With a drop shipping business, you set-up a digital storefront, process orders, and have a supplier ship the goods directly to your customers. With a drop shipping business, you don't need to manage a physical inventory; however, you do have to keep on top of your booking right from the start.
#1 Keep Track of All Expenses
First, you need to keep track of all of your expenses. With a digital business, there is a high likelihood that a lot of your receipts are digital. You still need to make sure you keep track of those receipts.
For every digital transaction, download the receipt and put the receipts in organized folders. You may have one folder for each business that you do regular transactions with. Create folders for one-time expenses as well. Downloading and storing the receipts, or taking screenshots of the recipes and saving them, will help you with your bookkeeping and ensure that you have access to the receipts for the right amount of time.
#2 Check Your Cash Flow
At least once a week, you should check your cash flow. Sit down and make sure you have a clear picture of how much money you brought in over the past week, and what you paid for all of your expense. You can set the day of the week you do this task, but make it the same day each week and create a statement that shows your cash flow for the week. You want to be able to see how much you spent in a given week, and how much you are making in a given week.
#3 Use Your Cash Flow Reports
Over time, this weekly cash flow reports will allow you to figure out quickly your cash flow for a particular month, quarter, and year. Tracking your cash flow on a weekly basis will make it easier for you to monitor your cash flow over time.
Keeping track of your cash flow on a weekly basis will also allow you to make smart choices on what apps you should pay to add to your website. It will also allow you to determine how much you should spend on your upcoming advertising campaigns and to determine if your advertising campaigns are working. The drop shipping business landscape can change quickly, and creating weekly cash flow reports will allow you to make quick decisions and business changes.
As you start your drop shipping business, make sure you save all receipts. Make sure you create weekly cash flow reports. These reports will allow you to make monthly, quarterly, and yearly reports. These reports will also help you make smart business decisions.