Running a successful business is an exciting venture for any entrepreneur. You may have record sales, but if you can’t manage your cash flow, you may be on a fast track to business failure. But this doesn’t have to be the case. Did you know that accountants can use ecommerce to boost their business and get more clients?
Let’s cover the basics first.
Accounting may look like a boring topic, but it’s a painful necessity. You can’t avoid it if you want your ecommerce business to grow. The concept of ecommerce in accounting involves the use of a digital platform that can be accessed by recording and analyzing all transactions taking place. In this post, we’ll discuss how accountants can use ecommerce to increase or boost their businesses.
To track business cash flow
If you want to know whether your business is making money, you should keep an eye on the cash flows. An accountant can use ecommerce to see what is coming in and getting out of the business. Whether you’ve seen cash flow complications or you’re looking for a new opportunity to grow your business, you should have enough cash at hand.
Because a steady cash flow is critical to the success of any business, an accountant can use ecommerce to buy inventory or make a last-minute deal for a product or service.
Since the concept of ecommerce revolves around buying or selling things over the internet, you can track your cash flow when you sell your products on ecommerce marketplaces.
An accountant will first analyze the sales channels to optimize inventory at any given time. For instance, paying for products with shorter cycles will help to speed cash in, so you can experiment on products that have shorter cycles.
If there’s a delay between the time a customer pays and when the money reflects the bank, then you should figure out when you’ll have money to spend. Ecommerce sellers like amazon offer a free template to track cash. Other tips that can help improve cash flow through ecommerce include:
- Avoid technical cash flow statements
- Offering monthly payment plan to your customers to guarantee what’s coming in
- Don’t pay for goods or services earlier than you have to
- Keep a reserve in your bank to take care of unforeseen events
Accountants can gauge their liquidity levels by isolating the accounts payable and receivable. That way, it’s much easier for a business to plan for the future. Generally speaking, accurate cash flows should be evidence-based such that they can help to do future forecasts.
To introduce money-saving solutions
Every accountant wants to focus on solutions that put their capital to the right use. One way accountants can use ecommerce to save money is the automation of tasks. Some of the key operations for any business are:
- Task and project management
- Customer service and ticketing operations
- CRM processes
- HR management
- Automation of document management
Since accounting revolves around the automation of repetitive tasks, embracing ecommerce can help to save time, improve productivity, keep accurate financial data, secure data storage, and retrieve data easily.
To categorize transactions
When money comes or leaves your business, it has to be recorded. Through a digital accounting portal, you can reliably track all cash flow. For instance, you can automate transactions using top-notch accounting software. This will eliminate the need to work on them manually.
With accounting software, you can set daily or monthly alerts. You can set an interval that suits you best. Whatever you want it to do will depend entirely on the volume of business. If you have a plan in place, you can avoid spending too much or too little.
If you integrate your accounting software with an ecommerce store, you don’t have to log in when performing every transaction. You can also do some reconciliation by ensuring what appears online matches with the account balance. As you do this, the deadlines for the transactions have to be kept.
Maintaining a budget
In any ecommerce business, maintaining a budget is of paramount importance. Think about it – no product is in demand all the year (even the staples). You expect some fluctuations over the year. With this in mind, you should budget some tasks for your clients to make accounting much easier.
Help to count inventory
Inventory refers to the product you sell. An accountant can use ecommerce to figure out the amount of inventory available and when to reorder. Sometimes, the simple task of tracking goods is complicated by the rate of sale (turnover), overhead costs, cost of purchase, etc. To ensure the profitability of your business, you need accurate inventory management. An accountant will know:
- When to order
- How much to order
- How long the stock will take to reach the store
Determining the cost of the inventory doesn’t have to be complicated. It will give an accurate picture of how many units of the inventory you have at a given time. An accountant can use perpetual inventory tracking using automated accounting software. So, every time they add a new product to the inventory, it will automatically update. If your business runs out of inventory, it will affect your ecommerce business success.
With an ecommerce business, you don’t expect the so-called `shrinkage’. This is where part of the inventory is damaged, stolen, or lost. Without a physical store, you expect lower shrinkage.
When businesses start, they may choose an inventory system that best suits their business. But only a few will revisit to see what works and what doesn’t work. Since inventory management is part of the overall accounting process, an accountant will leverage ecommerce to find an ideal inventory system.
Unlike brick and motor setups, the cost of setting up an ecommerce store tends to be lower. With a physical business, an accountant can use ecommerce to add an online component. This would be better than operating another storefront where one can easily lose money on.
Since an accountant understands the mechanics behind your business, they know the tools to use to supercharge the finances in the business. And because they understand the tax environment, they minimize the taxes and reinvest back into your business.
With ecommerce, you don’t need a physical store, so you’ll save on maintenance, utilities, and any other utilities. One can essentially open an ecommerce business without hiring additional staff. And because you’re not confined in a specific space, there’s no limitation to what you can do. Similarly, if you’re selling ecommerce products, you expect little or no overhead cost.
Will help figure out the breakeven point for your business
Budgeting is an important part of running your ecommerce business. An accountant will not only know what the business made last month but can also make projections of what to expect in the coming months.
While the task of ecommerce is to make a business thrive online, this is something that should be taken seriously. An accountant will help to determine if the turnover of a business is enough to finance its operations. If the revenues are greater than the expenses, then your ecommerce business is heading in the right direction.
Helps to get businesses finances in order
An accountant can use ecommerce to develop an expense tracking method. For instance, he or she can use cloud-based software to track all the expenses automatically. Also, there are dozens of tools that can help you handle bookkeeping. There are two ways to oversee bookkeeping: cash and accrual method.
The accrual method records expenses at the time of the transaction. You can record a payment rather than when it lands on a client’s account. On the other hand, the cash method records revenues as soon as they are received.
An accountant will review the method that works best and what doesn’t work. Of course, the time you spend doing your accounting will determine how much time costs your ecommerce business. Other ways an accountant will keep finances in order include:
- Preparing the financial statements
- Managing payroll processes
- Tax audit
- Closing the books at the end of the year
When you choose to work with an accountant, you’ll know how to hand over your financial tasks.
To access financial aid
An accountant can use ecommerce to access financial aid to expand their business. Some businesses usually have a problem accessing capital, but this isn’t a problem if the firm can show that it’s a going concern.
Allows the business to scale up quickly
With ecommerce, you can serve customers in a small space. And as your clients increase, you won’t feel like you’re in a crowded ecommerce space. This means that you can manage your ecommerce business without worrying about the physical aspects.
Helps to track logistics
Any accounting professional will tell you that logistics is key to a successful business. When all operations in your ecommerce business are digitized, you can collect data and crunch the numbers. You’ll not only understand what is selling best, but you’ll also focus on the absolute best.
How an accountant can use ecommerce to get more clients
If you want to make more money online, you should acquire most customers and retain the existing ones. So, how can an accountant help?
Getting referrals from clients
As an accountant, you should know that your clients don’t exist exclusively to you – they interact with other ecommerce businesses. So don’t be afraid to ask for referrals. Their recommendation will add value to your accounting firm. It can be helpful if you’re proactive. If you use the wait and see approach, you could be losing an opportunity of connecting with valuable clients.
Also, you can use professional sites like LinkedIn. When you put their testimonials on their website, you’ll be surprised by the kind of recommendations and endorsements you’ll get. Some firms use a structured reward program to provide their existing clients with defined discounts.
Upsell complementary services to your existing clients
Did you know you can boost your ecommerce business by offering additional services to your existing clients? If they use the services of the competitors, you should convince them that you’ll serve them better. Do you get the picture? You can use ecommerce to set up a special meeting or workshop. What additional benefits can you offer to your existing clients? Don’t just talk about your accounting firm, you should explain how you can offer them benefits like:
- Accurate and reliable data
- Fee benefits
- Better service
- Improved productivity
Partner with qualified professionals
Think about building alliances with other professionals. Through ecommerce, you can connect with other trusted professionals. Also, when you search online, you’ll find other competitive firms that you share a common goal. You can also partner with other firms that are less specialized in the practice. That way, you get to know some of their clients. Still, through ecommerce, you can partner with firms in different fields like:
In today’s commerce age, networking is an opportunity to meet new prospects. You can even arrange for a virtual meeting with prospects and explain what your ecommerce business offers. Think about what can make your business valuable to prospects.
Engage More Clients with Social Media
As a tech-savvy accountant, you should think about the collective intelligence of your firm. You can read a lot of information using social media platforms. Think about the benefits that you’ll reap if you share what you do with your clients. When selling your firm’s services to get more clients, you should give genuine information.
Any successful accounting firm doesn’t stop marketing. So, as you interact with customers, you should understand their requirements and act to the best of their knowledge. And because of the stiff competition in the market, you want to be sure you get to your clients first.
Through ecommerce, getting to your clients is often quicker. When clients send emails, you can capture important information. For example, if you’re promoting a specific product or service in Palm Beach, a Palm Beach Accountant can get in touch with their prospects with minimal effort. To ensure your business success, you should identify the clients’ challenges and make them a priority.
Ecommerce is arguably one of the expanding industries in the world. Since convenience and money prompt more customers to shop online, the accounting profession shouldn’t be left behind. That being said, accountants should be aware of their business strategies and how the internet fits in their company’s success. In any growing business, success is determined by hiring the right people. An accountant can leverage ecommerce to help the business thrive in the digital arena.