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Every business needs to be on top of its finances, but it’s essential to stay up-to-date on the latest accounting trends for eCommerce businesses.
With the ever-changing landscape of online shopping and payments, there are always new things to consider for your bottom line.
Whether you’re just getting started with your e-commerce business or you’ve been in the game for a while, it’s essential to stay on top of the latest trends. Here are ten accounting trends you need to know for your e-commerce business:
eCommerce Cloud Accounting
Cloud accounting is a type of accounting that uses the internet to store financial data. This means that you can access your financial information from anywhere, at any time.
Cloud accounting is an excellent option for e-commerce businesses because it’s easy to use and affordable. Plus, you can connect your accounting software to other business applications, saving you time and money.
Cloud accounting has been a key trend in the accounting industry, especially because many companies now embrace remote working.
As an e-commerce business, you’ll need most of the available business space for your inventory. It’s, therefore, more practical to use a remote accounting team than squeezing everyone into your limited e-commerce store.
Outsourcing your accounting needs is a great way to save time and money. When e-commerce business owners outsource the accounting function, they can choose the level of service they need, which can be helpful if they’re short-staffed.
Small and large e-commerce businesses can outsource their accounting function for varied reasons.
Small business owners will do it to avoid hiring additional headcount and to have access to a team of experts who they could, otherwise, not afford to hire. On the other hand, large companies will outsource part or all of their accounting functions to cut costs.
Automating Accounting Function
With the rise in e-commerce businesses, there’s also been an increase in accounting software options and the push for having a modern accounting department. As a result, many different types of accounting software are available that can automate various accounting tasks such as invoicing, bookkeeping, and tax filing.
This makes the accounting process more efficient, but it also reduces the chances of human error.
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Another trend that has emerged in recent years is data analytics in accounting. With the vast amounts of data that businesses now have access to, it’s become possible to glean valuable insights that can help improve business operations.
Accountants are now using data analytics to identify trends, optimize processes, and make better decisions.
Multiple Payment Solutions
In the past, businesses would typically only accept one or two forms of payment. However, in today’s world, there are many payment options available, and e-commerce businesses need to be able to accept all of them.
This includes credit and debit cards and digital wallets like PayPal and Apple Pay. By offering multiple payment options, businesses can make it easier for customers to purchase their products or services and thus increasing cash flow.
However, when cash flows into your business through different mediums, it becomes challenging to record accurate entries, and you might quickly end up with discrepancies.
E-invoicing allows businesses to send invoices electronically, saving time and money. Instead of mailing paper invoices, companies can send them electronically and get paid faster. This also helps businesses keep track of their spending as they can see all their invoices in one place.
Tax Policy and Regulatory Changes
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The tax landscape is constantly changing, and it can be hard to keep up with the latest changes. With the approval of the newest tax policy and regulatory changes, popularly known as the COVID stimulus, accountants are now tasked to learn and implement the new laws in their subsequent operations.
Some of the common changes in this new tax law regulations that will directly affect accountancy include:
- A simplified process for PPP loans under $150,000
- Tax extenders
- PPP expense deduction
- Second-draw PPP loans
With these kinds of changes coming up all the time, it’s vital to make it your duty to understand how they might affect your business – and, more importantly, to have an accountant that can help you stay on top of it all.
Social Media Integration
One of the most important things you can do in today’s business world is to integrate your accounting with your social media. This makes it easier to track expenses and revenue, but it also makes it easier for potential customers or clients to find you. There are several ways to go about this, but one of the most popular is to use an app like Xero or QuickBooks.
Social media is also an ideal platform for accountants to connect with their peers and colleagues. LinkedIn is an excellent example of this, as it allows users to share articles, blog posts, and even white papers. This can be an invaluable resource for both small businesses and larger organizations.
Another way to use social media in your accounting business is to connect with other businesses in your industry. For example, if you’re an accountant specializing in small businesses, you can connect with other small business owners on Twitter or Facebook. This can help you build a network of clients and referral partners.
The accounting profession is changing, and the changes are being driven by technology. In the past, accounting was a reactive profession. Accountants would wait for businesses to come to them with their financial information. This meant that accountants were often the last to know about problems within a company.
With the advent of new technologies, such as cloud-based accounting software, accountants can now be more proactive. They can monitor a client’s financial activity in real-time and identify problems early. This helps businesses avoid financial disasters and makes the accountant’s job much more manageable.
Changing Accounting Standards
Another trend that is affecting the accounting profession is the changing accounting standards. The most notable change is the switch from GAAP to IFRS. GAAP, or generally accepted accounting principles, is a set of standards that accountants have used. However, there are some drawbacks to using GAAP.
IFRS, or international financial reporting standards, is a newer set of accounting standards gaining popularity. Many businesses are switching to IFRS because it is more flexible and easier to understand. However, accountants will need to be familiar with GAAP and IFRS to do their job correctly.
These are just a few accounting trends that your e-commerce business should know. Staying up-to-date on these changes will help you ensure that your business complies with the latest regulations.
It would be best if you also kept an eye out for new software and technologies that can help you manage your accounting more efficiently. With the right tools, you can streamline your accounting process and save time and money.