How to manage bookkeeping for an online grocery store

Managing the bookkeeping for an online grocery store is essential, just like it is with any business. If you don’t have much experience with bookkeeping or accounting tasks, it’s good to do some research to understand how to manage your finances better.

This article will look at some tips on how to manage bookkeeping for an online grocery store. We’ll cover vital financial management tasks, such as tracking your cash flow and creating a separate business account. The topics we’ll cover include:

• Organise a system for taking and recording payments
• Keep your personal and business finances separate
• Pay attention to your cash flow
• Keep a record of your expenses
• How Countingup can help with bookkeeping for an online grocery store

A crucial part of doing the accounts for your business is tracking your income. As such, it’s a good idea to pick a preferred method for receiving payment when you first establish your business. As well as deciding how you’ll receive payments, you might consider setting up a system for recording your payments when you receive them,

You might change your preferred payment method in future or add additional options, but it’s important to have a primary way of receiving payments as it helps simplify your bookkeeping. You’ll have lots of customer payments to track, and potentially other sources of income as well. If you receive all these from different payment methods, it can become challenging to keep track of.

One of the most common methods of online payment is via credit card. This is quite simple to add to your website with modern website builders, but you can check out our article for more information. 

As for tracking these payments, you might consider setting up a business account. Business accounts like Countingup provide a destination for all your customers’ payments and automatically record details like the amount and date of payment.

It’s important to keep your business and personal money separate. It makes your finances more organised, and being organised is an integral part of running a successful business. 

Unfortunately, many small business owners make the mistake of using one current account. In a company like an online grocery store, where incoming payments will be frequent, this can make financial management very difficult.

Self-employed individuals have no legal obligations to open a separate business account, but it’s a great idea to do so. Setting up an account is usually very straightforward, and it can save you enormous amounts of time and money. 

In addition, without your personal transactions cluttering up your financial statements, you’ll have better access to information, which helps you make better financial decisions.

One of the biggest benefits is the insight you’ll gain into your cash flow. Cash flow is the movement of money into and out of your business — both your expenses and income make up your cash flow. Having a separate business account allows you to see this movement much more easily, which helps with things like budgeting.

One vital point to remember if you’re trying to run an ecommerce business (like an online grocery store) is that you need to monitor your cash flow. The motivation behind monitoring your cash flow is fairly simple: cash is necessary for your business to continue running. It allows you to purchase inventory, pay for delivery and ensure you can continue to sell groceries.

It’s best to maintain a positive cash flow, which means that your income is higher than your outgoing expenses. Negative cash flow is the opposite: it means your expenses are greater than your income. If you don’t keep a careful eye on your cash flow — which means tracking your spending, sales and operating expenses — you might notice it turning negative.

If you download the Countingup app, monitoring cash flow is much easier due to Countingup’s automatic profit and loss reporting. The Countingup app shows a real-time view of your profits and losses, updating as you make transactions on the business account. This will provide an accurate and easy-to-understand view of your company’s cash flow, as it displays both incoming and outgoing transactions. 

Bookkeeping is vital for any small business. One of the most critical tasks that make up bookkeeping is recording all of your business expenses. This is because your business expenses have a considerable impact on the taxes you pay. 

You’ll likely be sending your products regularly to fulfil customer orders, so there will be a lot of expenses to keep track of. You’ll need to record everything from your packaging costs to the fees you pay for shipping as a business expense. If you create a system for organising your costs, you can ensure they’re easy to access when filing taxes. 

Claiming expenses for tax purposes is one of the main reasons to track your expenses. For instance: if you earn £40,000 and claim £10,000 worth of expenses, you will only have to pay tax on £30,000 of your earnings. 

Claiming expenses can reduce your tax bill greatly, so remember to look into the range of business expenses you can claim while doing taxes. In addition, if you operate your company from your own home, remember that there are also expenses you can claim while working from home.

Most of the tips in this article revolve around keeping good financial records. This means that having a business account like the Countingup app can make managing your bookkeeping easier, since it will provide a single hub for you to store all your financial transactions. 

A particularly handy feature of the Countingup app is its automatic expense categorisation. Whenever you make a transaction using your Countingup account, it will go into an HMRC-approved category. This has the potential to save you hours of admin when it comes to preparing your tax return.   

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. 

The app is trusted by over 40,000 UK business owners and rated as ‘Excellent’ on TrustPilot. 

Click here to find out more and start your three-month free trial today.