7 HELPFUL BOOKKEEPING TIPS TO RUN A SUCCESSFUL E-COMMERCE BUSINESS
The number of people using the internet to purchase goods and services have risen over the past decades. Experts have predicted that by 2021 this industry will amount to about $35.2 billion. The e-commerce industry is expected to continue to grow and reach Australia. Because of this, many up-and-coming business owners in Brisbane are enticed to jump the bandwagon and try to have a share at this multibillion-dollar industry.
If you are intending to build an online shop or an e-commerce website, or if you already own one; then it is crucial for you to get the services of a well-trained bookkeeper to help maintain your business and help it grow further.
As with all types of businesses, it is also important for e-commerce entrepreneurs to know the fundamentals of accounting and bookkeeping to always have an insight of all the financial reports, sales forecasts, tax returns and make smart decisions.
In the event that you haven’t yet found the right bookkeeping firm in Brisbane, here are some helpful tips that will help you run a thriving ecommerce business.
- RECORD-KEEPING USING ACCOUNTING SOFTWARE
Accounting software is widely used these days to carry out record-keeping tasks to monitor all of the transactions that has taken place daily. One great feature about accounting software is that it can be tailored to fit the specific needs of each specific business industry, including e-commerce businesses. In addition, this software can also minimise the time spent and reduce the errors that often comes with manual recordkeeping.
Nevertheless, it is not enough to get an accounting software that creates business reports. It is also important to look for a software that provides a broad range of features such as automated invoicing, payroll management, and provides synchronised updates.
You should also look for a software that can be incorporated to your online shop and offers support for when you prepare your BAS and tax files. This will help you employ the time you saved as a result of this automation in operating your business without all the tension and stress.
- KEEPING TRACK OF THE CASHFLOW
Calculating the amount of money, a business is making is probably one of the most fundamental techniques needed to evaluate the financial health of an organisation. if the money that’s coming into your company is greater than the expenses of your business, then you can rest assure that you are doing a terrific job.
But achieving a milestone is not that easy. A skilled bookkeeper in Brisbane can find ways to boost the flow of cash by carrying out cashflow forecasting. This will help reduce all the excess expenses of your business and make sure that you are making payments on time so that you can avoid the penalties usually imposed by banks and money lenders for businesses who pays late.
Another great way to enhance the flow of cash is to ensure that the invoices are sent out as soon as the customer receives the product or service and check on a daily basis to make sure that cash is coming in from these invoices.
- PERFORMING BREAK-EVEN ANALYSIS
It is vital for an ecommerce business to know the time when the income of their organisation becomes the same as their expenses. This is because, whatever cash that comes in after this point can be construed as the business’ profit.
There is a need for an entrepreneur to get a better understand of how much time it would take to achieve their business goals, and what better way is there that to do break-even analysis? In this regard, it will be best to get the services of a bookkeeper so that you can get better assistance on how to properly price your products.
Break-even analysis is vital for establishing monthly objectives and predicting the future direction of the entrepreneur’s investments. It is also a valuable tool for envisioning the future if you are planning to expand your business in Brisbane. You can get valuable advice on how to reduce variable expenses in order for you to begin making profits immediately.
- KEEPING INVENTORY VOLUMES
To keep the stocks at the most perfect volume, every ecommerce entrepreneur will need the help of an experienced bookkeeper. It is imperative for an online shop to maintain the most ideal inventory in their warehouse in Brisbane to ensure that they always fulfil the required orders. This also ensures that the business doesn’t lose out on possible sales due to shortage of raw materials and other items needed for manufacturing and packaging the products.
It is also important to make sure that you do not overstock products and manufacturing materials for the entire year, since it is usually affected by the fluctuations of prices in the market. If the prices of raw materials increase, it would mean that your business will make profit.
Nevertheless, if it decreases, it will mean a huge loss in profit for your business. If you do not overstock, you can make sure that you are always in the exact position to make the right amount of profit, without the risk of losing money.
- SUPERFLUOUS EXPENSES REDUCTION
When it comes down to reducing unnecessary expenses, an ecommerce business needs to get the help of a bookkeeper, since these can have huge effects on the company’s profit and loss statements.
Just like other businesses, online shops in Brisbane have their own fixed expenses. These fixed costs would include the ecommerce business’ domain name, hosting, content management system’s maintenance, software updates, office rental, warehouse rental, utilities, employees’ salaries and wages, product inclusions, etc.
But aside from these fixed expenses, ecommerce businesses in Brisbane also have variable expenditures, which depend on the sales’ percentage. These include advertising and marketing, packaging materials, raw products and more. Having a skilled bookkeeper by your side can help reduce these variable expenses. For example, a bookkeeper can help you find an warehouse or office with lower lease, or find a raw material supplier that offers lower prices. They can even help you find a moneylender that offers lower loan interest rate.
- MONITORING SALES
No matter what type of business in Brisbane you have, sales is the most vital component that helps make sure that it thrives. And no ecommerce business in Brisbane can survive if its products are not selling. Thus, it is incredibly important to keep track of the quantity of goods that your business sold at any period since it will help them know if the business was able to reach its monthly target or not.
On the other hand, monthly sales targets depend on being able to reach the break-even point of the ecommerce business. Therefore, if your company set a monthly target sale of about 500 goods, but by the end of the first week, you were only able to sell about 100 products, then it means that you need to create an aggressive advertising and marketing strategy to help you achieve the goal.
Nevertheless, it is also vital for you to ensure that the cost of your ad does not go above the income from your sales. A qualified bookkeeper can easily help you monitor these sales. Furthermore, one great tool you can use to get daily error-free data for ecommerce website is Google Analytics.
- INCOME TAX AND GOODS & SERVICES TAX
Every ecommerce business in Brisbane is required to register for GST or Goods and Services Tax. Generally, 10% is added by the business to the sales price of each of their products. The GST that businesses charged for the purchases you made can be claimed by you.
An experienced bookkeeper in Brisbane can guide you if you want to claim Goods and Services Tax, and if you want to add it to your products, since it cannot be applied to all goods that are for sale and bought. For example, exports are not obligated to include GST.
E-commerce businesses in Brisbane will have to pay Goods and Services Tax collected to the Australian Taxation Office every quarter of the year, during tax return. This is known as BAS or Business Activity Statement. Its amount will depend on the tax that has been collected through sales minus the GST that the business paid on purchases during a certain period.
On the other hand, income or revenue tax is calculated as the taxable revenue multiplied by the applicable tax rate to the company for the fiscal year. Your bookkeeper can be valuable when computing and guiding in creating precise and error-free reports
E-commerce businesses grow at rapid rate. While this is a good sign, it also heightens the risk of committing errors in terms of tax, decisions, etc. As such, you need to have a dependable bookkeeping company in Brisbane. Nevertheless, as mentioned previously, if you haven’t found your bookkeeper yet, it will be a good idea to bear the tips above in min so that you can make sure that your company thrives faster and inexpensively.
For expert and affordable Bookkeeping Brisbane services and Payroll Brisbane services, contact Skyway Bookkeeping & BAS on 0404 461 098.