When a business is first launched, there is typically no need for an accountant until the business has grown. However, any business owner can do their own accounting even with a fairly large business by following some of the steps below.
One of the biggest mistakes many company owners make when launching their Shopify store is not using the right tax settings:
- If you are planning to expand into international markets, it’s important to update your tax settings in order to accompany this expansion. Because of this, you will want to be prepared to set up a tax rate for each country you plan to ship your product to. This can be done fairly easily by following some tips from accountants online.
- Many products have a tax exception, which should be accounted for each year when taxes are filed. While some of your products may not have had a tax exception at first, new additions may very well have their own, making it important that you apply the proper exceptions each year as you grow.
One of the best advantages of using Shopify over other eCommerce store platforms is its built-in accounting software that makes accounting easier than ever for growing online businesses hosted by the company. By integrating accounting software with your store, each of your sales can be automatically entered into the software in order to do all of the accounting work for you, without the need to hire a professional.
Another benefit of integrating accounting software with your Shopify store is the ability to generate reports that will help you determine the financial position of your company more accurately. Reports can be generated to know exactly how much money is in the bank, and can be used to better understand how much profit is actually being made each year.
Accounting software is designed with important formulas in mind, making it very useful to determine the cost of goods and labor, as well as the gross margin and net profit of the company. Because of how the software is designed, users do not need to have any former knowledge of accounting in order to know exactly how their company is performing.
Finally, it’s important that owners of medium to large companies plan ahead for tax deadlines, as it can be daunting to gather all necessary documentation just days prior to tax day. Owners of companies should keep track of all documentation throughout the year, and go through it from time to time to begin preparing for future tax deadlines. While this may feel tedious throughout the year, it pays off when everything is organized and there is no confusion just prior to taxes being due.