Maintaining accounts for a business is one of the most difficult tasks while starting up. As your enterprise starts to grow, a seemingly easy debit-credit sheet suddenly starts sprouting branches. There are suppliers, logistics providers, taxes, customers, refunds and the list goes on – all of which need to be accounted for.
Good accounting makes your job as an entrepreneur extremely easy – it keeps you updated with the real time scenario of your business, helps you forecast financial estimates and aids you in analysing and strategizing key business decisions. Granted, that someone who may or may not for sure know how much money they are carrying in their wallet at a given point in time is writing this article, but rest assured, it is good advice.
So lets jump in and get to a few wise tips on how to maintain accounts for your e-commerce business, the right way.
How to Keep Your Book-keeping and Accounting in Order
Strict Separation of Church and State
What we mean is, don’t mix up your personal expenses and business expenses. This seems like a trivial piece of advice but you would be surprised how many business owners fall prey to this condition. Sure, you can be honest and pay your business back for your personal expenditure, but these things tend to get very complicated very fast. And then during the yearly audit, you have to sit with your accountant trying to manually separate all the expenses, but by that time its like trying to untangle a giant ball of wool. Not to mention that you have the tax department breathing down your neck while you are doing so. Hence, strict separation.
Save Your Invoices
Invoices are the sole proof of a monetary transaction, and if the transaction reflects in your company account, you should be able to back it up with some paper. Of course, you don’t need to physically file all your invoices creating a clutter that reminds you of a post office in the 90s. Most e-commerce businesses are transitioning to e-invoices, which you can store on the cloud.
A multi-channel order management system like Browntape helps you efficiently print and store invoices that you would send out to your customers. As for the physical invoices that you would receive, we recommend Receipts by Wave, an app that lets you click pictures of your bills, invoices and receipts and digitizes them and imports them directly to your account.
Set Aside Money for Paying Taxes
Set aside the money for paying taxes and make a record of it. By doing this you make sure that you don’t need to dip into cash set aside for other important aspects of business like payroll or supplier budget to rescue you from defaulting on your taxes because that is a painful process to get through.
Plan Major Expenses
Be it upgrading the computer system, creating a new website or acquisitioning a new warehouse, financial planning is the key. Start analysing your accounts now, to see the trends and extrapolate for long-term goals. Will you be able to lease out a physical store in three years? Or invest in creating an app in one? Scheming and saving is the only way you will be able to manage these things in the long run.
A great example of this is the multi-channel order management system, or even the Receipts by Wave app, both mentioned above. But you can go further than that and invest in an accounting system. Usually, physical or even digital storage of documents make them susceptible to various hazards. Try to find a service that lets you store your accounts on the cloud. Here is a list of softwares designed specifically for small and medium sized businesses that may help you out.
For more information or any queries, don’t hesitate to get in touch with Browntape. We are India’s leading multi-channel order management and solutions providers and we’re always happy to help!