Whatever your business plans were at the start of this year, your online presence is likely to have reached the top of your priority list at some point in 2020.
With shops forced to shut and social distancing required in those that are still open, retailers have had little choice but to make up the shortfall through their websites.

Those without an existing system for online sales had to work quickly to put one in place, from simple stores on e-commerce marketplaces to fully-functioning websites and delivery systems.

Online sales made up around a third of all retail spending in May, according to data from the ONS, and while this figure declined slightly as restrictions eased, it remained at 27.5% in September – well above its pre-lockdown level of 20.1% in February.

And with England in a second national lockdown and restrictions still in place across the UK, it’s looking likely that online sales could grow again as people look for alternative Christmas shopping options.

Here are our top tips for making your business’s transition to online selling as smooth as possible.

Go back to your business plan

A website that started as an emergency solution to reach customers as the pandemic hit might now have become a key part of your business model – so it’s important to think about how it will fit into your plans for the future.

Will you continue to operate the online store alongside your brick-and-mortar premises, or are you planning to switch over to completely digital sales? Are there new markets you can reach online that you couldn’t before?

It’s important to think carefully about the new opportunities, as well as the challenges, that selling online could create.

While you could take advantage of the lower running costs compared to a physical store, you’ll need to make sure this doesn’t come at the sacrifice of customer experience and trust.

And if you decide to start exporting through your website, you’ll need to make sure you’re familiar with the rules and regulations involved in trading.

VAT on online sales

If you’re a UK-based business selling goods within the UK, your VAT affairs should be no more complicated online than they were offline.

You’ll still need to register for VAT if you exceed the £85,000 threshold, and record and report the tax through digital systems that comply with Making Tax Digital rules.

If you’re selling to customers outside of the UK, things can get a little more complicated. For countries in the EU, you’ll need to check whether or not the value of goods you sell exceed the distance selling threshold.

In most countries, the threshold is €35,000, but it can vary. You can find a full list of distance selling thresholds here.

If you go over the threshold, you’ll need to register for VAT in that country.

Talk to us for more detailed guidance on VAT.

Move your accounts online

When you’re selling online, it makes sense to get your accounting system online too.

Cloud accounting software like Xero is the perfect solution for retail and ecommerce businesses to monitor their performance and keep vital records with minimal effort.

Instead of having to copy data across various spreadsheets, you can rely on Xero to automatically pull through the right information from your payment system and bank accounts.

It also integrates with various different software packages so you can manage your business in an efficient, joined-up way.

We’ve listed eight of our favourite Xero add-on apps here, and explained how each one can help you to run your business.

If you’re selling on Amazon, Shopify or eBay, you can also use tools like A2X to automate your accounting system.

Talk to us about running your business finances online.