How you will maintain accounts in online business

Prof. Debayan Ray, Assistant Professor – Placement, IQ City United World School of Business, Kolkata
Maintaining accounts is the most difficult part in any business and most important also as this will give you ultimately the proper idea about the current financial position of a business and also indicate the growth of the business. Now according to one research carried out by ONPAY more than 40% people maintain their records by themselves which is good but it is only possible when you are in starting position otherwise when your business will grow up its next to impossible to do everything by yourself. But we know that when we start that time there would be lower number of transactions happen and when that business will grow up then gradually maintain records become very difficult and also become more complicated. However, the fact is if you failed to maintain and record all the transactions properly then you will not get the proper knowledge about the financial position of your business. Proper accounting is very much important in type of business organization. Non commerce background students must understand the difference between simply keeping record of transaction which is called book keeping and proper accounting process. Bookkeeping will help you to categorize all the transactions, management of payroll, receivable and payable management whereas proper accounting will help you to conduct a proper planning, analysis, report preparation along with forecasting for the future by using financial knowledge. Now if any startups maintain only one accounting system out of two popular accounting system such as cash base accounting and accrual base accounting then it would be much easier for them to maintain record. Cash base accounting is also possible for small startup stage but very difficult for well established ecommerce business organization. Comparatively accrual method is difficult than cash basis as in cash basis whatever you have received and paid in cash you have to record but in other case you have to think and record about future transaction which indicate all of those money which you have not received yet and all areas of expenditures but accrual basis of accounting will give you more realistic view than cash basis accounting. Now there is a possibility that in accrual accounting method can create more lucrative image of that organization than they actually are. Three things are most important in ecommerce business which include tax identity number for business which organization can use for all the transaction. Second is a separate bank account number as we all know the business entity concept and according to that business organization must have a separate identity. And last but not the least accounting software for recording daily transaction. There are few important jobs in ecommerce accounting when a businessman start the business among which first is categorization of all transaction though now a days almost all software automatically categorized all the transaction but still manual review is important on a certain interval, second is planning and preparing and maintaining a proper master budget for business which include all departments budgets like purchase budget sales budget cash budget, cash inflow and outflow budget etc. and here also manual checking and review is required to check whether actually all of the transactions is happening according to the plan or not, third is tax planning is also required, and last but not the least is proper evidence keeping practice is also required for each and every transaction. In this way initially a business man can keep up to date accounts which will give a true and fair view of the business to everyone.