E-commerce is a great enabler for businesses of all shapes and sizes the world over, a real and successful engine for economic growth. Of course all of the e-commerce transactions need to be accounted for, which means e-commerce bookkeeping is a necessary skill in the 21st century.
Here are some examples of e-commerce that we see every day:
These are just some examples of e-commerce activities and transactions. Not only are there many more but new channels and platforms are appearing all the time.
And all these businesses have to get their heads around e-commerce bookkeeping.
This is the same for all businesses and organisations, whether they’re online or offline – you start by mapping your transactions.
Let’s say that Blue Dot Consulting (BDC) has an e-commerce bookkeeping webinar and let’s map what happens.
Points to note / questions to ask:
These are just the points that arise from my simple example – in your business you may have several more issues to think about, such as categorising the different products or services you’re selling.
The place to go is where the transactional data is being captured.
This could be your website, Shopify, Stripe, PayPal or somewhere else entirely depending on your e-commerce set-up.
But the data is available somewhere, often in a “Reports” section, and you need to download it.
Then you need to understand it and figure out how to use the data for your bookkeeping.
Once you understand the transactional data it’s pretty simple to figure out the correct bookkeeping, making sure you get the VAT / sales tax element correct for the different customer groups, locations, products and services you’re selling.
Start the bookkeeping manually and make sure your accounting software is configured to produce reports that accurately measure your business activities.
You can use the reports to check your bookkeeping and to share across your business so everyone who needs to can track sales performance.
There are many apps that connect e-commerce platforms to accounting software. And when they’re working successfully they will save a huge amount of time and improve the accuracy of your bookkeeping.
They’re also essential for when your business scales up. As your business grows you can’t afford for the e-commerce bookkeeping to be left behind.
But for every app there is an error waiting to happen if you’re not careful. And most cloud accounting software doesn’t allow you to take and restore a back-up so be very careful when you start to import large volumes of transactions.
That said, get the apps to do the heavy lifting once you know they will do it correctly.
E-commerce is here to stay, it’s constantly evolving and e-commerce bookkeeping needs to keep pace.
It’s not as simple as it can be made to look in the swish and fancy videos the software people point you towards. But once you get the building blocks in place and have a thorough understanding of your transaction data then you can progress to a joined-up world in which data flows from one app to another, morphing into useful financial information along the way.
We have a great deal of experience working with e-commerce businesses like yours, making sense of the sales transactions, accounting for them and generating useful financial information.
We can help you!
Let’s have a free-of-charge chat about your business – call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk
Michael
Related links:
This is bookkeeping in the 21st century
Spreadsheets in accounting – use fewer of them but learn how to build them better
Chartered Accountants – Bedford House, Fulham Green, London, SW6 3JW
We don’t believe in forms, we believe in talking to people, finding out your needs and tailor-making a solution just for you.
Give us a ring on 020 7125 0270 or email us at info@bluedotconsulting.co.uk
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