The term “bookkeeping” refers to the process of recording financial transactions in an organized manner for future reference. It’s important for any business that sells products or services online to keep track of all sales and purchases so that taxes can be paid and money can be tracked.
The eCommerce business requires bookkeeping because it has many different types of transactions, which include sales, purchases, inventory, accounts payable, accounts receivable, payroll, taxes, and other expenses.
Read below why Ecommerce Businesses require Bookkeeping.
The Basics of Accounting
An accounting system is used to track financial transactions and record them in an organized manner. It helps companies keep track of their finances so they can make informed decisions about how to spend money.
-
Types of Transactions
There are three main types of transactions in eCommerce business: sales, purchases, and returns. Sales are when a customer buys something from your store. Purchases are when a company buys goods or services from another company. Returns are when a customer returns a product to your store.
-
Cash Flow Statement
A cash flow statement shows how much money comes into an organization and how much goes out. It also helps managers understand what expenses need to be paid and whether there is enough money coming in to cover those costs.
-
Balance Sheet
A balance sheet is a snapshot of a company’s financial position at one point in time. It includes assets (like inventory), liabilities (like accounts payable), equity (the owner’s share of the business), and total net worth.
A cash flow statement is a report that tracks the movement of cash through the business. It shows how much money came in and went out during a period of time. This type of report is used by management to make decisions about future operations.
-
Profit & Loss Statement
An income statement is a summary of a company’s revenue and expenses. It shows what the company earned or lost during a specified period of time.
The Importance of Bookkeeping in Ecommerce
If you’re running an eCommerce business, you need to make sure that you’re tracking every sale and purchase made by customers. This will help you determine how much tax you owe and where you can save money with your accounting system.
In addition to tracking income and expenses, bookkeepers must also record customer information, such as names, addresses, phone numbers, email addresses, and credit card details. They must also maintain records of inventory levels and other pertinent data.
Bookkeepers must also keep track of inventory levels and other information related to the company’s finances. For example, if a company has a large number of customers who purchase items from them regularly, then there needs to be a system in place to ensure that each customer receives what he or she ordered without having to ask repeatedly. If a company doesn’t have such a system in place, then customers could become frustrated and stop ordering from the company altogether.
-
Types of Books
There are two main types of bookshelf accounting software: desktop and cloud-based. Desktop software is installed on your computer while cloud-based software is hosted online. Both types of software offer similar features, such as inventory management, reporting, and payroll. However, there are some differences between them.
There are two types of books used in bookkeeping: general ledgers and journals. General ledgers record information such as cash receipts, inventory levels, and expenses. Journals are used to record specific details about each transaction. For example, if you sell a product online, you would use a journal to record the date of sale, the price of the item sold, and the name of the customer who purchased the item.
-
Accounting Software
Cloud-based bookkeeping software is ideal for small businesses because it allows you to access your data anywhere at any time. It also offers 24/7 customer support so you never have to worry about technical issues. On the other hand, desktop software is better suited for larger companies with multiple locations. This type of software requires an internet connection and is usually only available during business hours.
If you’re running a small e-commerce business, then you’ll want to use accounting software to help you organize your books. There are many different types of bookkeeping software available, each designed to meet specific needs. Some programs are geared toward businesses that sell physical goods while others are designed specifically for those who sell digital content such as music, videos, and apps.
-
Online Bookkeeping Services
If you own a brick-and-mortar store, you need to keep track of inventory levels, sales figures, and expenses. However, online bookkeepers offer a variety of services that help you manage these tasks. They can provide invoicing, accounting, payroll, and reporting. In addition, they can help you organize your finances by creating budgets and tracking spending.
If you’re looking for a bookkeeper who can help you manage your e-commerce business, look no further than QuickBooks Online. With this software, you’ll be able to create invoices, track inventory, and pay bills from anywhere at any time. You can also use it to generate reports and analyze data.
Still not sure what to do? You can simply ask us to do your ecommerce bookkeeping. Checkout our accounting and bookkeeping services.
