The best accounting practices for online businesses

Business - 15/03/2021

Online businesses have always enjoyed a good level of success. Even more so since the Coronavirus pandemic. With no other way of buying the things they want or need, consumers have flocked to online businesses and e-commerce.  Companies that normally operate in the traditional way, have moved online which has allowed them to keep going through the national lockdowns and social restrictions. 

When it comes to the accounting practices of online businesses, there’s a lot to consider.  Here we discuss a few key things that will help you stay on the right track. 

Install accounting software. 

This is a really useful step to take when you’re setting out on your online venture. There are a fair few accounting softwares out there, so it’s important to do your research. That way you’ll be able to find the best one to suit the needs of your business.

Take a look at Xero as an example – a really popular accounting software. It’s a good one to use if you’re a big business or a law firm, but equally useful for Amazon or eBay sellers, with features such as:

• Easy reconciliation for Amazon transactions
• Cash flow integration with Amazon Seller
• Your inventory being synced with the software

Here at Numero, Xero is just one of the accounting softwares that we specialise in. So if you need any guidance on how to make the most out of it, then you’re in the right place.

Open up a separate business account.

If you don’t separate your personal expenses from your business expenses, things can get very confusing very quickly. You might think that if you’re a small business then you don’t need a separate account. However, if you don’t, you run the risk of losing track of your finances. 

Keeping separate accounts will give you a clear picture of your cash flow, which makes everything much easier in the long run.

Pay close attention to your cash flow.

What exactly do we mean by cash flow? By definition, it’s the amount of money moving into and out of a business. When you’re running a company, you need to be on top of your cash flow. It’s a window to what’s going on in your business, and it will help you to spot any errors early on so you don’t have to deal with bigger problems later down the line. Not to mention the fact that it also helps to boost business growth, meaning that you’re instantly on your way to a more successful business journey. 

Manage your inventory.

Whilst we primarily work with law firms, our advice is useful across a number of different industries. If you’re an online retailer, it might be trickier to manage your inventory if you’re selling products and providing services online across different channels, rather than in one physical place. A good way to do this is to store a minimal amount of inventory you want and to never let your stock get lower than this amount. That way, you’ll always have a safety net in case anything goes wrong (lost deliveries, damaged in transit etc.)

Do you need help with your accounts?

Starting an online business can seem daunting. Moving an existing business online can be even more so. We’ve worked with a lot of law firms during the pandemic who’ve realised that even traditional businesses can provide a seamless client journey at the touch of a button.  So if you need some advice on how to manage your accounts, then Numero has got you covered. 

Just get in touch with us today to find out more about our services.