E-Commerce Accounting
The Big Untapped Market for Accounting Firms
No one wants to take on e-commerce clients because they’re too complex, right? That’s the word on the street. The consensus or not, there are ways around the complexity, especially when you combine the power of fintech and AI automation.
And whether you know it or not, it’s highly likely that you’re already serving clients in the e-commerce market. After all, e-commerce doesn’t mean strictly digital. It’s any business that conducts business online to any degree. And that’s one big market to pass up.
Are You Accounting for E-commerce Clients?
If you look across your client base (and I highly recommend that you do), you’ll likely start to see a pattern emerge: e-commerce. While brick-and-mortar businesses still exist on a fairly large scale, many also have an online presence, selling products on their websites. Retail shops sell swag. Salons sell hair products. Even some restaurants sell merch online. This classifies them as e-commerce and brings with it some of the same pain points experienced by large-scale online companies.
My motto has long been: Leave no stone unturned. A market as large as e-commerce represents revenue, especially if you’ve figured out how to support it with automated efficiency. Start by taking inventory of your existing client base and identifying those who have an e-commerce component to their business. From there, you can make an informed decision on whether or not to expand into this vertical.
Adapting to Multi-Channel Revenue
The e-commerce industry is huge. So if you’re avoiding this market because you believe it’s too complex, you’re losing out on a lot of potential revenue. While e-commerce may have been complex in years past, advanced fintech platforms and AI automation have turned the tables, making it simpler to work out multi-channel revenue.
Before diving into this topic, it’s first important to understand a common pain point in the e-commerce industry: COGS. With any inventory-based businesses, cost of goods sold is the number one category on their financial statement. It’s what provides insight into cash flow, profitability (or lack thereof). It’s what tells them if the product, channel or business overall is profitable. And without a reliable platform in place, this information is hard to capture.
Take this example:
An inventory-based e-commerce company purchases $8k of product. There is an additional $2k for shipping and another $1k in tariffs. These represent three separate bills that come in over time. Now, consider that the $8k was used to buy 10 different products with individual SKUs. This further complicates accounting and muddies the view of cash flow.
At any point, based on when bills come in and how SKUs are handled, it could quickly swing the company from thinking they are profitable to losing money without them even knowing it. That’s a complicated and risky process.
When you remove the complexity, visibility into real-time data is possible. Leading fintech platforms are designed to handle multi-channel revenue and expenses end-to-end providing accurate views of cash flow and helping manage financials with far less risk. Top platforms handle everything including payment and ordering of products, billing and recording. And as a result, you get a streamlined workflow that provides accurate, current data.
With the steady growth of e-commerce, accountants must adapt to manage multi-channel revenue and optimize cash flow for clients. By streamlining a once complex workflow, firms have the opportunity to offer clients higher-value advisory services. And what client (and firm, for that matter) doesn’t love that?
With the right tools, accountants can turn e-commerce into an advisory powerhouse by quickly turning data into deeper insights that enhance sound, revenue-bolstering decision-making. And speaking of…
Become an Advisory Powerhouse
Advisory services are where it’s at. Clients need the added support — forecasting, cash flow analysis, deeper insights and planning. Firms can enjoy the recurring revenue and an elevated client-accountant relationship.
E-commerce has long been thought of as too complex. Too much of a hassle to support. But it’s an ever-growing industry that requires sophisticated advisory support and technology that removes the complexity and offers more visibility into financial data.
To become an advisory powerhouse, the right technology is key. Traditional inventory management systems (IMS) are complex and feature heavy, offering far more functions than most businesses need. Not to mention, they come with a high price tag. E-commerce clients require a platform that supports their core needs for procurement, payments, capital and product catalog — components that relate to one another and need to integrate seamlessly. In simplest terms, a complete operating system for consumer products businesses.
This is what Settle does for e-commerce businesses. It brings all the necessary elements together, creating a streamlined workflow that results in better data and transparency into cash flow. It does the work of a large-scale IMS but without all the added (and unneeded) bells and whistles.
Firms have the opportunity to become an advisory powerhouse in the e-commerce vertical. The combination of an advanced solution and in-house expertise makes it so.
Tap In
It’s time to stop avoiding e-commerce because you think it’s too complex, a hassle to support. The technology is available to support streamlined, automated workflows. Firms that tap into this industry will enjoy lucrative new revenue streams. AI automation and fintech-enabled growth is the future and e-commerce represents the next big untapped growth opportunity. Tap in before you get knocked out.
