Accounting in e-commerce

Featured by Ben Richmond, Managing Director, North America, Xero

Ben Richmond, Xero’s managing director for North America, is responsible for driving Xero’s growth in the United States and Canada. In 2013, he joined Xero as Sales Director in New Zealand, where he led the company’s domestic growth and spearheaded Xero’s global agricultural strategy.

Q: What makes e-commerce accounting challenging?

AND E-commerce business and sales are growing rapidly, especially post-pandemic, and the upward trend is expected to continue indefinitely; As a result, more and more small businesses are using multiple platforms (e.g. Amazon and Shopify) to sell their products and expand their reach. As a result, there are more channels and more revenue streams to manage, so the backend and “books” become outdated more easily. A tool like Xero Inventory Plus will help reduce the manual workload that accountants and bookkeepers spend on reconciling inventory across multiple channels for multiple clients, freeing up time to focus on more strategic endeavors.

Q. What opportunities do accountants have to better serve their e-commerce clients?

AND Small e-commerce business customers often have larger revenue streams than the typical brick-and-mortar small business customer, and as a result, it is often more difficult for the former to understand what their cash flow is. This gives accountants the opportunity to take a deeper look at what is supporting and what is hurting their positive cash flow and can become more involved in strategic decisions about how to leverage growth. This is a key moment where accountants can step into the advisory role and play an integral role in their clients’ success.

Q: How can the right technology stack help e-commerce companies and their accountants?

AND One of the biggest challenges that accountants and bookkeepers face when dealing with e-commerce clients is having a single source of truth. Consider the following: A seemingly simple order requires a company to locate, pack, and ship a product, resulting in data that includes sales, taxes, inventory adjustments, and shipping costs. Accountants and bookkeepers often receive this data in multiple spreadsheets, sometimes in different formats and at inconsistent intervals. All this complexity may even discourage accountants from taking on such clients. The ability to manage all of these items in one system that brings it all together allows accountants to serve their clients more confidently and help them improve their processes. In addition to increasing efficiency, this can enable expansion into new services and revenue streams, supporting the sustainable development of the company.

Xero is a global small business platform with 3.95 million subscribers, including an entry-level accounting, payroll, people, expense and project management solution. Xero also has a robust ecosystem of connected applications and connections to banks and other financial institutions, helping small businesses access solutions from the Xero open platform to help them run their business and manage their finances.