Success of Ecommerce business depends on how one manages the accounts. In Ecommerce business, we have to record all the transactions on a real time basis so that useful information can be derived. We have to make daily, weekly, monthly reports to study and evaluate how our business is performing. All this is very difficult and takes time in manual form of accounting. Thus we have to make our accounting effective and efficient by using Ecommerce Accounting Software.
In this article we guide the importance and requirements of Ecommerce Accounting Software.
What is Ecommerce Accounting Software?
Ecommerce Accounting Software which automates your accounting work, is developed for managing enterprise resource planning. The software handles all the inventory management, accounting, order management, payroll, banking, tax management, and other such requirements of the online stores and ecommerce businesses. The system helps in supporting all the accounting processes of ecommerce business – from generating invoices to various business reports. They provide a reliable system for all records and can help you analytical insight without disrupting processes such as payroll and tax audits.
How Accounting Is Important for Ecommerce ?
Accounting is the key for every successful business. The ecommerce accounting helps in running your business smoothly by ensuring regular tracking income expenditures, and also helps in ensuring statutory compliances towards investors, lenders, and other management departments.
There are three key financial statements generated by our records.
- Profit and loss information provided in the income statement
- Financial information given in the balance sheet for positioning your business in the market
- And, the cash flows happening in the business daily through cash flow statements which works as a bridge between the income statement and balance sheet.
Ecommerce Accounting saves your energy, time and money
Ecommerce accounting software records all the data related to a single transaction. It saves our energy, time and money. Manually after one transaction we have to give its effect on all the other parameters which will take time. But the ecommerce accounting software gave the effect of a transaction on all the parameters simultaneously which saves our time and energy and eventually our money.
For example we are taking the example of single sale. It will affect the books in following ways
- Product inventory changes
- Total sales made to a customer
- Sale value of the company
- Delivery cost, if any
- Invoice in case this material finished in inventory
- Tax information
- Comparison sheets of sales daily/weekly/monthly
Now we can see that with only one transaction, many accounts are affected. Here Ecommerce accounting software helps in analysing the whole effect of a transaction in the accounts. And thus we are able to make good business strategies and save our time, energy and money.
Ecommerce Accounting helps in maintaining good books
Ecommerce accounting software helps in showing the current financial position of the company at a given time. It records all the financial transactions be it sale, purchase, returns or other cash flows as they happen. This type of recording helps us to know how much funds we are having in our hands, how much we have already spent and what profits we are earning.
Ecommerce Accounting makes accounting simpler
Ecommerce Accounting Software makes accounting easy and simple. We can get the following information very easily:
- Sale and purchase on real time basis
- Item wise details
- Consolidated reports
- Accurate tax information
- Various MIS reports
- Area on which specific attention is required
Ecommerce Accounting helps in business scaling
As we get to know accounting is very much needed for the smooth running of the business and Ecommerce Accounting comes to our rescue.
Accounting of the small firms having few transactions and single location can be done easily. But as the size of our business increases, accounting needs also increase.
In large firms it is required to centralise all databases of multiple locations. A centralised database helps to analyse a large number of transactions, consolidate the various branches, and reconcile the large volume of data effectively and efficiently . Ecommerce Accounting helps in this case dealing with all the requirements.
In nutshell the objective which the company achieved with complex software, high man power cost and after some delay can be achieved in a very simple and cost effective and real time basis in Ecommerce Accounting.
Smart accounting helps in smart decisions
Ecommerce Accounting Software provides us with accurate information at a given time. On that basis we can easily make vital decisions like business expansions.
Ecommerce Accounting software helps us to provide the information which we can use to create future plans for our business. Financial forecasting helps us to know the future needs for our business.
Ecommerce accounting software helps in easily scaling your business. It provides automation in core accounting processes which makes it easy for processing the clients faster and you can easily include more clients.
Also, the automated invoicing and payment schedule helps in targeting the customers easily with transparency and simplicity of operations.