Aaron Rodriguez explains how e-commerce businesses can effectively manage their accounts
It is not enough to believe that you receive enough income if most of it is due to paying suppliers and providing services, among other things. Keeping the accounts of your online store allows you to have a real analysis of the economic situation of your business and whether it is up or down. Aaron Rodriguez uses his knowledge of business optimization to explain how e-commerce businesses can better manage their accounts.
There are also other factors to ensure the success of an online store, such as keeping your business legal. The IRS ensures that all small and medium-sized businesses (SMEs) have their accounts assessed. This is achieved thanks to the different types of formats that they must be up to date with the legal requirements.
To know the monetary value of your business. If later you want to sell your business, your business accounting allows you to know the monetary value of your online store and how much you could offer it. An online store depends on two fundamental factors to ensure success, and these are accounting and marketing strategies.
Accounting is responsible for measuring and evaluating the performance of marketing strategies used in the online store, Rodriguez explains. If there is an inconsistency in the strategies employed in the business model, there may be a decrease in revenue and consequently the bankruptcy of the business.
For this reason, it is important to develop strategies based on a specific business model. It is well known that one of the characteristics that increases the probability of a sale is to offer different payment methods to the customer so that he can buy your product or service.
No matter how many payment wallets you add, attach the same bank account to each one. In this way, it will be much faster and easier to calculate the income and expenses of your online store. It is also important that this bank account bears the name of the company or the online store, and that it only and exclusively manages the income and expenses belonging to the online store.
Invoices and tickets will prove the movement of your online store. An invoice includes the tax data of the sender as well as the recipient. A ticket can only collect data from its sender. The most advisable thing is to empty this information in the accounting books so as not to have to run with last minute corrections. The IRS doesn’t forgive delays, Rodriguez points out.
In the accounting books are attached all the movements that occur within the company on a daily, quarterly and annual basis; when it’s daily, we keep a daily record of what’s going on in the company. Although it is not currently a legal obligation, only events that do not exceed three months can be written.
Then there is the quarterly or annual. In these, you write about the company and its development. Normally, balance sheets on the company’s equity position, income and expenses are described here.
These reports greatly help in assessing the state of your business. For a report to have the effectiveness you are looking to measure in your online store, it is best done on a quarterly basis.
If at the moment you cannot afford an accountant, let alone an accounting program, then the best thing to do is to do the accounting yourself in an Excel document. Rodriguez thinks this tool is of great use to many of these entrepreneurs who may enter the business world.
Then there are the profit and loss reports. These reports greatly help in assessing the state of your business. What you lost outweighs what you gained? Are you overspending on supplier payments? Is your business profitable? For a report to have the effectiveness you are looking to measure in your online store, it is best done on a quarterly basis.
If you plan to import goods from other countries to sell in your online store, you may be subject to taxes and duties. Therefore, it is very convenient for you to research and educate yourself about these taxes so that you know the rules from the start. If you plan to import goods, you can use a tax calculator to help you estimate your business fees and plan your costs.
In e-commerce, sales tax regulations can be confusing due to localization issues,” says Rodriguez. In online sales, you regularly sell to customers who may be in another state, province, or country. Selling to international customers can be even easier than domestic sales because you are not required to collect sales tax when selling to customers in other countries.
About Aaron Rodriguez
Aaron Rodriguez is an expert e-commerce consultant in Latin America. He helps businesses in the region optimize all of their e-commerce operations to increase sales and customer loyalty, and also has extensive experience in developing strategic and external alliances to advance departmental and organizational goals. He has traveled extensively throughout Latin America assisting a number of businesses and when not traveling devotes all of his available time to his wife and children.
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