It is not enough to believe that you receive enough income if most of it is due to payment of suppliers and provision of services, among others. Keeping the accounting of your online store allows you to have a real analysis of the economic situation of your company and if it is increasing or decreasing. Aaron Rodriguez uses his knowledge of business optimization to explain how eCommerce businesses can better manage their accounts.
There are also other factors to ensure the success of an online store, such as maintaining the legality of your business. The IRS ensures that all small and medium-sized businesses (SMEs) have their accounts assessed. This is achieved through the different types of formats they have to be up to date with the legal requirements.
To know the monetary value of your business. If you subsequently want to sell your business, the accounting of your business allows you to know the monetary value of your online store and how much you could offer it. An online store depends on two fundamental factors to guarantee success, and these are accounting and marketing strategies.
“Accounting is responsible for measuring and evaluating the performance of the marketing strategies employed in the online store,” Rodriguez explains. “If there is an inconsistency in the strategies employed in the business model there can be a decrease in revenue and consequently the bankruptcy of the company.”
For this reason, it is important to develop strategies based on a specific business model. It is well known that one of the characteristics that increase the probability of a sale is to offer different payment methods to the customer so that he can purchase your product or service.
No matter how many payment wallets you add, attach the same bank account for all of them. This way, it will be much faster and easier to calculate the income and expenses of your online store. It is also important that this bank account bears the name of the company or online store, and that it handles income and expenses only and exclusively belonging to the online store.
“Invoices and tickets will prove the movement of your online store. An invoice includes fiscal data of the sender as well as the receiver. A ticket can only collect data from its sender. The most advisable thing to do is to empty this information in the accounting books so as not to have to run with last-minute corrections. The IRS does not forgive delays,” Rodriguez points out.
In the accounting books are attached all the movements that occur within the company on a daily, quarterly and annual basis; when it is daily, a daily record is kept of what happens in the company. Although it is not currently a legal requirement, only events that do not exceed three months can be written.
Then there is the quarterly or annual. In these, you write about the company and how it has evolved. Normally, balance sheets about the company's equity situation, income and expenses are described here.
These reports help considerably to evaluate the status of your business. For a report to have the effectiveness that you are looking to measure in your online store, it is best to make them on a quarterly basis.
If at the moment you can't afford an accountant, let alone an accounting program, the best thing to do is to do the accounting yourself in an Excel document. Rodriguez believes that this tool is of great use for many of those entrepreneurs who may be coming into the business world.
Then there are the profit and loss reports. These reports help considerably in assessing the status of your business. What you've lost outweighs what you've earned? Are you overspending on vendor payments? Is your business being profitable? For a report to have the effectiveness you are looking to measure in your online store, it is best to do them on a quarterly basis.
If you plan to import goods from other countries to sell in your online store you may be subject to taxes and duties. Therefore, it is very convenient that you research and learn about these taxes so that you know the rules from the beginning. If you are going to import goods, you can make use of a tax calculator to help you estimate your business fees and plan your costs.
In eCommerce, sales tax regulations can be confusing due to location issues," Rodriguez explains. In online sales, you regularly sell to customers who may be in another state, province, or country. Selling to international customers can be even easier than domestic sales because you are not required to collect sales tax when selling to customers in other countries.
About Aaron Rodriguez
Aaron Rodriguez is an expert eCommerce consultant in Latin America. He helps businesses throughout the region optimize all of their eCommerce operations to increase sales and retain customers, and also has extensive experience in the development of strategic and external alliances to promote departmental and organizational objectives. He has traveled extensively throughout Latin America to assist a number of companies and when he's not traveling, he dedicates all of his available time to his wife and children.
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