The 10 Accounting Basics Every Online Retailer Should Know | Webgility

Key Takeaways:

• Master core accounting terms and GAAP principles before anything else
• Accrual accounting beats cash accounting for ecommerce businesses
• Monitor cash flow in real time, most platforms only pay out every few days
• Always know your COGS, gross margin, and break-even point
• Use accounting software to automate, reduce errors, and close books faster
  
  

Bad books don't just make tax season miserable. They make it impossible to know if your store is actually growing or just busy. And in ecommerce, where margins are thin and cash flow can be unpredictable, that distinction matters a lot.

Before you scale your ad spend, expand to a new channel, or bring on your first hire, get clear on the numbers. Not all of them. Just the right ones.

This guide covers the accounting terms that come up again and again in ecommerce, the principles behind accurate financial reporting, and 10 foundational concepts, from COGS to break-even point, that every online seller should understand before they make their next big move.