As an e-commerce business, you’ve probably wondered what the best accounting practices are. These practices cover everything from cost of goods sold to inventory management to taxes and internal controls, and much more.  In this article, we’ll look at how these practices can help you manage your business’ finances. Here are a few of the most important ones:

Utilize free tools at first

While there are many paid tools for cash flow management, using a free tool such as Google Sheets is a great way to keep track of your finances. While this method is not completely automated, it can help you understand where you stand financially and how to make better decisions moving forward. By using an easy-to-use tool such as Google Sheets, you can create a statement that will reflect your cash flow in real time. The process is manual, but it is a worthwhile endeavor for the time you spend getting a clear idea of your situation. Also, to grow and scale your business you should utilize free business education sources such as TSAT’s FREE Sole Proprietor Vault!

Understand Cost of Goods Sold

COGS, or cost of goods sold, is a key component of your business’ overall profitability. This metric covers the direct costs of producing your products, including materials and labor, minus any indirect expenses, such as marketing or overhead costs. COGS vary between businesses based in physical locations and online businesses. In dropshipping businesses, your COGS will include the cost of the product itself, and the shipping costs will not be included. In figuring out the actual cost of goods sold, e-commerce business owners must consider direct and indirect costs. Using a trusted advisor will ensure that the cost of goods sold is correct.

Implement a system to track Inventory

The practice of inventory management involves planning and directing your company’s available products. Proper management of inventory is vital for your company’s profitability. You must keep a record of all items intended for sale, including overhead costs. The best way to do this is to model your system after other successful businesses, and adjust your inventory to reflect the changes in demand. It is important to keep your accounting method consistent throughout your business to avoid headaches and maximize your profits.

It is important to understand that inventory management can vary greatly between companies. The process for managing inventory increases in complexity as demand increases. As a result, many businesses choose inefficient inventory practices and pay higher taxes. Fortunately, inventory management tools have evolved and are now designed to meet the unique needs of small and large businesses. They also help streamline your business workflow by automating tasks and delivering better customer experiences.

Get ready for taxes

You should also know how to handle taxes correctly. Avoid any confusion with the IRS by keeping your books balanced and accurate. Creating a system that tracks cash flow is essential for the success of your online business.

Another way to stay on top of your finances is to hire a trusted accounting and finance advisor. You can use an trusted advisor accounting service to prepare taxes and maintain detailed records for your business. They can also provide financial advice and help you track your expenses. A trusted advisor can also keep track of your finances and help you make decisions about your business. It is important to learn as much as you can about accounting and keep a budget. Investing in accounting education can help you make the right decisions and achieve success.

Even if you are a solopreneur, learn Internal Controls

It is a popular misconception that startups and small businesses are too small to implement internal controls. While separation of duties may seem unattainable or costly with a small staff, the system is meant to be scalable to size and provides a blueprint for growth as the company scales. There are several internal control frameworks, including the system of checks and balances, the management of risks, and the communication of financial information. A sound internal control framework must be implemented throughout an organization. The owner or management must demonstrate integrity in all decision-making, a trusted advisor can help define and maintain your internal controls!

How can TSAT become your Trusted Advisor and help provide your small business with Financial H.O.P.E.?

Your Trusted Advisor… At TSAT, we know that a great businesses need to operate at high levels of service, accuracy, reliability, and throughput. We also know that the only way to ensure these things are achieved is to develop a comprehensive set of accounting and finance policies and procedures and to regularly train all personnel involved in the management and control of the company’s software. Only by taking steps toward accounting, quality assurance, and finances can a small business accounting department expand its business and improve its profit margins. It takes a little work to make sure that every aspect of small business accounting is running at full capacity, and we are here to help!

Here at TSAT, we are not simply bookkeepers. We work with you to provide a 360-degree strategic financial advice, including small business operations and investment guidance. We will help you stay ahead of the curve when it small business or personal investments!

If you are a gig worker or small business owner looking to grow your business, TSAT’s AMAZING team considers much more than just your taxes!


TSAT’s is your Trusted Advisor and will let you focus on your business’s core competencies! Whether you have a small business or you need help personally, TSAT can give you HOPE! Call us today! 

Phone: (417) 208-2858