Importance of Accounting in E-Commerce Business

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Accounting for e-commerce works differently than accounting for traditional trade business. Whether you make money selling on Amazon, eBay, Noon, Shopify or any other e-commerce platform, your business has industry-specific needs which need to be factored into your accounting and bookkeeping processes.

What are Bookkeeping and Accounting?

Accounting is the day-to-day recording of financial transactions, such as sales and purchases. Bookkeepers are then tasked with storing this information and organizing these transactions into the correct business area.

The data accumulated by bookkeepers is later passed on to accountants whose job it is to carry out analysis and create reports. The objective of accounting is to gauge the financial health of a business and help management to make informed critical business decisions.

Why are Bookkeeping and Accounting important?

E-commerce is a particularly fast-paced industry; success depends on you having accurate and reliable key performance information available at your fingertips. The annual tax filings and quarterly or monthly business reports which many traditional businesses rely on are simply too infrequent. As an e-commerce seller, you need to be able to measure not just overall real-time business performance, but every part of your business. In turn, this will help boost the profitability of your business by knowing which product, market or area to focus on.

Ever looked at your product range and struggled to work out which products are bringing in the most profit? Management Accounting will allow you to answer questions like: Which products should I sell the most? Which should I double down on? What does logistics cost? Will this product still be profitable if the supplier raises the cost price by 5%?

Implementing accurate Accounting for E-commerce

Whichever e-commerce platform you sell on, implementing industry-specific accounting practices is vital to helping you achieve your business goals. Unfortunately, e-commerce platforms like Amazon do not make it easy but with the right bookkeeping and accounting service, you will be able to understand the numbers and start using management accounting to help you make more informed business decisions.

Important things for Accounting to Run a Successful Ecommerce Business

  1. Keeping track of your cash flows
  2. Managing Inventory
  3. Credit and Commission
  4. Delivery Partner & Logistics
  5. Marketing Cost (Online Marketing & Offline Marketing)
  6. Other Costs & Expenses
  7. Tracking Your Earnings before Tax and Sales
  8. Tax Rates & Payments
  9. Calculating the Break-Even Point
  10. Balance Sheet

Horizon Biz Consultancy is experienced in accounting for e-commerce. Our UAE and India based, qualified accountants are experienced working with Amazon, eBay, noon, Stripe, Shopify, Paypal, Magento and many more popular e-commerce platforms. Plus, we’re used to working with e-commerce sellers who sell in countries all over the world and therefore need to take into account numerous different VAT rates, tax implications of a different part of the world and understanding of each sector’s performance.

We can provide you UAE’s best Accounting, Taxation, Finance Consultancy, and other allied services. With a solid accounting strategy, your e-commerce business can tap into some of the best talents in the industry. Save your business’ time and money both, today.

You can contact us directly. Our Experts will help you out!

Call: +971501042665
Email: [email protected]


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