Johnson Jeng and his business partner, Johnny Chen run Juno Power, an electronics company that sells portable mobile accessories online. Juno Power grew fast in a period of 6 months, and as with any growing E-Commerce business, accounting became a challenge once they had a steady inflow of orders.
Even though they had employed a CPA and other accounting services, for the first 6 months of the business, accounting was a huge headache and often a mess. Johnny felt that he was not able to be hands on when it came to accounting. A majority of online store owners today, like Johnny, view business finances and accounting as a matter of compliance.
Accounting as an activity is in most cases neglected or outsourced to a third party. The truth is, accurate and up-to-date accounting plays a crucial role in tracking the health and defining the roadmap for your e-commerce business. It's all in the numbers.
● What was your revenue last month?
● How much more was it from the previous month?
● Were you profitable?
● Has your month-on-month profit margin increased?
● Where is your hard-earned money?
● Is it lying in your warehouse in the form of inventory, or with your customers who are yet to pay you, or was it all lost in shipping and other expenses?
● How much do you owe in Sales Tax?
As a business owner, knowing the answers to these questions is a
must. These numbers give you an understanding of how your business
is doing financially.
For all you know, your business might be losing more money than
it generates! Many profitable online stores go out of business
because they don't know their numbers. While it is good to take
help of a professional to handle your accounting, it is unhealthy
to completely ignore accounting as a function.