Accounting might not make sense until a person runs a business and sees the chaos that ensues without it. ECommerce bookkeeping lies on pretty much the same concepts as accounting for regular businesses. One has to keep track of all receipts and invoices. Everything including those digital ones that come in the email must be properly stored to be used when working o the monthly report. Accounting gives one an idea of the financial situation. It also comes in handy when filing tax returns.
On a weekly basis, keep track of cash flow and variable expenses. Variable expenses are those new things like say marketing expenses. Like those promoted ads for example. One will be able to track whether this exercise has a positive impact on the business. This way, one can make quick and informed decisions whenever the situation demands it. As opposed to waiting until the end of the month to make these decisions.
Every single month a more comprehensive report should be created. Bring together every single record from the dailies to the weeklies. One is able to get a more general and wholesome financial position. By having these monthly reports for several months, it is easier to note trends and direction. One can even extrapolate and see the financial future. These monthly reports will also reveal the benefit or impact of special projects on the bottom line. Are they serving their purpose?
Accounts receivables are amounts due to the business. Work was done on credit and the client is yet to pay. Be very wary of the accounts receivable. Do not let the figure get too high. This is because the accounts receivables while shiny, are not really available funds. They are only applicable to plans and budgets when settled. That is when they are paid.
The other important bit is the bank reconciliations. This is an exercise where the accounting records are matched to the bank statement. This is meant to reveal possible inconsistencies and errors. The earlier it is done the better as it will be easier to correct them then. It will also prevent the same mistakes in the future. Some find this exercise very boring and might put it off. Frequency is determined by the frequency of transactions. Advice: suffer through it.
All important information must be kept safe. Safety does not mean lock up in a safe. Safety does not mean a password no one can figure out. Those are great but backup is important. Have a second set of records in the event of a loss. Back up storage can be bought or one can use the free resources available.
Time is a slippery thing. Such a rare commodity. There will never be enough time in the day, especially for sole proprietors. One might also still miss something despite learning important words. Then there are all the duties one is responsible for such that there is no more capacity left for accounting. Hire a professional.
Look for qualifications. Look for the cost of service. Look for appreciation for accounting ethics. These are some of the most important qualities of good accounting service.
On a weekly basis, keep track of cash flow and variable expenses. Variable expenses are those new things like say marketing expenses. Like those promoted ads for example. One will be able to track whether this exercise has a positive impact on the business. This way, one can make quick and informed decisions whenever the situation demands it. As opposed to waiting until the end of the month to make these decisions.
Every single month a more comprehensive report should be created. Bring together every single record from the dailies to the weeklies. One is able to get a more general and wholesome financial position. By having these monthly reports for several months, it is easier to note trends and direction. One can even extrapolate and see the financial future. These monthly reports will also reveal the benefit or impact of special projects on the bottom line. Are they serving their purpose?
Accounts receivables are amounts due to the business. Work was done on credit and the client is yet to pay. Be very wary of the accounts receivable. Do not let the figure get too high. This is because the accounts receivables while shiny, are not really available funds. They are only applicable to plans and budgets when settled. That is when they are paid.
The other important bit is the bank reconciliations. This is an exercise where the accounting records are matched to the bank statement. This is meant to reveal possible inconsistencies and errors. The earlier it is done the better as it will be easier to correct them then. It will also prevent the same mistakes in the future. Some find this exercise very boring and might put it off. Frequency is determined by the frequency of transactions. Advice: suffer through it.
All important information must be kept safe. Safety does not mean lock up in a safe. Safety does not mean a password no one can figure out. Those are great but backup is important. Have a second set of records in the event of a loss. Back up storage can be bought or one can use the free resources available.
Time is a slippery thing. Such a rare commodity. There will never be enough time in the day, especially for sole proprietors. One might also still miss something despite learning important words. Then there are all the duties one is responsible for such that there is no more capacity left for accounting. Hire a professional.
Look for qualifications. Look for the cost of service. Look for appreciation for accounting ethics. These are some of the most important qualities of good accounting service.
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Get a detailed list of important things to consider when selecting a bookkeeper and more information about a professional who offers ecommerce bookkeeping services at http://www.zynergybooks.com now.
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