Are you starting or already running an eCommerce company? Are you wondering if you need to keep financial statements like other brick-and-mortar shops? Well, here is what you need to know about financial statements required by an eCommerce company.
Thanks to Infinity22, you can rest assured that your eCommerce financial statements are in order. We are here to help you with eCommerce accounting solutions so you don’t have to worry about it. Call us now to get a free consultation with our eCommerce accounting experts.
Why Do You Need Good Financial Data?
Every eCommerce store needs good financial data for the following reasons.
• To allow proper and accurate pricing of goods and services.
• To ensure proper decision-making when hiring, borrowing money or working with old or new investors.
• To ensure proper tax records to avoid heavy fines and penalties.
• To guarantee proper cash flow from the business.
• To ensure proper budgeting.
• To understand when you need to scale the business.
With Infinity22 by your side, we can ensure that you achieve these and more benefits of proper financial records for your eCommerce business. Call us now and book a free consultation with our eCommerce accounting experts.
Types Of Financial Statements For An eCommerce Business
1. Balance Sheet
A balance sheet allows you to analyse your business properly. First, there is a list of both current and fixed assets. Current assets include cash, accounts receivable, prepaid expenses and inventory. Fixed assets include furniture, equipment, vehicles and much more.
Secondly, there is a list of liabilities, both short-term and long-term. Short-term liabilities include taxes and accounts payable. Long-term liabilities include loans and notes payable to shareholders.
2. Profit And Loss Account
A P&L is used to show the financial performance of the business over a period of time. It can be used to monitor KPIs, pick up on trends or predict future performances. It is also referred to as an income statement. A P&L is used to track sales and expenses to calculate the net profit.
Note that there is a difference between the balance sheet and the profit and loss account. The balance sheet shows your financial position at a particular point in time. The P&L shows your sales and expenses over a period of time, usually a year or a few months.
3. Cash Flow Forecast
You can use the cash flow forecast to predict cash shortages and surpluses before they happen to avoid any surprises. It accounts for cash inflows such as loans, cash sales, accounts receivable collections and investments. It also accounts for cash outflows such as assets purchased, expenses paid, draws, inventory and distributions.
A cash flow forecast is important especially if you want to make a new investment and want to assess whether or not you can afford it. You should have a cash flow forecast when you are planning to make any new purchases for your eCommerce business.
4. Inventory Forecast
It refers to the process of assessing the volume of your future sales based on your recent and predicated sales trends. With an inventory forecast, you will have an idea of how much to order at a given time and when to order it. When running an eCommerce business, you need to make sure that you have enough inventory to handle any unexpected demand but to avoid excess inventory.
Why Choose Us?
With Infinity22, you can always count on the best financial statements for your eCommerce store. We can make sure that you have the right financial statements for your needs. Call us now and schedule a free consultation with the top eCommerce accounting experts for your financial needs.