All You Need to Know About eCommerce Bookkeeping
Opening an e-commerce store is an exciting venture for any entrepreneur. With an online shop, your products are available day and night, year-round, to an international array of customers. The World Wide Web enables you to cast a wide net for a niche audience, drop-ship orders, and do it all while maintaining a small physical footprint.
Purchasing a domain name and hosting, setting up the website and store itself are all very important steps to take, but without sound financial planning, your store won’t gain much traction.
Once your new store has been set up and goes live on the internet, you will need to ensure that your stock levels are sufficient and that expenses are tracked, among other concerns. Quickbooks offers integrable solutions to help with all of these things.
What Makes Retail Bookkeeping Unique?
At a glance, the process of e-commerce bookkeeping and accounting is very similar to the way it’s done in other industries. If you understand the basics of bookkeeping, or have accounting experience from a previous career, you’re well on your way to understanding this subject. Even if your background is lacking in such experience, the principles of retail bookkeeping are fairly simple.
The Basics of E-commerce Bookkeeping
There are several necessary steps you must take when you’re setting up a bookkeeping workflow for an e-commerce store. A simplified version of this process might look something like this:
- Determine how you want to track and cost your inventory
- Download retail accounting software
- Create templates for sales orders, invoices, and receipts
- Start tracking your inventory
- Create a balance sheet, income statement, and cash flow statement for your first month of business
Before you start doing the math to figure out your revenue and costs, it’s a good idea to make sure you understand the basics. The best place to start is with financial statements.