eCommerce success relies on structured bookkeeping processes. For businesses that trade in more than one territory, managing and tracking multiple sales taxes can be challenging. Indeed, the most common challenges in eCommerce accounting are inventory & cash management. In this guide we discuss four issues facing Accountants in eCommerce.

Reporting

In order to attract potential investors, or apply for funding from your bank, it is crucial to maintain a strong balance sheet. Similarly, it is just as important to keep accurate cash flow reports and income statements. Due to the volume and size of eCommerce inventory and the flow thereof, these reports become extremely important to maintaining an accurate picture of how your eCommerce business is actually performing.

By automating key processes, it is easier to manage the multiple variables and you enjoy a real-time view of KPIs.

Subscription Fees

Most eCommerce stores are likely to use multiple services within their operations. From your payment gateways, eCommerce platforms & accounting licenses, tracking and accounting for these fees can be challenging. These fees have to be recorded separately rather than to be included as part of the gross sales amount as this may cause imbalances on your P&L.

By investing in a fully integrated solution that makes subscription management simpler, you can easily keep accurate records of these fees. Which brings us to the third, and most pressing issue facing accountants in eCommerce.

Complete & Integrated Software

All businesses rely on accurate data for timely and strategic business decision-making. It is essential to ensure you employ systems that are conducive to maintaining the integrity of your data. Manual entries are prone to human errors. This is why you need to implement the right processes to facilitate your data recording.

If you are processing hundreds, perhaps even thousands, of transactions daily, an integrated cloud solution is your best option. Not only does it allow you to conduct your business from anywhere, any time, using any device. But, also leverages the power of automation and complete connectivity of your ERP and eCommerce storefront.

Accounting for Refunds

Dealing with e-commerce refunds is challenging for two reasons: the effect on the inventory (a double expense should be avoided at all costs, and timely write-offs are a must), as well as the bookkeeping consequences. As you can see, it’s clear that accountants dealing with e-commerce will use cloud software – but surprisingly not every cloud software is able to properly sort out the refunds.  

e-commerce accounting for returns presents challenges like having to decide when to write off the inventory and ensuring that the inventory doesn’t get expensed twice. Returns can complicate the accounting for your inventory and if you aren’t careful they can make your books worthless. 

This is why Brilliant Link developed a solution to bridge the gap between accounting systems and eCommerce storefronts. A tool that allow you to streamline your eCommerce accounting and inventory management.