Business is exciting and interesting. That is until as a sole proprietor one has to take time away from the excitement to do their Amazon bookkeeping. It is dull and time-consuming. It is difficult and complicated. It can be overwhelming if one has had many transactions during the period. There is software of course but then what good is software if one does not know which number to put where?
One of the biggest reasons to get the accounting right is the tax. Taxes must be filed on time. They must also be filed correctly. Failing at either one or both of these puts the business in a precarious position. There is no telling how much of a dent the business will suffer due to penalties.
Imagining running a business and never knowing in which direction it is going? How will one focus and budget their efforts? What if it is time to just call it quits and find a new direction in life? What then? By doing the books one can see how well or bad their business is doing. E-commerce is just like any other business. One needs to constantly check on the health.
The first action is to look at the performance of this business before looking at overall health. Performance is all about profits and losses. Growth patterns and movement trends. Comparisons can also be made from a profit and loss statement. This one is pretty straight forward actually.
The statement of financial position or as it commonly known, the balance sheet is also very handy. See one may have all the expenses and profits in the first document. However, this second document offers a more comprehensive look at the business. Where the first document is akin to checking how high the temperature is, the second is all about diagnosing the underlying illness.
The key to ensuring comprehensive coverage of all relevant data required for this exercise is ensuring proper record keeping. There should be some sort of journal that one refers at the end of the months when doing their accounting. Receipts must also be properly stored. If one has to get cloud space to store these bits then it should be done.
The key to proper accounting is promptness. If one purpose to do their books every month then it should be done otherwise it just piles up. Piling up means that one will have to rush when there is a deadline to beat.
Keep the accounting records. Once they have been submitted to whatever parties, keep a copy. There is no limit to how long they can be stored. Just store them. They will come in handy if ever one wants to sell the business. It does not hurt to have historical information like that.
One of the biggest reasons to get the accounting right is the tax. Taxes must be filed on time. They must also be filed correctly. Failing at either one or both of these puts the business in a precarious position. There is no telling how much of a dent the business will suffer due to penalties.
Imagining running a business and never knowing in which direction it is going? How will one focus and budget their efforts? What if it is time to just call it quits and find a new direction in life? What then? By doing the books one can see how well or bad their business is doing. E-commerce is just like any other business. One needs to constantly check on the health.
The first action is to look at the performance of this business before looking at overall health. Performance is all about profits and losses. Growth patterns and movement trends. Comparisons can also be made from a profit and loss statement. This one is pretty straight forward actually.
The statement of financial position or as it commonly known, the balance sheet is also very handy. See one may have all the expenses and profits in the first document. However, this second document offers a more comprehensive look at the business. Where the first document is akin to checking how high the temperature is, the second is all about diagnosing the underlying illness.
The key to ensuring comprehensive coverage of all relevant data required for this exercise is ensuring proper record keeping. There should be some sort of journal that one refers at the end of the months when doing their accounting. Receipts must also be properly stored. If one has to get cloud space to store these bits then it should be done.
The key to proper accounting is promptness. If one purpose to do their books every month then it should be done otherwise it just piles up. Piling up means that one will have to rush when there is a deadline to beat.
Keep the accounting records. Once they have been submitted to whatever parties, keep a copy. There is no limit to how long they can be stored. Just store them. They will come in handy if ever one wants to sell the business. It does not hurt to have historical information like that.
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