E-commerce is a booming industry, and India is one of the fastest-growing e-commerce markets on a global scale, boasting Compound Annual Growth Rates (CAGRs) exceeding 11 per cent.
Running an e-commerce business also comes with many challenges, such as managing inventory, shipping, customer service, marketing, and taxes. One of the most important and often overlooked aspects of e-commerce is accounting.
Accounting is the process of recording, summarizing, analyzing, and reporting the financial transactions and performance of a business. It helps e-commerce businesses to monitor their cash flow, profitability, growth, and tax obligations.
But, traditional accounting methods, such as using spreadsheets or desktop software, may not be suitable or efficient for e-commerce businesses. This is where cloud accounting comes in.
If you run an ecommerce business, you may wonder why you need cloud accounting and how it can benefit you. In this blog post, we will explain what cloud accounting is, how it works, and why it is essential for e-commerce businesses.
What is Cloud Accounting?
Cloud accounting means that all your business’s financial data is stored remotely and is accessible from any device with an internet connection. Remote access is useful because you can easily access and share accounting data. E-commerce and cloud accounting go well together.
Traditionally, accounting software was installed on your local computer or server, and you had to manually update and back up your data. This could be time-consuming, costly, and risky, as you could lose your data due to hardware failure, theft, or natural disasters. You also had to deal with software updates, compatibility issues, and limited storage space.
Cloud accounting eliminates these problems by using software applications that are hosted on the cloud, rather than on your local computer or server. You can access these applications through a web browser or a mobile app, and you can sync your data across multiple devices.
Certain cloud accounting software solutions offer the functionality to synchronize your e-commerce financial records with other aspects of your business, including inventory management and supplier coordination.
How Does Cloud Accounting Work?
Cloud accounting works by using software applications that are hosted on the cloud, rather than on your local computer or server. You can access these applications through a web browser or a mobile app, and you can sync your data across multiple devices.
To use cloud accounting, you need to sign up for a cloud accounting software service, which usually charges a monthly or annual subscription fee, depending on the features and services you need. You also need to have a reliable internet connection and a device that can access the web.
Once you have set up your cloud accounting software, you can connect it with your e-commerce platform and payment processor, such as Shopify, Amazon, eBay, PayPal, and Stripe. This will allow you to automatically import and categorize your sales, expenses, inventory, and tax data into your cloud accounting software. You can also manually enter or edit any transactions that are not captured by your e-commerce platform or payment processor.
You can then view, analyze, and report on your financial data using the cloud accounting software. You can also export your data to other formats, such as Excel, PDF, or CSV, or share it with your accountant, bookkeeper, or tax advisor. You can also access your financial data from anywhere, as long as you have an internet connection and a device.
Why Do You Need Cloud Accounting for E-commerce?
Cloud accounting can offer many advantages for e-commerce businesses, such as:
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Integration: Cloud accounting can integrate with various e-commerce platforms and payment processors, such as Shopify, Amazon, eBay, PayPal, and Stripe. This can help you automate and streamline your sales, expenses, inventory, and tax calculations, and avoid errors or discrepancies. You can also integrate your cloud accounting software with other tools and apps, such as CRM, email marketing, project management, or inventory management, to create a seamless workflow for your e-commerce business.
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Accessibility: Your financial data is accessible from any location, provided you have an internet connection and a compatible device. This can be useful for e-commerce businesses that operate online and have remote workers or customers in different locations. You can also collaborate and communicate with your team members, partners, or advisors using the cloud accounting software.
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Accuracy: Cloud accounting software can reduce human errors and improve data quality, by eliminating the need for manual data entry and reconciliation. It can also provide real-time and accurate information on the financial situation and performance of the e-commerce business, such as revenue, expenses, profit, and cash flow.
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Security: Cloud accounting can protect your financial data from physical damage, theft, or loss, as it is stored on secure servers in the cloud. Cloud accounting software also encrypts your data and uses strong passwords to prevent unauthorized access or interception by third parties. You can also set up different levels of access and permissions for different users, such as your employees, contractors, or accountants.
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Scalability: Cloud accounting software can adapt to the changing needs and demands of the e-commerce business, by offering flexible and affordable pricing plans, as well as customizable and scalable features and functions. It can also support multiple currencies, languages, and tax regions, to cater to the global and diverse nature of e-commerce.
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Insights: Cloud accounting can provide you with real-time financial insights and reports, such as cash flow, profit and loss, balance sheet, and tax summary. This can help you monitor your e-commerce business performance, comply with tax regulations, and make smart financial decisions. You can also customize your reports and dashboards to suit your specific needs and preferences.
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Collaboration: Cloud accounting software can facilitate collaboration and communication among e-commerce business owners, managers, employees, accountants, and other stakeholders, by allowing them to access and share financial data and reports online, in real time. It can also provide feedback and insights, as well as alerts and notifications, to help the e-commerce business make informed and timely decisions.
Suvit: A Modern and Convenient Way of Managing Your E-commerce Finances
Suvit can help you save time, money, and hassle, and improve your business efficiency and profitability. If you are looking for a reliable and affordable cloud accounting automation solution for your e-commerce business, you can check out Suvit.
Suvit is an accounting & auditing automation tool. It lets you automate all your tasks with the help of AI. You can create invoices, process sales/purchase bills, sales/purchase return bills, do journal entries and sync with your accounting software.
Suvit offers reports & analytics facility. With that, you can see weekly/monthly/half-yearly/yearly reports about sales, purchases, top-selling products, top customers and so many other things.
Moreover, you can do GST reconciliation and can track your GST returns, too.
To see how this works, Suvit offers a free trial of 7-days. Sign Up here!
Avail all the benefits! No credit card is required!
