If you ask market researchers, they will tell you unequivocally that eCommerce is the future of business. The majority of U.S. consumers now go online to shop for the products and services that they need. Secure payment methods, an abundance of delivery companies, and the availability of smart mobile devices have all played a part in the popularity of eCommerce.
Online transactions are automatically recorded in a digital ledger that is connected to an online shop’s order processing system. Digital stores that perform dozens or even hundreds of transactions each day depend on eCommerce accounting software. However, many online business owners do not know how to get the best productivity and efficiency out of their accounting platform.
Here we share 8 tips that will help you get the most out of your accounting platform.
Tip #1) Research the Software Market
Each business is different and has varying operational needs. There is no one-size fits all software in the market. While one program may offer special benefits to one business, it may not be the best fit for a different organization.
One eCommerce accounting software may be designed for small firms while another one may be created with larger organizations in mind. Our advice is to weigh the pros and cons of each platform before you commit to buy and implementing it in your organization.
Tip #2) Integrate Your E-Commerce Accounting Software with Your Website
This is a must if your daily online transaction volume is more than one per day. The software must be capable of directly importing all the relevant information from a transaction into the relevant ledger and data fields.
Using this type of accounting software will eliminate the need to input data entries manually. It will reduce errors, speed up the recording process and give you a lot of peace of mind.
Tip #3) Monitor All Expenses and Income
The main purpose of using eCommerce software is to track your business income and expenses. The accounting software will allow you to get deeper insights about your revenue generating operations and major clients. The software will also reveal the areas where you are spending most of your funds.
Once you understand the revenue and expense patterns better, you will be able to take steps to improve your profits and productivity.
Tip #4) Track Your Inventory
If you run a product-based business, the eCommerce accounting software can make your life much easier by doing your inventory counts for you. The automated eCommerce accounting software makes deductions to your inventory every time a customer makes a purchase and adds inventory when you electronically sign a shipment receipt.
Improved inventory tracking will lower your carrying cost and wastage. Your business liquidity will also improve as funds won’t be tied up to stock for long periods of time.
Tip #5) Reconcile Your Accounts
It can be tempting to leave the automated accounting software on its own. However, you should remember that your accounting software is just a tool and it is still your job to make sure that your books and ledgers match.
We suggest reconciling your accounting software with your bank account regularly, at least once a week. This will ensure that your accounts do not become too mismatched with your bank account.
Tip #6) Make Sure It Is Secure
When it comes to eCommerce, accounting software is likely to be accessible online. Accounting software is integrated with eCommerce order system which is linked and can make changes to the database. If a customer can cause your ordering system to make entries in your accounting database, then a cyber attacker can also access it and make changes.
This is why it is important to have advanced cybersecurity for your accounting software and keep its data secure.
Tip #7) Track Order Delivery
For online eCommerce businesses, a sale isn’t complete until you have shipped the product to the customer’s delivery address. If the product get’s damaged or lost on the way and you are unable to fulfill the order, the customer may cancel the purchase and you will have to reverse the transaction.
Your accounting software must be capable of differentiating between a product that has been ordered and is in transit and a product that has been delivered to the customer and sale has been finalized.
Tip #8) Calculate Your Taxes
You will be using your accounting software for two main reasons. The first is to record the transactions for your own use so that you can make improvements to your business operations. The second main reason f0r creating an accounting record is to file tax returns to the government. Your accounting software should make it easy to calculate your taxable income and total tax to be submitted to the IRS with the return.
If you follow these 8 simple tips, you will see a significant improvement in your business productivity and profits. They will also give you ease of mind that your business is headed in the right direction.