Essential book keeping reports allow you to keep a tight hold of your business finances and ensure that you are in tune with the health of your company.
After all, it’s important that you always have accurate eCommerce reports at your fingertips, so that you are never in a position where you are unaware how you stand financially. Of course, it is also important that you know where you stand so that you don’t make a bad decisions or miss out on a growth opportunities.
Why is it important to have access to good financial data?
All eCommerce entrepreneurs should look carefully at their financial reports including the following:
- Balance Sheet
- Profit and Loss (P&L)
- Cash Flow Forecast
- Inventory Forecast
Monitoring the above helps online businesses of all shapes and sizes to price products accurately, keep their tax obligations correct, help to manage cash flow, assist in important decision making and help you to understand when the best time is to scale up your business.
We’ve taken a look at some of the financial reports that all eCommerce businesses must have.
Here are the book keeping reports you should have access to:
A balance sheet allows you to gain an in-depth insight into the performance of your business by looking at your assets, inventory, prepaid expenses, accounts receivable and so on.
The second half of your report will also help you to shed some light on both your short term and long-term liabilities, including accounts payable and taxes.
Profit and Loss
A Profit & Loss report is equally important when it comes to managing your business finances and will outline your business’ financial performance over a set period of time. This allows you to closely monitor your business, predict future performance and take advantage of business trends.
Remember, you should always review your expenses on a regular basis (at least quarterly.)
Cash Flow Forecast
A cash flow forecast can do wonders for keeping your business finances on track, helping you to predict cash surpluses and shortages long before they happen. Predicting cash inflows and outflows, this book keeping report also takes into account cash sales, loans, investments, and accounts receivable collections.
Understanding your future cash situation is important if you ever need to purchase equipment, buy subscription services, secure loans, or even hire new staff.
An Inventory forecast is the process of gauging future sales volumes based on your recent and predicted sales trends. This forecast takes into account your SKUs, sales velocity, and seasonality. This level of insight allows you to make smart, informed decisions regarding how much inventory to order at a given time and what you should be ordering.
Although it can prove difficult for small businesses to manage these reports and monitor them consistently, it is important that you always have these reports readily available on a daily basis and they are as up to date as possible.
Many businesses find that implementing a regular reporting schedule works and of course, you should always find the time to review your figures. If you are struggling to keep on top of your financial reports, you can always enlist the help of a professional eCommerce accountant.
Get in touch!
Here at Unicorn Accounting, our team of specialist e-commerce accountants is happy to chat about all of your eCommerce accounting needs including book keeping reports. So, what are you waiting for? Let’s talk and maximise the growth of your e-commerce store.
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