Running an eCommerce business is hard work. You’ll need an eCommerce website builder, some stock, and eventually some staff. That part can be especially tricky. Most eCommerce businesses start as solo projects – maybe partnerships – and expand with growth. This means that people who perhaps were only looking to look after themselves for the foreseeable future are eventually looking after a team of people that are relying on the business to work.
That can be a lot of pressure, and a lot of work to keep everyone paid well and fairly. If that sounds like it’s a lot of trouble, don’t worry. We’re breaking down managing paystubs in your eCommerce business.
Nail the accounting basics
The concept of selling goods out of your shop website rather than a shop window makes sense to the majority of the population. Thanks to tools such as Wix’s eCommerce website builder, businesses that create a site can expect increased brand recognition, available online marketing tactics, more financial assets due to a lack of rent and utilities for a premise, etc. However, the accounting aspect is usually lost on both those looking from the outside in and the ones who want in.
It’s important to have a sophisticated finance function while selling products online, to help you work well. You will need to brush up on your bookkeeping, as the simple record of money coming in and out won’t be enough.
You will need to track Key Performance Indicators (or KPIs) such as cost of goods sold, inventory, cash flow, and gross profit to make sure everything is running smoothly.
Choose your e-commerce accounting software
And it only makes sense that if your business is online, then your accounting should be too. You will gain access to tools that can make a lot of elements of accounting easier but also be able to access your finances and records at a moment’s notice on any device you have handy.
Plus, reliable accounting software will allow you to integrate your finances seamlessly so that you can adhere to compliance and regulations no matter where you are.
You’re looking for accounting software that will integrate with your payment gateway, your e-commerce platform to allow for online buying and selling, your bank account, and inventory software so that you end up with a collection of integrated software that will work efficiently together.
Another thing to look out for is cloud-based software. By keeping your accounting records in a cloud, you will have access to them in real-time, in a more secure location than simply backed up to hard disks, and you will be able to see the transactional figures and KPIs as they happen.
Having everything integrated on a network will allow for minimal effort when navigating between all the software you’ll need to keep things ticking smoothly.
Consider outsourcing your accounting?
But that’s a lot to take in, and we’ve only just scratched the surface. Sometimes you’re better off outsourcing the money to a professional, especially if you are dealing with people’s paystubs and could get in some heat for making a mistake with money that people are relying on.
And the best part about hiring an accountant is that they essentially pay for themselves. A good accountant will go through your business finances and find areas where you can save on a regular basis. Those savings can go to your accountant’s salary, with some leftover for the business.
You can even get specialist eCommerce business accountants who will know how to seek out savings on the internet and focus on elements like cost per click, break-even point, cost of goods sold and gross profit, etc. This can be helpful if you are just starting and you perhaps aren’t grasping just how much you are spending. Looking at everything through a screen allows for us to not take the numbers we’re faced with fully on board.
More financial tips
As the business grows, especially with the onboarding of staff members, you’re likely to come across a lot of new problems as a business owner. There are new regulations to adhere to and new numbers to present to the taxman.
Keep correct accounting records depending on the state of your business. For example, limited company owners have different records to present or risk a ban, and sole traders need to keep a hold of records going back as far as five years in case they get inspected.
This is also why keeping all of your accounting online is beneficial. Gone are the days of piling files out of a box in the corner of the room in a panic. Instead, store five years’ worth of records online with extra security.
Keep in mind that managing your cash flow will depend on what you are selling online. For example, if you sell physical goods rather than digital content, you will need to learn inventory management to look after your stocks.
With these tips, you’ll be able to effectively navigate the complex field of ecommerce business paystubs and be on your way to a healthy business wallet and a happy team of staff.