As eCommerce businesses start to grow, differences in how the books are balanced naturally occur. Regardless the business, the principles of accounting remain the same. But for eCommerce businesses, there are extra expenses to balance and for which to account.

To gain a better understand and what this means for the finances, what do eCommerce business owners need to know? Basically, eCommerce accounting factors in the sales income while also tracking other expenses and costs to help understand profits.

When looking to manage finance and accounting functions, keep in mind that bookkeepers and accountants are similar, but fundamentally different and are equally important. In our service deliver model, every client has a team comprised of both that work together every day as a fully outsourced finance and accounting department.

A bookkeeper tracks expenses and invoices, enter transactions, balance the books, and provide financial reports showing the health of the business.

An accountant analyzes the reports and provides insights for improvement and provide ways to increase profitability. Accountants also help determine tax strategy and compliance, complete tax filings, and make certain other financial requirements are met to continue operations.

With brick-and-mortar businesses, many expenses are static and easy to estimate month-to-month. With eCommerce businesses the costs are more variable. Each item sold comes with a shipping cost that changes based on product and destination. If affiliates are a part of the business, commissions may have to be paid. When discounts and coupon codes are included in a transaction, those much be accounted for as well.

Bringing on an outsourced team helps establish clear finances due to the collective experience of industry best practices, resulting in increased cashflow.

The ultimate goal for accounting systems is to save time so business owners can focus on operating and expanding. When good systems are in place, balance sheets, cashflow statements, and metrics are easily analyzed without spending manual hours each month sorting receipts and invoices and executing time-consuming manual entries. As a business owner, that time is better spent making high-level decisions, based on real-time data.

Putting these systems in place can be daunting for new entrepreneurs. It’s never too early, or too late to secure a healthy financial future through efficient accounting systems.