Is it tough managing your cash flow for your ecommerce store?

Does it seem like there are so many things to track because everything is virtual?

Why should you read this article?

  • Why managing your accounts are so important in the ecommerce space
  • Processing payment and ensuring money goes into your bank account
  • Managing the eternal problem of cash flow
  • How to pay for and finance when paying for your future inventory
  • When it is time to hire a CPA, bookkeeper for your business

Why managing your accounts are so important in the ecommerce space

Like every business, your ecommerce business has many moving parts with thousands of customers, invoices and payments to your suppliers, staff, software, maybe overhead and other things.

The only difference is that – everything is virtual this time.

And hence it may be harder to track your invoices and expenses, money in and money out.

By consistently doing your accounts, you will have a clear understanding of your daily expenses and give you a snapshot of your business and the levers you need to pull to drive profitability.

Furthermore, by doing your accounts you won’t be scrambling to prepare your tax returns once the tax season comes around to filling your taxes.

Processing payment and ensuring money goes into your bank account

Just like the banks of the 20th century, the companies who run the internet are the big giant payment processors that control whether you can accept payment or not. Hence its best to not mess around with these big dogs as they ensure that you get paid.

I personally have friends who got their entire accounts on money on hold just because there was a chargeback or a customer filed a complaint of non legitimate charge when the payment was charged to their card.

This causes immense cash flow problems and may even bankrupt your business.

A few payment processors that you want to be familiar with include:


Stripe has been a fan favorite of mine just because they are very easy to use and their UI is very sleek and professional looking. If you are running the major ecommerce sites, Stripe is very democratic in how they support small businesses, so if you are on any major platform – Shopify, magento, woocommerce, webflow you will definitely be able to use it.

Just a tip:

If you are a new business and are using stripe, you might want to ‘season’ the account by having a minimal number of orders come in at 1 time first so that Stripe can recognise you as a merchant that is trustworthy and will increase your ‘account reputation’ as you ramp up the volume of transactions.

As the merchant using Stripe, Stripe charges a 2.9% + $0.3 for every transaction that you have at your store.


Paypl according to the site charges 2.9% + $0.3 per transaction as well, however if you are doing cross border ecommerce transactions where 2 parties are located in different countries – that fee goes up to 4.4% + a fixed fee, which varies according to the country.

Hence this becomes problematic for many sellers who are trying to sell in the big ecommerce markets of US, UK, Australia and Canada.

A note about paypal as well – in my experience paypal is even more strict than stripe when it comes to refunds, chargebacks and false charge claims that your customers will give and I have heard of some occurrences where they hold money from 90-180 days if you don’t play by the rules.


Authorize.net is a 3rd party payment processor that syncs with the shopify ecosystem as well and is widely accepted for shopify merchants.

There is more documentation on how to actually integrate authorize with shopify over here:


Because authorize.net is owned by VISA, it is a very safe alternative to paypal and stripe, however because shopify charges extra for NOT using shopify payments, you may be charged an extra % fee for using a 3rd party processor.

Similarly, authorize charges the same fee: 2.9% + $0.3

Managing the eternal problem of cash flow

The way most startups die is because of a cash flow issue. When there is a delay on when your payment processor disperses your money – when you need to buy future inventory and you know sales are aplenty but don’t have enough cash sitting in the bank – that’s where you feel the problem of cash flow coming in.

So how do you negate or at least try to eliminate this issue?
For your sales, look at the past sales figures in the past few months to weeks and estimate how many sales you are going to make. For example, in Q4 expect to be doing at least 40-60% more in sales figures then per normal.

You should also be forecasting in an excel spreadsheet your best case, worst case and normal scenarios, for example your worst case scenario is that you cannot sell your product and have a -20% dip in sales. Put all of these in a spreadsheets so you can get a sense of your financial projections.

How to pay for and finance when paying for your future inventory

If your sales are doing well and you’re expected to be increasing your business by 3-4x in the next coming months, you will have to be paying for stock upfront and that requires cash upfront.

If you don’t have the cash (you probably don’t), you need to be financing the stock with debt. If you know your sales will increase in the future, this is the risk you need to take as an ecommerce entrepreneur.

So where are you going to get the money?

You take out a term loan.

A term loan is a small loan ranging from $10k to $1m that you can borrow in as little as 2 days time. You can show your sales numbers to an online lender and you can get access to the capital in a relatively quick time. However, keep in mind that you need to have past history of your sales already and that you need to submit a business plan to the online lender for them to approve the credit that you need.

Shopify themselves provide capital for your business financing, and because they have direct access to your sales numbers, they can help as well:

When is it time to hire a CPA, bookkeeper for your business?

You should hire a CPA when you start to have sales coming in – and that your time should not be spent counting P&L statements, and gathering together invoices.

When you start to get cash flow in and start to grow the business – your time as the CEO or founder should be spent thinking of things to grow the business.

That’s exactly when you should consider hiring someone to do your books.

At that point your time should be spent on:
– thinking about new products to sell to grow the revenue

  • How to use marketing to grow your revenue
  • How to ensure everybody in your team gets paid

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