect to your bank, accountant and other business apps.
Director at Inline Partners, Lauren Evans, specialises in accounting for e-commerce businesses and has worked with many start-ups and fast growing e-commerce companies. Lauren says implementing industry-specific accounting practices and organisation are an integral to managing any e-commerce venture.
“It is so important to have the right technology stack for your business,” she says. “E-commerce businesses are usually fast-paced and can grow quickly. If you have systems that can support the business as it grows, it makes managing the business much smoother and easier. With the right systems, you will have immediate access to data that can help you make critical business decisions on the go,” she adds.
One of her key recommendations is to utilise software to help store information, sync financial data, streamline tax filing and generate financial reports and forecasts.
These types of platforms can help you monitor your revenue growth (%), gross margin (%), operating profit (%), the number of new and returning customers and average sales per customer, revenue to overhead expenses (%), operating cash flow and your debt to equity ratio.
Do you own or manage an e-commerce business and need customised accounting help? You can book a free consultation with us.