Ecommerce & Accounting. Scott We Speak Ecommerce

Transcription

1 Ecommerce & Accounting Scott We Speak Ecommerce

2 Agenda Ecommerce Businesses Ecommerce Overview Ecommerce Accounting Ecommerce Technology

3 Ecommerce Businesses Lots of variety

4 Ecommerce Business Types Types Brand Wholesale Retail arbitrage Channels Single vs. multiple channels Marketplace or shopping carts B2C, B2B, or both Retail, popup stores Fulfillment Self-fulfilled 3PL warehouse Amazon FBA Drop shipping US only US expanding internationally International expanding into the US

5 Ecommerce Overview The wild world of ecommerce

6 Marketplaces

7 Shopping Carts And many more

8 Merchant Basics How ecommerce businesses collect money

9 Ecommerce Merchant Basics Amazon provides the merchant services for sellers (pro) All payments managed by Amazon (with lots and lots of fees) Main payment methods Direct merchant relationship (usually Authorize.net) PayPal Shopify Payments (powered by Stripe) Stripe Square Amazon Payments Deposits are batched daily Mastercard, Visa, Discover in a deposit American Express in another deposit

10 Ecommerce Accounting What is ecommerce accounting..

11 Ecommerce Accounting Tasks Accounting Basics Recording Income Recording Inventory and COGS Reporting

12 Recording Income Recommendation Summarize as much data as possible Daily deposits per channel per payment type DO NOT try to push in every transaction and apply each payment B2B/B2C/Direct ecommerce invoices Sales, Shipping income, Returns, Discounts, Sales Tax Full details in the accounting system, apply payments Managing clearing accounts & channel / merchant fees Recording sales for each channel by Tracking Category/Class Managing integrations and data pushed into accounting platform Watch out for too much data, wrong data, random manual journals

13 Inventory Value Inventory Count, Value for each warehouse Amazon FBA In transit inventory Track returns, demos, samples, disposals Automated vs. manual calculation NOTE Check the inventory on the last day of the month at midnight, most systems don t store a historical amount NOTE Make sure there is a cost for every item

14 Cost of Goods Sold COGS Get access to every order Have a cost for every item Watch out for returns, voided orders, etc. Dates & statuses Ship date (is it up to date?) Have clients update all order statuses at the end of the month Recommendation Don t try to do COGS per order posting to the accounting system. If there are any missing costs then COGS is wrong, if there are any issues, then COGS is wrong. Complete weekly or monthly Do trust the cloud inventory solutions (sorry) None of the cloud inventory solutions have a month end summary / reconciliation process for COGS. Yes, you can get month end moves/adds/changes for some systems.

15 Reporting Financials Profit & Loss Statement, Balance Sheet, by channel Expenses overview Gross/Net Margin per channel Cash Flow Projection Ecommerce analytics cloud inventory Profitability by SKU Sales velocity Meet and review financials with client regularly

16 Ecommerce Accounting Workflow Daily Manage bills, PO Address client questions Accounting basics Weekly Record Income Projects reconciling accounts, clearing accounts Monthly Recording Inventory, COGS Sales Tax Month End Close Process

17 Ecommerce Accounting Tips Do not record every transaction in the accounting platform Build processes for daily, weekly, monthly, quarterly tasks Use a password vault LastPass, etc DO NOT use the clients own Amazon Admin account Setup 2-Factor authentication Make time to manage all of the data Watch out for duplicate data Every order in the cloud inventory and sales tax management system Automate where possible but don t trust the integrations until the provide value and efficiency Break the integrations and build a manual process when the integrations screw up the accounting.

18 Ecommerce Technology Impossible without the right cloud technology

19 Ecommerce Cloud Accounting Example Cloud Inventory Sales Tax

20 Sales Tax A reality and cost of doing business

21 Sales Tax Management Critical for ALL ecommerce businesses Amazon FBA generates sales tax nexus in 20+ states Services Analysis / Nexus Study (attend Diane Yetter s session) License registration (outsource) Configuring sales tax collection process Filing and remitting Voluntary Disclosure Agreement (VDA) Exemption certificate management Audit support Technology

22 Sales Tax Recommendation Every Order Imported and verified in the sales tax solution Track total sales tax liability on the Balance Sheet (not per state) Reconcile, adjust sales tax liability monthly (always an adjustment) Partner with a sales tax (SALT) expert for Nexus Studies and Audit Support Decide how to process sales tax returns Understand nexus It is better to collect too much sales tax than too little Note: it is almost impossible to set the sales tax collection to work properly even using a sales tax solution (Taxify, TaxJar, Avalara/Trustfile, Vertex SMB) and not all shopping carts support 3 rd party connections.

23 Cloud Inventory

24 Back Office Technology Cloud Inventory Inventory is critical Managing ecommerce business Providing accurate financials Primary data flow to the accounting platform Requirements Cloud based inventory Purchase Order functionality Integration into marketplace / shopping cart Accounting integration (or clean export)*

25 Cloud Inventory Options Amazon / Multichannel Manufacturing / ERP B2B / Wholesale Warehouse management / Shipping Product listing International Additional

26 Best Practices Get access to all platforms, unique logins Use a password vault, Focus on a few technical solutions Provide feedback to the vendors, push for new features Be consistent on the backend tools to support a range of clients. Clearly define the roles and responsibilities with clients Clients manage inventory, purchase orders, enter costs, shopping cart Accountants manage the finances, record payments, manage GL, AP

27 Resources Ecommerce Accounting xero-for-your-ecommerce-clients/ Cloud Inventory Blogs

28 Q&A Any questions