E-Commerce Accounting: How to Set Up Your Chart of Accounts

Because we are 100% remote, we understand how to serve our ecommerce clients. We speak to our clients’ unique challenges by providing direct, timely answers to questions and concerns. We do this by via the best technology ecommerce bookkeeping to help improve their experience. The table below shows some of the areas of accounting specific to ecommerce, along with why this is different from traditional accounting and some solutions you may want to consider.

Finally, you want to be marketing your eCommerce accounting services in all the right places. Regularly update your Twitter account, join eCommerce groups on Facebook, perfect your Google Ad Words campaign and network at all the must-attend eCommerce events and conferences of 2019. If anyone knows the importance of online reviews, it’s eCommerce sellers. Online reviews influence 95% of consumers – making them vital for the success of your eCommerce growth strategy. Pick a specific review site to focus your attention on, and ask previous and current clients to get reviewing.

Top Small Business Bookkeeping Tools

Shipping fees are one of the most common eCommerce accounting struggles. The price that customers pay you for shipping may not be the same as the price that freight and delivery services charge you. Accounting and inventory management systems should work together to help your supply chain run smoothly. Some eCommerce platforms have inventory management features built-in, so they will automatically track inventory for you.

A clear return refund and exchange policy will encourage online shoppers to purchase. If you have many repeat customers, your return rate will probably be lower than average. The items you sell and your customers will determine your return rate. Generally speaking, you should understand and track your gross https://www.bookstime.com/articles/truckers-bookkeeping-services margins, plan and strategize to optimize your margins and focus on minimizing expenses to maximize margins. This is a good example of how to use your daily bookkeeping habit to benefit and inform your cash flow forecasts. If you’re going to invest your time bookkeeping, you want to make sure you do it well.

What to Look for in an E-Commerce Bookkeeping Solution

In this article, we’ll run you through the basics of a chart of accounts, as well as the unique considerations you need to make when setting up a chart of accounts for an e-commerce business. Plus, we’ll explain how using an accounting integration can make the process of setting up accounts in your accounting software much easier. This will help you manage payroll and avoid running out of money before the end of the month.

• It’s vital to know which important financial statements you need to create and track.
• Your ecommerce business can have towering sales, but if your marketing and operation costs are exceeding them, you are getting nowhere fast.
• For companies with more complex sales tax filings, we recommend a 3rd party software such as TaxJar or Taxify, which directly integrates into Xero software.
• If you think of it in a Shopify (or online store) context, bookkeeping is like uploading all your products, pricing, images and product descriptions.
• Businesses that document their processes grow faster and make more profit.