If you have employees, you need to keep track of payroll processing and payroll taxes. However, if you want to take a hands-off approach, you can hire ecommerce bookkeeping an accountant or bookkeeper to do it for you. With the right platform integrations, you can easily track your sales, returns, and other figures.
As you record how much of your inventory has been sold, you must calculate the price each item sold for to keep proper count. For example, you need to note that you sold “x” number of sweatshirts at “y” price per sweatshirt. We have several systems in place to protect our client’s data, including using only secure channels of communication and NDAs. A business owner can focus on expanding the business and closing deals. Bookkeepers will reduce their work by managing their finances. Having access to accurate financial information is even more important.
Best Accounting Software Picks for Ecommerce Companies
And always remember to record your cost of goods sold when you sell each piece of inventory. Doing so ensures that your income statement is right on point. Using a break even point calculator can help you determine if your sales will be enough to cover your costs and to what degree. With https://www.bookstime.com/ this calculator, you’ll be able to figure out how many products you must sell to break even. You’ll also know how many products you must sell to hit your target gross profit. No matter how you organize your chart of accounts, you want to make sure it’s a real-time updated chart.
Fortunately, platforms like FreshBooks offer impressive bookkeeping services. FreshBooks will help you start and run your ecommerce business. You can keep your cash flow statements and balance sheets all in one place. One of the most essential aspects of bookkeeping when it comes to retail e-commerce businesses is inventory. E-commerce bookkeeping might sound easy, but since there are several modes of payment and sales come in from a number of different sources, there’s a lot of complexity involved.
If your COGS numbers are inaccurate, it will affect your taxable income and your profit margin. Inaccurate profit margins negatively impact your ability to effectively run your business. They also impact your future forecasting as you won’t have an accurate picture of what really sold in December. Over time, as your business grows, not having accurate timing of transactions (sales, expenses, liabilities, etc.) will become very significant.