Ecommerce business has become a favorite of entrepreneurs because of its low barrier of entry and the ease of networking. It is easy to sell different types of products already famous on sites like Flipkart or Amazon. Though the difficulty comes in running the ecommerce online business operations, accounting has been one of those areas with unique challenges.
With manual accounting practices like excel spreadsheets, you cannot sustain for a longer period of time, especially when you consider scaling your business. Ecommerce businesses require automation for their administrative and accounting purposes for easy operations.
To understand the details, the article covers major six challenges faced by the small and medium ecommerce businesses, and learn how to overcome them with the best ecommerce accounting software.
It can get tricky to manage inventory along with the new products as the sales channels for them complicate it further.
Tracking back to the warehouse manually to the fulfillment spot requires a lot of deployment of human resources, which gets redundant and costly with the returns arriving back and sales.
But with the ecommerce accounting software, the complete inventory management gets automated with notifying for every in-and-out of the warehouse, adjusting the calculations automatically for real-time insights of the stock. Such a system provides the most accurate data to keep the financials up-to-date.
Sales Tax Liability
With the changing taxation system for the new ecommerce business landscape, it is not easy to do it on your own.
Remitting taxes for every sale, calculating sales tax, inter and intra-state taxes, national freight taxes, etc. figures need to be monitored continuously, which is impossible without the ecommerce accounting software.
The software technology provides a real-time tax tracking system, which keeps your budget and investment allocation in alignment with the location specific regulations. This system allows you to focus on strategizing for your business investment avenues, and help improve the overall business productivity.
Seller Fee Monitoring
With the big ecommerce platforms dominating the markets, you’re charged different fees which are not easy to track. For different purposes like advertising, fulfilling, transactions, etc. there are different charges to be laid on.
The ecommerce accounting software technology eases this process by providing tracking of seller fee with different alternative options for the cheapest and best service provided by different platforms. Using automation for such tricky calculations is more sustainable for your business scaling purposes.
Another bug trouble with the ecommerce accounting is tracking the return orders. Though, a customer friendly return policy gets high conversion rates in the ecommerce market, but it puts a havoc on the accounting process. The refund is issued to the customers within a few days, and the product needs to be re-added to the inventory within that period.
The easy way to handle the returns is through the ecommerce accounting software, which automatically detects the product’s history and adds it back with the accurate calculations in the accounts sheet.
Manual Data Entry
With different items/ accounts metrics to track for every sale: seller fees, local sales tax, shipping and freight costs, and more, doing this manually is impossible for the growth of an ecommerce business.
With the ecommerce accounting software, the data is entered automatically with every transaction made in the system. It derives every information from the invoices made, and automatically calculates and adds the data in the respective fields of the accounts sheet.
This way, you can easily tackle the human error and manual data entry challenge of accounting, and provide seamless ecommerce accounting management.
Though ecommerce accounting may seem complex and full of challenges, with the ecommerce accounting software it gets seamless and sustainable. It automates the core accounting processes, enhances the taxing calculations, provides real-time inventory management, handles the order returns virtually, and removes all the errors and resources wasted with manual accounting.