E-commerce accounting can be a bit different from traditional brick-and-mortar accounting, and there are a few key areas that bookkeepers need to be aware of. Let’s take a look at some of the ways e-commerce accounting is different:
- Online sales: When you’re running an e-commerce business, you’re selling products and services through digital channels like websites or marketplaces. This means that as a bookkeeper, you’ll need to track and record online sales transactions, which can be a bit different from traditional in-store transactions.
- Inventory management: Many e-commerce businesses maintain inventory levels and manage purchase orders and sales orders through inventory management software. This means that you’ll need to be familiar with these platforms and understand how to track inventory levels and costs.
- Payment processing: With e-commerce, you’ll often use payment processors like PayPal, Stripe, or Square to handle financial transactions. This means that you’ll need to understand how to reconcile these transactions and track income.
- Fulfillment and shipping: E-commerce businesses often outsource fulfillment and shipping to third-party companies. This means that you’ll need to track these expenses and understand how to record them in the financial records.
- Sales tax compliance: Since e-commerce businesses need to comply with sales tax laws in multiple states and jurisdictions, this can be more complex than traditional brick-and-mortar businesses. As a bookkeeper, you’ll need to be familiar with sales tax compliance requirements.
- Digital marketing: E-commerce businesses spend a lot on digital marketing, such as social media ads, Google ads, and affiliate marketing. You’ll need to track and record these expenses.
- Data analysis: E-commerce businesses generate a lot of data, such as customer behavior, sales performance, and inventory turnover. As a bookkeeper, you’ll need to be familiar with data analysis tools and understand how to use the data to make informed decisions.
How KPI Accounting can help with your ecommerce accounting
So, as you can see, e-commerce accounting can have some unique challenges, but with the right knowledge and tools, you can navigate them easily. With the above points in mind, you’ll be able to keep your e-commerce business’s finances in order, and make sure that your business is running at its best.
