Accounting is important in every business. It can help you in making critical business decisions. However, eCommerce accounting is very complex as there are more transactions compared to traditional businesses. Our team can help you monitor every transaction in your business very easily.
What is Accounting ?
Accounting is how your business records, organizes, and understands its financial information.
You can think of accounting as a big machine that you put raw financial information into records of all your business transactions, taxes, projections, etc. That then spits out an easy-to-understand story about the financial state of your business.
Accounting tells you whether you’re making a profit, what your cash flow is, what the current value of your company’s assets and liabilities is, and which parts of your business are actually making money.
- Assets: what you own/possess, including cash, inventory, and accounts payable
- Liability: what you owe to others; i.e., loans or unpaid vendor invoices
- Capital: your company’s equity
- Revenue: income from the sale of goods
- Expense: business costs to run and improve the company
- Account: a detailed record of financial transactions
What is the balance sheet?
A financial statement that accounts for assets, liabilities, and capital for a given period of time; this presents the financial health of your business.
Why bookkeeping & accounting are important for eCommerce?
Whether you’re selling products through Amazon, Flipkart, Snapdeal, or Meesho, you are going to need a good system in place to manage your finances. Here are some of the main benefits of building out solid bookkeeping processes from the get-go.
Importance of Financial Reporting?
Well, there are three main factors:
- It is required by law for tax purposes.
- Financial reporting and analysis give investors, creditors, and other businesses an idea of the financial integrity and creditworthiness of your company.
- Financial reporting software provides crucial information that you can use to make better business decisions — for example, whether you should open a new branch or not.
There are a lot of options available for ecommerce accounting services. Whether you’re deciding to use accounting services for the first time, or you’re looking to make a switch, you have great options available for your ecommerce business.