With a few basic practices and help from an outsourced accounting firm, you can simplify your eCommerce accounting and tax filing, and make the whole process a lot less stressful:
Use apps that integrate
Nowadays, there are a variety of apps that can integrate your eCommerce store with accounting platforms like QuickBooks and Xero, giving you the opportunity to easily generate and catalog your invoices, keep a running ledger of bank deposits and payouts, and see your inventory and past purchases. Then, when you begin outsourcing your accounting requirements, their experts will be able to easily access all of your business information and reports, from one secure place.
Ensure your records are accurate and up-to-date
Make sure you always keep a track of important details such as the dates of transactions and details of each item, while storing all receipts safely and where you can easily access them should you need them. Some expenses can be written off during tax time – even services from outsourced accountants – but only if you have access to all the right information. While keeping old receipts may not seem worth it, you can be audited for up to six years, so it does make sense to hang onto them and store them safely away.
Regularly reconcile your accounts
Reconciling your accounts means taking both your accounting and bank records, and making sure they tally. Doing so can help identify any transactional errors, duplicate charges and fraudulent changes. Fortunately, the majority of accounting software connects with your bank account automatically to download and sync transactions, giving you the reassurance that all debits and credits have been correctly processed.
Transactions should be categorized as soon as they come in, and at the end of the month, you can simply run a reconciliation report.
Keep your tax settings up-to-date
With most eCommerce stores, tax settings are configured automatically according to the countries that you operate in, and ship to, but as your business grows, it’s important to keep a close eye on your tax settings to make sure that you’re compliant with all tax laws. Outsourcing your accounting will help ensure that you’re always compliant, and always aware of any tax exemptions that might be applicable for each country you ship to.
Know your deadlines
Researching your tax deadlines for the year is a good idea to help make sure you meet them all and aren’t hit with any costly penalties, but if you outsource your accounting requirements, you won’t need to worry about this at all. Often having large teams of experienced and qualified accountants on their team, they keep themselves abreast of all tax requirements, including deadlines and changes to tax laws.
While it is possible to successfully run your eCommerce store without the help of an outsourced accounting firm, there’s no doubt that it can make the accounting processes easier and significantly less stressful. It can also give you valuable insights into your business’s finances, and help you plan your taxes better for a more prosperous future.