When it comes to accounting and financial management, every industry has its advantages and disadvantages. However, the e-commerce industry faces some critical challenges and most online sellers are not aware of how to deal with them.
If you work closely with the best accounting and bookkeeping firms in Dubai can help you simplify these challenges. Keep reading the blog without skipping to learn about the critical accounting challenges you must know while running an e-commerce business.
Inventory Management Can Be Complicated
When it comes to e-commerce accounting, inventory management can be quite challenging for many business owners no matter if the business is small. Things will become more complex with new sales and product channels. You might have to track the items you have and their worth.
You may also need to track the location of the items if you are dealing with multiple warehouses. Each sale will change the total quantity of the inventory and good condition arrival of returned products at the warehouse impacts the inventory.
Inventory management is the root of every cash flow of e-tailers, which can be difficult to control. You will get accurate data by using automated inventory management systems. It is the best way to keep your financials updated. Accounting firms in Dubai can assist you with all your needs to get familiar with inventory management.
You May Struggle To Track Seller Fees
Most online sellers prepare to operate through e-commerce platforms like Noon or Amazon. Many of these platforms will ask you to pay a monthly fee to sell your products on their platforms. It will be difficult for you to track other fee structures. For instance, Amazon’s fee consists of transactions, advertising, listing, and fulfilling each order.
The flat fee percentage varies on the category of the product, its weight, and its size for shipping. These expenses will be as ‘Amazone fees’ at the end of the month. Automation can be more suitable as it will reduce your work when you scale.
Transaction Volume Can Blow Up The Accounting System
Many small transactions with lots of data are also a challenge associated with the retail industry. The traditional retail selling business can check it easily with a good opinion of a sale system. That will automatically give categories to SKU-level sales data.
Your accounting system might not be good at handling a great volume of detailed transactions every month. Inefficient accounting systems will slow down as they cannot handle that big level of data. Online sellers, in these cases, have to find out an intelligent method to record their transactions.
The Trouble With The Returned Goods
E-commerce accounting becomes more grueling while dealing with returned goods. Most sellers allow their clients to return goods that are damaged, don’t fit, or are out of order. Sometimes, clients may return the item in great condition without any valid reason. However, e-commerce sellers can’t compromise on their ‘return policy’ as a favorite return policy boost loyalty.
How Can ebs Help You?
E-commerce players need to know the challenges early and deal with them properly to ensure the success of the business in the UAE. You can find out the challenges of e-commerce accounting with our help. We will provide you with proper assistance on how to solve the challenges in your e-commerce business.
Our team of experts will help you know the market condition and how your business problems can be sorted. Our aim is to help businesses grow in the market bearing fewer losses. ebs likewise offer services, such as accounting and bookkeeping services, VAT services, Auditing, Due Diligence audit services, and many more.
Feel free to contact us with any additional inquiries or requests for accounting services. A free discussion will be given to you by our specialists, who will answer your request immediately.