Business has never been better and you have never felt more out of control … sound familiar?
You own a business selling widgets online that has grown from your garage to a warehouse. Business is booming! Problem is … you have cobbled together a number of disparate e-commerce systems, and none of them talk to each other.
Chances are, you use Xero as your accounting platform. You have built your website with a web designer and have chosen Woo-Commerce/Shopify/Magento as your shopping cart engine. You have implemented multiple payment gateways and accept payments via Paypal, VISA, Mastercard, American Express, Afterpay and Direct Debit. You have more than one sales channel – in addition to using your website, you also sell via EBay and Amazon. You may even be selling using the EDI system in the United States or using another antiquated system that forces you to enter your invoices into another platform.
Your front end website is just beautiful, but the back end is a mess …
You have no formal system of tracking inventory – to check inventory levels and re-order points you use a combination of spreadsheets and running to the warehouse to check inventory quantities manually.
You spend all of your time re-keying information from one system to another. Your Xero file is a mess as you receive 8 to 80 deposits a day from various payment channels which don’t match to sales. And some of those payments are in USD and other foreign currencies that are converted to AUD, which makes matching payments to invoices in source currency impossible. Many payment gateways deposit funds net of merchant fees. Overseas payment providers perform end of day procedures at different times to Australia, as a result the batched sales each day do not match to payments.
You may have set up some integration between your shopping cart and Xero, but you have a strong sense the data is not being synced correctly. You have open sales which you know have been paid. The cost of sale is not being recorded at the same time as your sale, which makes your profit and loss look way too good. GST is probably wrong as you sell to both domestic and international customers.
Your accountant has absolutely no idea how to help, so they have resorted to raising manual journals at the end of each quarter to sort out GST and inventory levels. During the quarter, you are driving blind with no real time information.
We meet clients all of the time in the e-commerce industry that can relate to some if not all of the issues described in this blog.
The good news is that all of the above issues have solutions to automate your bookkeeping and inventory tracking. You need to choose your accountant very carefully as they have to understand e-commerce, perpetual inventory systems, syncs between add on solutions, foreign exchange and they must know Xero inside out. It is a very complicated industry vertical and you need the right accounting partner.
You have to be prepared to fund the cost of these automation tools to build a scalable platform so you can turn your attention to working on your business.
CloudCounting are e-commerce experts and we have partnered with other industry experts to help you automate your systems and receive meaningful, real time information from your accounting system. Feel free to touch base for a chat about your challenges!