9 Tips for Your eCommerce Business Cash Flow
Starting an online business doesn’t have to be as challenging as building a brick-and-mortar store in the past. Modern technology and advanced automation make everything more manageable now than ever before. Leveraging something as simple as a WooCommerce Xero integration, social media campaign, or reliable payment processors could ensure your eCommerce store grows from side hustle to a full-time career.
We have put together a few business tips for helping you along your WooCommerce online store journey.
1 – Always Know Where Your Money is Going
Bookkeeping is essential to business growth. It is the easiest way to measure the cash moving in and out of your business from sales and expenses. The cash flow of your eCommerce business isn’t something you can afford to ignore. A healthy balance of incoming and outgoing money is necessary for your business to stay afloat. No matter what kind of products you sell, where you live, or how much experience you have in eCommerce, an organized cash flow system keeps your business running smoothly and opens up growth opportunities. Using Xero accounting cloud software is an excellent first step in this direction.
2 – Create a Centralized Location for Your Payment Processors
Integrating all your payment processors into one accounting platform like Xero is essential. This will help you create a unified view of revenue and expenses across all channels so that you can easily reconcile the numbers in real-time.
Xero with WooCommerce is a popular combination for eCommerce businesses because it is cloud-based, easy to use, and offers many features that make managing finances a simple task.
3 – Automate Everything!
There are a few ways you can automate your eCommerce business cash flow. One of the easiest is to set up recurring payments for your customers. It’s not just about subscription services, either. You can also set up automatic billing, automatic payments, and even automate bank transfers if you have a system in place to make that happen. You want to have your business operating while you sleep, off visiting friends, enjoying a family holiday, or just lounging around when you want a break.
4 – Leverage Software for Different Currencies & Taxes
If you’re selling products in multiple countries, currencies, and/or regions, keeping track of all the taxes you owe can be tricky. Depending on where your business is based, there may be different taxes for each item sold.
To avoid confusion later on when filing taxes and keeping everything organized, it’s important to use software that can handle multiple currencies and locations. You should learn how to integrate Xero with WooCommerce using a simplified plugin like that from OPMC. Having these powerful tools sync removes the need to hire someone to manually enter in customer data, recent sales, expenses, and other transactions.
5 – Review Financial Reports
Financial reports are the best way to keep track of your business’s current status. When you don’t have the time or expertise to produce them, you can use a tool like Xero to quickly analyze a balance sheet, cash flow statement, inventory, and more. You want to see quick, top-down views of your business that show the health and growth potential of different decision-making.
6 – Coordinate Your Expenses in Income Timing
To make sure your business cash flow runs smoothly, you must get paid as soon as possible. That means collecting upfront payments from customers put on a schedule for deposit into your business account in time for your recurring and unexpected expenses. You do not want to be without the funds to pay employees or the electric bill.
7 – Don’t Forget Affordable Social Media Promotions
Promotions are a great way to increase sales in the short term. You can run an offer on a specific product or bundle of products or do something like a flash sale where you slash prices for a set amount of time. The main thing to remember is that promotions are temporary and should only be used when needed. Don’t use them as your default method for increasing cash flow. As with most things in life, moderation is key.
8 – Add Padding to Your Calculations
Planning for the unexpected is never easy because you do not know what could happen. However, if you add an extra 10-20% to your expected expenses, you create room in case sales are low or something else causes money troubles. The goal is to keep the cash flow moving at all times, ensuring you are not stuck in a rough situation.
9 – Sync Everything with our Xero WooCommerce Integration Plugin
There is a ton of information to manage when running an eCommerce business. Our bespoke Xero WooCommerce integration plugin provides a bridge between the two platforms, so all information is recorded correctly.
This cuts down on the time and money you could spend manually entering all this data. It allows you to generate the reports you need with real-time and accurate data, so your decision-making is that much easier. You can download this powerful plugin or learn more about the many benefits at OPMC.
Wrapping it Up
Small businesses, including eCommerce storefronts, are always searching for cash flow. It’s what keeps them afloat and pushing forward. It’s the lifeblood of your business. So you need to know how much you have coming in versus going out if you want to maintain stability and growth over the long term.
Following the tips we suggest will help streamline the learning process of growing your business. Take every day one step at a time and keep a finger on the pulse of your cash flow by integrating Xero with WooCommerce using our plugin and you should be more than prepared for the future!