Do you own a flourishing online business? It’s one thing to prepare your eCommerce store to make sales, but preparing to make up your business accounts is an often overlooked part of the process!
If you fail to run your accounting correctly, not only will you be unsure how profitable your business is, but you could also run into issues when it comes to declaring your income and paying your tax.
Here are some best accounting practices to keep in mind:
- Consider hiring a professional accountant. While you might be able to keep track of things yourself, there is no substitute for the expertise of an accountant. They will be able to accurately monitor your finances and prepare all the information you need to file your taxes.
- Alternatively, use accounting software. If you don’t want to hire an accountant, you could always do it yourself with accounting software such as QuickBooks or FreshBooks. Be sure that you understand how to use the software, and don’t feel like you need to pick the most expensive option! Sometimes, the cheaper ones can give you all the information you need.
- Review your finances at least once per month. Staying on top of your cash flow, revenue and profits can prevent you from having any nasty surprises. Know which areas of your business are the most profitable, and which ones are costing you too much money.
- Create and stick to a budget. You can’t grow your business effectively without a budget. Working without a budget means you’ll be guessing when it comes to how much you can spend, and this can easily leave you exposed to overspending. Knowing how much money you have to work with can help you optimize the growth of your eCommerce business.
- Have a separate business bank account. It’s nearly impossible to keep track of your business finances when your cash is mixed with your personal funds. Having a business account means you can clearly track the incomings and outgoings over time.
- Be aware of tax deadlines. It’s easy to get lost in the fun (and stress!) of managing your business. However, you must be sure to file your tax returns in time, and make your subsequent payments too.
Written by Jack Vale in partnership with Marv Golden Pilot Supplies