By now we know that managing revenue, liabilities, and expenses are essential to building a successful ecommerce store. But in today’s highly competitive industry, failing to keep track of all your assets can threaten both the growth and the survival of your business.
Online sellers should take a close (and constant) look and see which assets are most important to their business at any given time. Here we’ll go over fixed, digital, physical, and monetary assets – the four main asset types that ecommerce companies should be aware of.
Types of Assets
Fixed assets are relevant for companies with an office, warehouse, and employees. Here we can include property, office space and equipment – that is if your company actually owns them. If rented or leased, they’re registered under liabilities in your chart of accounts.
To any business, monetary assets basically mean cash at hand – funds that you can readily use to pay suppliers or take care of day-to-day expenses.
Whether you’re opening up shop, testing the waters, or just selling some stuff you have lying around the house, you don’t need a business checking account for making and receiving payments. But when the orders start rolling in and you begin to move some serious merchandise, it’s important to keep your business and private spending separate. This helps you keep your taxes in order and avoid trouble with the IRS down the line. In your books you should have an Allowance for Doubtful Accounts section, just in case some customers fail to honor payments. This will help project your cash flow and adjust the volume of cash you keep on hand to avoid overdraft fees.
If you have others working for you as employees, it might also be a good idea to have a checking account just for your payroll. While you’ll most likely have additional fees to pay, financial accounting – especially when it comes to payroll tax – will be a lot less confusing.
A digital asset is something almost all of us have. They can be files, documents, recordings, videos, or basically anything that can be stored digitally on a computer, hard drive, databases, or on the cloud. As long as they provide value to your company, they can be labeled as assets. Their worth depends on how much they cost to create in terms of time and money, and how useful they are moving forward.
Management of digital assets can be done manually, but with the right digital asset management tools (DAM), documents like invoices and purchase orders can be stored and organized with easy access. DAM software also reduces the risk of these assets being lost, damaged or filed in the wrong place. As your inventory increases, this is an option that you should consider.
Physical assets are tangible items that have value to you, the seller. Physical assets can be products that are bought and sold, or material property like desks and computers that are used to run your business. Inventory is the most important concept when it comes to physical assets in ecommerce. Your inventory is simply the lineup of goods that you sell or have listed for sale online.
Depending on the nature of your inventory, there’s a risk of depreciation if your goods aren’t sold in time. This is definitely the case if you deal with plants, food, or any other perishable products.
Errors in your inventory listings can wreak havoc in order processing, leading to customers getting the wrong products or receiving them late. Even if what you’re selling is more durable, knowing the order of which products should be shipped first can help you avoid potential returns and refunds, making a big difference in your bottom line.
If you’re wary of maintaining a large inventory in your own warehouse, dropshipping could be a great solution for you. You’ll never take possession of or even see the product that customers are buying from your store, and you only pay suppliers once the goods have already been sold.
Optimized Ecommerce Asset Management
Whether you dropship or keep your own inventory on hand, an automated and efficient inventory system will help make your life easier and hassle free. In whichever online marketplace you operate, ecomdash can help track and manage your biggest assets while avoiding the pitfalls that many online sellers come up against. Start your free 15 day trial today!