Introduction
Before we get into the details of an eCommerce bookkeeper, let’s cover what they do. An eCommerce bookkeeper specializes in handling all the finances of the eCommerce stores, unlike a general bookkeeper. They know the specific challenges and opportunities that online businesses face, like tracking the cost of inventory, managing sales tax, and handling various payment gateways.
Key Services Of an eCommerce Book Keeper
They match your outgoings with your incomings so you keep afloat. Here are ways an eCommerce bookkeeper can assist with that:
Observation of Cash flow
An eCommerce bookkeeper monitors your cash inflows (sales, returns, loans) and outflows (suppliers, shipping, marketing expenses). This information tracks patterns and potential future cash flow requirements accurately. This proactive approach allows you crazy levels of foresight, avoiding impending shortfalls, and provides knowledge of exactly how much cash you have in hand at any given point to meet your obligations.
Managing Inventory Costs
Inventory management is one of the key aspects of cash flow management in eCommerce. Your bookkeeper will assist you in tracking the cost of goods sold (COGS), monitoring inventory (fixed assets) levels, and inventory turnover. An eCommerce bookkeeper can also help you untie cash that could be stuck in dead inventory by ensuring you are neither overstocked nor understocked.
Forecasting and Budgeting
Cash-flow forecasting is one of the most valuable things an eCommerce bookkeeper provides. They’ll review your historical financial data to forecast future cash flow needs. This knowledge is crucial in formulating a proper budget, strategizing for expansion, and deciding whether to invest in advertising campaigns or launch a new line of products.
Optimizing Accounts Receivable and Payable for Better Cash Flow Management
Timely management of accounts receivable and payables is the key to keeping your cash flow balanced. An eCommerce bookkeeper ensures your customers pay you without delay, and pay your suppliers and service providers when payments are due. Finding this balance helps you avoid late fees, maintain good relationships with vendors, and keep your cash flow healthy.
Tax Management
Tax liabilities can crimp your cash flow, particularly if you aren’t ready for them. With the help of an eCommerce bookkeeper, you can save enough money to fulfill your tax obligations and avoid any penalties. Tax advisors can also work with you on tax planning strategies to help lower your tax liability and maximize cash flow.
Optimizing Payment Processes
Effective payment processing is essential for healthy cash flow. An eCommerce bookkeeper manages multiple payment gateways to make the payment process easy and fast. Getting paid faster means more cash in your account to cover expenses and reinvest in your business.
Advantages of Hiring an eCommerce Bookkeeper for Cash Flow Management
Having discussed what an eCommerce bookkeeper does, let’s look at the pros they offer when managing cash flow for your online store.
Improved Financial Visibility
The number one reason you should be working with an eCommerce bookkeeper is the insight into your finances. You can see detailed reports and periodic cash flow statements to know where your money is going and how much is on hand. This transparency allows you to make informed decisions related to your business more seamlessly.
Reduced Financial Stress
Cash flow management can be stressful, particularly when sales are slow or expenses are high. An eCommerce bookkeeper removes the burden from your shoulders by keeping a close watch on your finances and warning you when things are out of place before it becomes a problem. With their knowledge, you can be calm because your cash flow is addressed correctly.
Increased Profitability
An eCommerce bookkeeper directly impacts your bottom line by managing costs, optimizing inventory, and improving payment processes. Better cash flow management results in higher profitability that can be reinvested in your business and seize new opportunities while avoiding costly mistakes.
Scalability
When your business grows, your needs become clear to keep the financials on track. An eCommerce bookkeeper can scale their services to the size and complexity of the business, so you never lose control of your cash flow management.
Compliance and Risk Management
It is necessary to adhere to the tax laws and financial regulations to avoid penalties and fines. The eCommerce bookkeeper keeps your business compliant with all relevant financial laws and best practices. They will also assist you in managing financial risks by identifying potential problems early and planning strategies to mitigate them.
Top tips on setting up the Cash Flow with an eCommerce Bookkeeper
To leverage the benefits of an eCommerce bookkeeper, here are some useful tips on cash flow management for your online store:
Be Vigilant and Review the Financial Reports
Collaborate with your eCommerce bookkeeper to go through financial reports regularly. These reports will help you know the cash flow and stability. Conduct regular reviews so you stay up to date and can adjust.
Set Clear Financial Goals
Have a defined financial plan for your business and make sure to inform your eCommerce bookkeeper about it. Whether it’s about maximizing profits, paying down debts, or saving for expansion, specific goals help your bookkeeper to adapt their services to suit your needs.
Maintain a Cash Reserve
Partner with your eCommerce bookkeeper to establish and nurture a cash cushion. This reserve serves as a buffer, which you can tap into if you need to fix a major problem, invest in a new project, or otherwise free up money without affecting your cash flow.Automate Where Possible
Base your cash flow management on automation, your eCommerce bookkeeper helps you automate invoicing, payment reminders, financial reporting, etc., allowing you to focus on the core of your business while ensuring that all the important processes run smoothly.Communicate Regularly
Key to this component is open communication with your eCommerce bookkeeper regarding cash flow management. You’ll also want to keep them updated on anything happening with your business, whether new product lines or shifts in marketing or operations, so they can adjust accordingly.
Conclusion
One of the most difficult aspects of managing an online store is managing cash flow — but it is also one of the most important ones. An eCommerce bookkeeper can help you get on top of your finances, and give you the foundation to grow your business exponentially. From tracking cash inflows and outflows to streamlining payment processes and complying with regulations, with the help of an eCommerce bookkeeper, you will get the expertise and support you need to maintain a healthy cash flow for your online store.
If you’re ready to get a grip on your cash flow and position your online store for success, Tasks Expert can help. We Are Here for Your team of experts also includes eCommerce bookkeepers who will handle all your financial management. Contact us today for more information about how we can help your business.
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Tasks Expert offers top-tier virtual assistant services from highly skilled professionals based in India. Our VAs handle a wide range of tasks, from part time personal assistant to specialized services like remote it support services, professional bookkeeping service etc. Furthermore, it helps businesses worldwide streamline operations and boost productivity.
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About Author
Gary Katz
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