Money management is an essential part of creating a viable eCommerce business.Unfortunately, many entrepreneurs lack the expertise to manage the books effectively and efficiently. In fact, according to a U.S. Bank study, 82 percent of the time, poor cash flow management contributes to the failure of a small business. Automation reduces the number of manual processes in your business operations, therefore reducing the risk of human error while saving you time and stress. The following are five ways automating your accounting will benefit your eCommerce business.
Due to the complexity of the sales tax landscape, manually determining what you owe can be a difficult task. Connecting your sales channels and accounting system will allow for all transactional data, including the tax rates of each jurisdiction where you sell, to be automatically captured and posted. An automated system ensures accuracy and timeliness come tax season.
Most entrepreneurs want to grow their business, but having a clear understanding of your cash position is essential to growing in a sustainable and efficient way.Bank statements only provide a limited view of your cash position because they don’t factor in pending payouts, processing returns and varying fees.
Cash flow automation tracks AP and AR activities in real-time, making it easier for you to see exactly where your spending is going and why your bank statement looks the way it does.
Building a sustainable, profitable, and scalable eCommerce business requires finding a balance between supply and demand. Automating your workflows will allow you to accurately track incoming vendor shipments and outgoing customer orders across multiple sales channels while simultaneously tracking fulfillment costs. Automation provides you with a complete financial picture of how your inventory and fulfillment is impacting your profitability.
The long-term success of a business is largely dependent on profitability. In eCommerce, sales channels don’t provide line-by-line details of purchasing transactions and spending. Automated accounting combines data from different sources, including fixed expenses like rent and payroll to provide total visibility on accounts payable. Automation empowers decision-making by enabling you to accurately see your profit margins and adjust spending accordingly.
In a similar vein, automated accounting provides you with a complete and precise overview of your data. Access to centralized data will save you time and reduce the risk of potential errors in the month-end reconciliation process, which is important for stakeholders, banks, and investors.
Accounting plays an important role in the day-to-day operations and long-term growth of a company. Automating your eCommerce accounting process will save you from unnecessary stress and provide you with more time and data to use for planning the future of your company.
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