Articles

A profit and loss statement, also known as a P&L statement or income statement, is a key financial document for ecommerce businesses. It provides a comprehensive overview of a company’s revenue and expenses over a specific period, such as a month, quarter, or year. The P&L statement is essential for tracking the financial health of […]

Gross margin is a key metric in ecommerce businesses that measures profitability. It is the percentage of profits you retain from revenue after deducting the cost of goods sold (COGS). It is calculated using the formula Gross Margin = Revenue – COGS. Gross margin rate is the gross margin expressed as a percentage of revenue.

In the world of ecommerce, managing financial transactions and maintaining accurate records is crucial for the success and growth of a business. One essential component of ecommerce accounting is the general ledger. Let’s explore what a general ledger is and why it is important for ecommerce businesses. Key Takeaways: A general ledger is a vital

Consumers spend around $500 billion shopping online each year, leading to continued e-commerce growth. Fulfillment costs are an increasingly important factor for e-commerce businesses. These costs encompass various fees associated with the fulfillment process, including setup fees, intake fees, storage fees, pick and pack fees, shipping fees, kitting fees, return fees, and account management fees.

Fixed assets are essential components of any ecommerce business, providing the foundation for long-term growth and success. In this article, I will explain what fixed assets are in the context of ecommerce and why they play a critical role in driving business operations and strategies. Fixed assets, also known as non-current assets, are tangible items

Financial statements are an essential component of evaluating the financial performance and position of an ecommerce business. In this article, I will provide a comprehensive overview of financial statements in ecommerce, their significance, and strategies to improve their accuracy and effectiveness. Key Takeaways: Financial statements provide an overview of a company’s financial performance and position.

Expenses in ecommerce refer to the various costs and fees that online businesses incur in their day-to-day operations. These expenses can include website building and hosting fees, platform payments, permits and licenses, utilities, shipping costs, returns and refunds, equipment and asset maintenance, inventory management, storage costs, marketing and advertising expenses, subscription software services, transactional costs,

In the world of ecommerce, equity financing plays a crucial role in providing businesses with the funds they need to grow and succeed. But what exactly is equity? In simple terms, equity refers to the ownership interest that individuals or entities hold in a company. When it comes to ecommerce, equity financing involves offering a

Economic Order Quantity (EOQ) is a crucial concept in inventory management that helps businesses optimize their order quantity and minimize costs. EOQ considers various factors such as demand, holding costs, and order costs to determine the most optimal order size. For ecommerce businesses, managing inventory efficiently is essential for smooth operations and customer satisfaction. By

Welcome to the world of double-entry accounting, a fundamental system that ensures financial accuracy in the realm of ecommerce. As an essential part of any accounting system, double-entry accounting, also known as double-entry bookkeeping, involves recording each financial transaction twice to maintain the balance and integrity of the business’s financial records. When a transaction occurs,

Dividends are an essential aspect of the stock market and investment income. In the realm of ecommerce, dividends are payments made by companies to their shareholders as a way to share profits. Dividends can be distributed in two forms: cash or additional shares of stock, known as a stock dividend. The amount distributed is typically

Depreciation is an essential concept in ecommerce accounting that refers to the decrease in the value of assets over time. As an online business owner, understanding depreciation is crucial for accurately assessing financial health, claiming tax deductions, and managing fixed asset accounting. Depreciation occurs because assets, such as equipment, vehicles, or technology, gradually lose value

Welcome to the world of Cost Per Acquisition (CPA) in Ecommerce. As a vital metric in digital marketing, CPA measures the cost incurred to acquire one paying customer on a campaign or channel level. Understanding CPA is crucial for businesses looking to gauge marketing success and optimize their strategies. CPA finds application in various paid

Cost of Goods Sold, or COGS, is a fundamental concept in ecommerce that measures the total cost incurred by a business to produce or acquire the products it sells. Understanding COGS is essential for pricing strategies, profitability analysis, and overall financial management. COGS includes direct expenses such as raw materials and labor directly related to

Cash flow is the lifeblood of any business, including ecommerce. It refers to the movement of money in and out of a business during a specific period. In simple terms, it is the total amount of cash that comes into and goes out of your online store. In the context of ecommerce, cash flow is