Sure, these aspects are crucial for the success of your business, but you’ll also need to know which products are selling well and which aren’t. You’ll need to track your inventory and orders, and you’ll need to develop a pricing strategy that keeps your business competitive.
As a result, your eCommerce business’s finances can get out of control quickly if you don’t manage it properly. And let’s face it, to manage your business’s finances properly, spreadsheets are no longer good enough and fall short in several ways.
That’s where eCommerce accounting software comes in. It lets you manage all the mentioned aspects effectively and efficiently and, more importantly, saves you time and money in the process. So, with that in mind, let’s look at five reasons you should use eCommerce accounting software for your business.
The key features of accounting software
Before looking at these five reasons, though, it’s important to firstly look at some of the key features that accounting software offers. These include:
- Simplicity. One of the most important features of accounting software is that it’s simple to use. Ultimately, this means you don’t have to be an accounting expert to use the software, and you’ll be able to record your transactions and expenses fairly quickly and easily. Keep in mind, though, that although these accounting platforms are simple and intuitive to use, you’ll still need some level of accounting understanding and enough time to effectively manage your business’s finances.
- Reporting. Most accounting software platforms provide you with extensive reporting capabilities. This gives you the opportunity to analyse your business data and gain valuable insights into where you’re performing well and what aspects of your business need more work. These reports also allow you to spot trends and identify patterns in your business that allow you to plan better.
- Integrations. As an eCommerce business owner, you’ll typically use several platforms for things like customer relationship management, inventory management, shipping, and payment processing. Fortunately, many eCommerce accounting software platforms integrate seamlessly with these tools which allows you to eliminate manual processes and other time-consuming tasks when it comes to managing your business’s finances.
- Customer support. No matter how good the platform is or how easy and intuitive it is to use, at some stage, you’ll run into issues, and you’ll need assistance. Fortunately, most accounting software platforms offer customer support that can guide you in finding solutions for the issues you encounter.
- Maintenance. Nowadays, when you use accounting software it’s all online. This means you’re typically not laboured with any software maintenance like updates, and it’s all taken care of for you. As a result, you’ll save time and effort by not having to perform maintenance manually. It goes further than this, though. Because you don’t have to do updates manually, you’ll also ensure that the software you use stays up to date with accounting trends and best practices.
5 reasons to use eCommerce accounting software
Now that you’ve seen the key features of eCommerce accounting software, you probably already have a good idea of how it can help your business. Simply put, it will save you time, money, and effort. There are however several other reasons why you should use eCommerce accounting software.
1. Business finances overview
By using eCommerce accounting software that’s integrated with all your other systems, you’ll have a complete overview of your business’s finances in one place. This makes it easier for you to see whether your business is on track and to manage your finances without switching applications.
2. Cash flow management
Through its ability to make managing your business’s finances easier, eCommerce accounting software can simplify the process of cash flow management. This is simply because it shows you what you’re earning, what expenses you have, and how profitable your business is.
And when you properly manage your cash flow, you’ll be able to buy stock when you need to, invest in other tools to further simplify your processes and always have cash on hand for emergencies. In turn, this helps you to grow your business.
Another reason to use eCommerce accounting software is that it gives you the ability to analyse your business’s data. And when you analyse this data, you’ll get deeper insights into your business processes, its performance, and where you’ll be able to improve.
For example, when you analyse your sales data, you’ll be able to see what products are selling well and what products or not. In this way, you’ll then be able to focus on those products that sell, and you’ll end up saving money because you won’t stock products that don’t sell well.
Moreover, by analysing your data, you’ll be able to keep track of key performance metrics like your total sales, customer profitability, cash flow, and others. This allows you to see how your business is growing and track your improvement over time which also allows you to implement measures and strategies to ensure further improvement.
Simply put, in a competitive market, it’s vital that your pricing is competitive. In other words, your products should be priced to not only attract new customers but also retain existing ones.
The problem is that, as a business, you still have expenses. This means you can’t price your products too low, and you’ll have to develop a pricing strategy where you’re still competitive while still being able to make a profit.
eCommerce accounting software gives you this ability. It lets you see exactly how much you’re spending to buy stock and how much profit you make from every sale. According to these, you’ll then be able to determine the best price point to maximise profit while still offering value to your customers.
It goes further than this, though. When using eCommerce accounting software, you’ll also be able to determine where you can implement savings in your supply chain to maximise profit even further.
5. Data sharing
When you use an accountant for your eCommerce business, and you should, you’ll typically need to share data with them every month. This will enable them to do your business’s accounting effectively. The thing is, getting all your financial information together every month can be a cumbersome and time-consuming process.
Fortunately, eCommerce accounting software streamlines this process because it allows you to share all your financial data with your accountant effortlessly. It’s as simple as exporting your business’s financial data on-demand. This, in turn, saves you a lot of time which you could rather spend on growing your business.
A real-world example
To put the reasons why you need eCommerce accounting software and context and to better illustrate them, let’s look at a real-world example.
MORI (“Baby Mori”) is a high-growth, sustainable eCommerce business that offers its high-quality baby products direct to consumers. Whilst the company had its product under control, it felt that, when it came to the company’s finances, it could do things better.
For this reason, the company approached Accountancy Cloud that allowed it to get high-quality work without spending a lot of time and effort. Moreover, because it implemented many processes in its business, the fact that Accountancy Cloud could fully integrate with these platforms was a definite plus. This meant that MORI could use best-in-class tools to ensure their business’s success and profitability.
The results? Well, MORI found Accountancy Cloud’s experts to be an invaluable resource for its business. Because Accountancy Cloud integrated seamlessly with MORI’s other platforms and could provide valuable support when needed, MORI felt that they had their finances under control.
One of the reasons Accountancy Cloud could deliver this level of service was because of its unique mix of people and software. Simply put, because the Accountancy Cloud team has software that can help them with the mechanical pieces, they can focus on delivering stells customer experiences.
The end result is, with the amount of time MORI was able to save on their accounting and bookkeeping processes, they could put their efforts to work on more strategic priorities and other business functions which are essential, especially for a rapid-growing eCommerce business.
The bottom line
When you want to manage your eCommerce business’s finance effortlessly, it’s crucial that you use eCommerce accounting software. It will give you an instant overview of your income and expenses which, in turn, allows you to plan and budget better.
Apart from this, by analysing your business’s financial data, you’ll be able to streamline your process, stock more products that sell well, and develop pricing strategies that will help you stay competitive.
So, if you’re convinced that you need accounting software for your eCommerce business, why not consider Accountancy Cloud> We give you all the tools you need to effectively manage your cash flow, taxes, and much more. We do this by pairing our smart software with extensive financial expertise.
Moreover, our platform integrates seamlessly with all the tools you already use like Shopify, PayPal, and Stripe, and we offer dedicated, expert support for those times when you need help managing your finances. It’s as simple as logging in and connecting with a finance expert through instant messaging. Simply put, with the time we save you, you can focus on growing your online store.
To learn more about Accountancy Cloud and how it can help you manage your eCommerce business’s finances better and grow your business, contact us today to discuss your unique needs and requirements.
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