Your Ultimate Guide to eCommerce Accounting in 7 Simple Steps! 

eCommerce Accounting is necessary for every type of business. Your success depends on your ability to manage the balance between your incoming and outgoing funds. The accounting process could seem difficult and frightening, but it becomes clear and simple to understand with the correct information and resources.

Systematizing the eCommerce accounting process to keep track of transactions is essential because your e-commerce store receives daily orders. These purchases are subject to cancellation or refund requests at any time. This needs planning.

These hints can help you get started if you own an online store and want to simplify your eCommerce accounting procedure:

eCommerce Accounting
eCommerce

eCommerce Accounting: Create A Second Company Bank Account.

Your business expenses will be kept separate from your expenses if you have a separate bank account for your business. Even though sole owners are exempt from the requirement, it is nevertheless advised. It is required for partnerships and LLCs. You can arrange your taxes and handle your finances with this. The different accounts will simplify bookkeeping as your company expands.

eCommerce Accounting: Adapt To Payment Gateways

It is crucial to pick the correct payment gateway, such as Mastercard, Digital wallets, Visa, given the increasing expansion of e-commerce platforms. Each gateway levies a different transaction commission. It’s critical to comprehend these transaction fees and how they impact your profit margin. Find the best payment gateway by doing some research and looking for one with a high success rate and a low transaction rate. If your user enters their credit card information and the transaction fails, they can leave and never come back.

eCommerce Accounting: Sort Transactions Into Categories.

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Every transaction ought to have its ledger record. This ensures that every spending is recorded.

Every transaction requires placing an online purchase. Ordinarily, there will be two types of orders: one directed at the suppliers from whom you buy the raw materials and the other at the client who buys a product from you.

Vendor payments should be recorded as expenses, and funds debited to the account should be recorded as income. When several transactions occur, having software that handles this data will be useful. To prevent inconsistencies, good software should also enable uploading scanned copies of receipts.

Think about refunds and chargebacks

Refunds and returns are inescapable aspects of the online retail industry. When a refund is provided, it appears in the eCommerce accounting as though there was no sale. While the refund will be deducted from your revenue under Returns, the product will be added to your inventory. You will be responsible for paying the processing cost, representing your company’s loss.

Customers that assert they did not use their credit card for a certain transaction file chargebacks. The company must pay back the credit card company. The processing fee for these transactions is deducted from your revenue and added back to chargebacks or operational expenses.

It’s important to keep all these exorbitant charges in mind.

eCommerce Accounting: Examine Bank Statements.

Spending money that you don’t have is bad for business. Your available cash can be managed and anticipated with the use of a monthly bank reconciliation, which involves comparing financial records with the books you’re keeping.

You can spot minor differences by comparing the amount stated in the records to the cash in an account.

eCommerce Accounting: Get Ready For Tax Obligations.

Every business that sells taxable goods must pay sales tax in the states where they have a sizable presence. When we purchase goods from online retailers like Amazon and eBay, these taxes are hidden from view. The vendor will handle all tax administration for the full online store. This is a factor in the laborious nature of monitoring sales tax compliance.

The amount will be deducted from your cash flow if tax was not correctly collected from your clients at the time of sale. Proper account administration is needed to reduce tax fines and prevent difficulties.

Depending on the business’s legal structure, taxes vary. It will be a personal tax owed by the lone proprietor. In India, the usual tax regime that is followed in eCommerce platforms is that of GST. 

eCommerce Accounting: Take Care of Merchant Fees.

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A merchant fee is charged when using an eCommerce platform to set up an online store. Every online sale generates a portion of its profit. Since the merchant has already deducted the money before depositing to your profile, the amount shown on your profile will be the gross income rather than the net revenue.

eCommerce Accounting: Pay For Shipping.

Clients adore free shipping. But since you’re a business owner, you have to pay for it out of your own money. If free shipping is provided, the product price should reflect the cost of this operation. Ideal for most online vendors is a small shipping fee.

Increase the processing time to lessen the strain on the business if you decide to offer free shipping. Some shipping companies provide discounted shipping rates for extended transit times. Setting the proper delivery price is crucial for the overall success of the organisation.

eCommerce Accounting Made Easy With GoPlinto! 

The simplest platform to launch and grow your online business is GoPlinto. It offers custom domains, plug-in integration, features, and anything else you require to operate a profitable online store.

With GoPlinto, getting started is simple. Register for an account and choose the package that best meets your company’s needs. Then, in less than 30 seconds, add your products, process orders, and begin selling online.

GoPlinto automates every step needed for a business to launch an online presence, including setting up its store and payment gateway. Each stage is easy to complete and doesn’t include any laborious procedures. Your online store may be easily launched using GoPlinto.

In addition, GoPlinto provides the following tools to help you manage your online store:

  • Accept more than 100 other payment options besides Visa, MasterCard, UPI, and wallets.
  • Affordable Modules for Marketing, CRM, Reports, and More.
  • Pick from more than 100 website templates.
  • Share, Connect, & Grow a Loyal Customer Base.
  • Create Your Mobile e-commerce App

Learn more about eCommerce accounting by signing up now!

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