Have you heard about Ecommerce bookkeeping? Before you learn about it, let us talk about the bookkeeping service in accounting first. It will facilitate your idea about e-commerce bookkeeping.
Accounting and bookkeeping are the same but has different prospects. The term “bookkeeping” is an old acquaintance of entrepreneurs and accounting professionals. And it is because auditing is a requirement by the legal entities. However, what many do not know is that bookkeeping also generates several benefits.
Accounting bookkeeping is an asset control technique based on the chronological record of all accounting facts that occur in an organization. The objective behind this technique is to allow a company to control its assets in the best possible way. In practice, each operation carried out by your company generates an equity impact that must be recorded – be it a purchase, sale, loan or customer receipt. And it is precisely based on the records of these entries that the entire asset management is carried out.
And, when it comes to e-commerce, bookkeeping certainly has numerous benefits and importance. Do you want to understand better what e-commerce bookkeeping is and its impacts on your organization?
What is bookkeeping for e-commerce?
From virtual inventory management to calculation of taxes of online sales and shipping logistics, considerations and challenges are the part of running e-commerce successfully. It is why the bookkeeping for Ecommerce companies must be updated frequently. You may choose to do your bookkeeping on your own with the help of an online accounting CRM, or outsource the financial and accounting services, or hire a professional bookkeeper, what matter is that the solution must be equipped to solve intricacies of e-commerce bookkeeping, including:
- Third-Party Payment Processors,
- Proper Inventory Management,
- Alternative Sales and Merchant Fees,
- Multiple Currencies and Foreign Sales,
- Sales Tax and Shipping
Importance and benefits of –commerce bookkeeping
The first step in understanding the benefits of e-commerce bookkeeping is to know that it goes beyond a mandatory document. Its function is to be a company diary, facilitating the organization and management of the financial and even structural part. See what they are:
Accounting reports – E-commerce bookkeeping is the basis for issuing the main accounting reports. Balance sheets, income statement and cash flow are great examples of accounting reports that depend on the entries of all transactions.
Business management – E-commerce companies that have bookkeeping done correctly are free from surprises about the company’s real financial and equity situation. It is an excellent source of information to assist in decision making and allow the company to achieve its plans in the long term.
Beside, bookkeeping data can be used in a variety of ways to generate even more relevant information. It is possible to analyze the level of indebtedness, monitor the evolution of the results achieved, carry out tax planning, define performance indicators, structure a cash flow, etc.
Assistance in judicial cases – E-commerce bookkeeping information can also be used in court cases as evidence in a court of facts that depend on accounting expertise. In other words, your company can benefit from the information recorded in various legal situations – such as labour claims, judicial recovery, fraud or corporate disputes.
Primary steps of e-commerce bookkeeping
Bookkeeping is a mandatory and very demanding document. The first requirement is that it must be developed by an accounting professional, after which there are several other standards to follow.
External formalities – It is what is related to the presentation and appearance of the bookkeeping. For example, bookbinding typographically numbered sheets, and the opening statement is for closing, company identification, type of book, number of pages, etc.
Book diary – All transactions involving the company’s equity are recorded in the daily book. It is one of the leading accounting books and must be notarized. Its creation is mandatory for all companies. The facts must be recorded in full in chronological order. In the case of a digital daily book, there is no need for printing, but it is mandatory to keep an authenticated backup with the company.
Ledger – After the daily book is built, the company has the option of posting all individual accounting records in the ledger. In this book, each operation is unfolded and launched individually. The main reason for starting the ledger is to have the individual accounts totalled.
E-commerce won a growing market space. So much so that several sites already have impressive revenues. The success of virtual stores has also revolutionized entrepreneurship. More and more people realize the dream of having their own business through e-commerce. It is because the model is accessible, practical and has many advantages.
In this context, it is highly recommended to keep an eye on the main aspects of e-commerce bookkeeping. Besides, there is a multitude of standards and specifications for the development of e-commerce bookkeeping. And, it cannot be done in any way or by the wrong professionals.