If you’re like most entrepreneurs, you aren’t as organised as you’d like to be when it comes to the end of the financial year, so this is the perfect time to take stock of your accounting practices and make sure you’re on top of everything going into a new financial year.
We sat down with Wayne Richard from Bean Ninja’s to go over the 5 most common accounting mistakes eCommerce entrepreneurs make.
The 5 most common accounting mistakes online store owners make are:
1. Bank balance bookkeeping
Also known as “back of the napkin bookkeeping”, Wayne explains what this is and how to avoid this mistake.
2. No cash confidence
Lacking the ability to know (for certain!) how much cash is on-hand or where and when to deploy it is a big mistake. We talk about how to overcome this and we reveal the system that we use to always have enough cash to pay our bills, pay ourselves and turn a profit!
3. Scaling losses
When people start our eComm Ignitor program, one of the first things we teach them is about margins and almost every time people realise their prices are too low. So it’s no surprise that failure to measure and understand contribution margins or ratios is on the list.
4. Inventory control
Cash flow and inventory problems go hand in hand and can seize business operations. One of the most common issues with our Facebook Ads clients is that they run out of stock. This causes issues with unhappy customers as well as lost momentum with paid advertising.
5. Lack of understanding of sales tax responsibilities
Pleading ignorance is not a valid excuse when the taxman comes knocking. Understanding your tax obligations is an absolutely essential part of running an online store.
Watch the video to see the full chat. Grab a pen and paper because you’ll want to take lots of notes on this one!
Wayne has also offered two exclusive free gifts for Unstoppable eCommerce Entrepreneurs.
Free Bean Ninja’s eCommerce Toolkit
- Step-by-step guide to getting your Xero file in order
- Cashflow Forecast Template to help you plan for the ups and downs in your monthly cash flow
- Bookkeeping timetable template to help you stay on top of your finances & get current reporting
- Weekly newsletter sharing resources to help you create your freedom business.
Click here to access the free eCommerce Toolkit.
Free Complimentary Know Your Numbers Audit (value $249 USD)
- Book a 30-min audit and you’ll get:
- A clear picture of your goals and how to smash them
- Your own customized financial strategy
- Clarity on how much budget you have available for investing in growth
- Guidance on optimizing your cashflow
- BONUS Cashflow planning tool
Click here to book your free know your numbers audit with Wayne.
Written by Megan Winter
Megan is an award-winning marketer and has worked with some of the fastest-growing eCommerce brands in the world.
Megan loves helping ethically-produced, heart-centred, soul-driven online store owners to make more income and achieve more impact.