CASE STUDY – ONLINE BUSINESS (ECommerce)
An online retailer who sells digital services and products online through multiple channels – YouTube, Shopify, eBay, and Amazon.
The bookkeeper was unable to keep up the with growing volume of transactions that needed to be entered as she was only in their office 2 days a week. They typically would receive a set of financial statements 3-4 months after the month was over. The business owners also did not know which channel was most effective for them, or where they should focus their resources for future growth.
Rather than manually entering every transaction as the bookkeeper previously was, they tried entering summary amounts from various reports generated from the channels. They had expected that they would get the financial reports faster and be able to react faster to the areas that were growing.
What they instead found was that since the transactions were no longer going in individually, clearing accounts were set up for the various channels and payment methods. The biggest challenge was that these clearing accounts never cleared! Every month the balances would instead increase, and they lost faith that their financial performance was being reflected correctly.
Step one was to conduct an in-depth assessment of their business. We needed to better understand the current workflows and what the various moving parts were in their multi-channel e-Commerce business. Once the assessment was complete, we converted them to QuickBooks Online (QBO). We could then begin to implement connections between the multiple channels and QBO, so that the data didn’t require manual entry into their accounting software. The clearing accounts were still necessary for the payment accounts. However, it became a monthly reconciled account to ensure that the balance was verifiable. And, we could easily identify which payments were outstanding to be received in the following month. We also mapped the various channels to different revenue accounts on their financial reports. This made it easier to determine which channels were generating the greatest return.
The integration of the various channels allowed for the business owners to log into one single platform from any location to better understand their business and the various revenue streams. The clearing account was no longer a source of concern as the balance was no longer increasing every month except in response to growing sales. Our client was able to determine which channel was producing the strongest results and where to focus their energy and resources.
The unexpected result for them was also having a clear inventory count of the products that they had remaining so that they were not committing delivery dates for products they sold on another channel. Our team working 100% virtually also provided them with two benefits – It removed their need to have a physical office space for the bookkeeper which allowed them to convert the office to additional inventory storage space. It also allowed us to provide them with better support as we were available when they needed us, not just on designated days of the week.
If you are running a high volume e-Commerce business and struggling to find someone who understands the workflows or the multiple revenue channels, give us a call and let us help. You can learn more about our Bookkeeping services for e-Commerce here.