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E-commerce business accounting involves collecting, organizing, analyzing, and reporting business financial information. It involves doing a lot of digital work for your e-commerce business. An e-business account is also required, where all financial records are stored and organized.
It can be easier to run and operate an E-commerce business if specialized tasks such as accounting and bookkeeping are outsourced. If an E-commerce business wants to survive and prosper and succeed then it is very important to check its finances. In other words, it is very important for a business to have complete knowledge of its financial situation and its performance, its profit, its sales and marketing, and its weekly or monthly income.
Problems for Accounting for e-Commerce Business-
1. Erroneous Cost of Goods Sold Computation-
The COGS (Cost of goods sold) is the total cost of selling the product. An important business plan that reflects the impact of inventory results, pricing strategies, taxes, and cash flow management. Misrepresentation in COGS can cause e-commerce sellers to report the wrong calculations of taxable income, which can lead to fines and penalties.
COGS = Beginning inventory + Purchase-ending inventory.
2. Reselling commission & fees-
When your company resells on platforms like eBay and Amazon, you should know that there are charges for listing fees, advertising fees, and promotion as well as order fulfillment in addition to the monthly fee they charge to use the platform. It's easy to keep a check if you do separate accounts for expenses.
3. Evolving Customer Expectations-
Faster, damage-free, and high accuracy for compliance is what customers expect. The post-purchase experience is critical to the customer journey to ensure repeat business.
4. Accounting Challenges-
While accounting includes the organization of your business, billing, and recovery, bookkeeping is more complex and requires e-Commerce businesses to prepare and compile records, and perform financial analysis, tax planning, and forecasting financial risk. Inaccuracies and errors increase if you continue to create your book by hand instead of the e-Commerce software.
5. Inventory Management-
It is a major challenge for businesses, whether you're digital or omni-channel. You must coordinate efforts on the ground with the warehouse moving and sharing space to ensure order fulfillment. Features such as reordering and reporting such as data aging and visibility can clean up the data pipeline.
Solution with us-
1. Stabilize the Business-
Accounting and bookkeeping for e-Commerce companies to maintain financial stability by providing an efficient accounting system.
2. Provide Financial Predictions-
The e-Commerce account provides you with recommendations based on a combination of historical data and current trends that will allow you to predict future profits.
3. Ensure Proper Tax Compliance-
Tax compliance is the key to avoiding penalties when paying your bills. The tax report shows the breakdown of costs under various headings such as procurement, shipping, and warehousing/ storage services based on your income.
4. Recognizing proper income and purchase-
5. Handling day to day Returns as well-
6. Managing Inventory management-
Lekhakar offers a wide range of E-commerce business services designed to increase your revenue, improve your competitiveness, and reduce your business costs, including:
Bookkeeping and Accounting
Relevant research Budget, planning, and vision
Public announcements and financial reports
Lekhakar is a Certified accounting firm, dedicated to serving the people and businesses, established in 2022 by Saurabh Bansal & Ankit Khadria with the zeal to provide best consultancy and competencies. Our Firm incorporate the expertise of a leading regional firm with the convenience, friendliness, and passion of a local provider.