Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
It's not uncommon for businesses to find themselves with many merchant accounts, different online marketplaces, and more than one brand under their belt. So if your ecommerce business is growing, consider the benefits of the multichannel strategy.
However, it takes more than just creating an account on another platform. There are many elements to think about, and one of the most crucial points is accounting. Unfortunately, you're not familiar with the ropes of multichannel accounting, so you're worried about handling the system's complexities.
If this sounds like your company, then it may be time to think about how multichannel marketing affects accounting and what management options are available. This article will explore multichannel ecommerce accounting and advise what ecommerce accounting services might work best for you.
Opportunities and Challenges: The Impact of Multichannel Ecommerce in Accounting
As more companies begin to operate online, the competition is getting bigger and more difficult by the day. It's especially hard for small businesses or those who aren't well-established as they have to start from scratch. However, multichannel ecommerce opens new marketing opportunities for all businesses.
You have more marketing avenues, expanding your market presence and the potential to grow a large customer base. These days, you get loyal customers through social engagement and providing a seamless customer experience.
But as good as it sounds, new opportunities also bring new challenges. The biggest challenges of multichannel ecommerce that affect accounting are:
- Tracking multiple sales
- Managing inventory across channels
- Managing different costs and required fees from all platforms
- Handling multiple accounts, foreign currencies, and tax compliance
- Generating accurate financial reports
- Forming financial management strategies
- Financial data access and security
- Time management (if you’re not opting for ecommerce bookkeeping or accounting services to handle these tasks)
Because of these challenges, there's a great need for effective multichannel ecommerce accounting. You have to build a seamless system that makes work less overwhelming, more manageable, and most importantly, accurate and promotes business growth.
Other Challenges of Multichannel Ecommerce
Accounting is just one of the affected ecommerce aspects brought by the multichannel approach. Here are more factors crucial to your business.
Ecommerce platforms vary in structure, and it can be difficult to retain the same impression of your brand. This is why you need to create a solid brand profile before using multiple channels, such as branding tone. Of course, you should follow the channel's guidelines, but you also need consistency in how you present your brand.
Your target market may differ from one ecommerce platform to another. The challenging part here is to provide the same level of support and attention not to lose customers. This means examining the customer journey in detail, hearing their feedback, and providing the best user experience to fulfill their satisfaction.
How to Manage Multichannel Ecommerce Accounting
Whether you're selling on Amazon, Shopify, and/or other ecommerce marketplaces, stepping on multiple channels can be challenging. To handle the complexities, you need proper understanding and the right accounting solutions. We've listed down everything you need to start slowly but surely with multichannel accounting.
Integrate Management Software
Technology is key to handling large amounts of financial data. Ecommerce accounting needs automated management software to manage inventory, data access, and report generation. Some of the top accounting software include QuickBooks, A2X, Sage, and Freshbooks. They can help you stay on top of things and have accurate bases for compliance and analysis.
Here are more specific features you might want to consider when choosing accounting and inventory tools or programs.
- Allows synchronization of cross-channel data
- Integrates with an inventory management tool or a shipping management program
- A cloud-based feature so that you can access data anytime, anywhere, and on all devices
- Allows filters on search options to get the data you need quickly
Monitor Financial Progress and Changes Regularly
Things don't stay the same in the ecommerce marketplace. There could be sudden changes with shipping costs or tax rates, and you should be aware of that to comply accurately. Always check your financial data to see if you're lacking at some points or going the wrong direction.
Be Prepared to Deal With Returns
Product returns are accounting nightmares. They're inevitable and require you to keep adjusting your financial records. Moreover, they can hurt your opportunities for customer loyalty. However, you can minimize the risk by ensuring proper shipping procedures and creating an effective return policy.
Don't Wait for Problems, Solve Them
Familiarize yourself with the platforms and think of all possible accounting issues that might occur. Then, research similar cases and seek ways to prevent them. It's always better to be fully prepared than settle for less. Before things go the wrong way or get worse, implement a solution and eliminate the risks.
Hire for Help
Multichannel accounting alone can be very time-consuming; what more if you need to work on other online business aspects? You won't have enough time to go over them precisely. In that case, seek help from a bookkeeper and accountant. They can take charge of all the complex setups and explain difficult matters to you in a way you can easily understand.
Stay Financially Accurate From One Platform to Another With Unloop
The multichannel approach in ecommerce affects how you handle accounting. It adds more data variety and quantity; hence, it can be complicated to manage. Instead of shouldering this tricky system on your own, consider Unloop's multichannel ecommerce accounting services.
From inventory tracking to sales tax management, we provide full support on your bookkeeping and accounting obligations. We ensure they're accurate and in compliance with the requirements. If you're a seller in the USA or Canada, reach out to us today to help you with your ecommerce business needs.
Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.