3 Accounting Challenges the E-commerce Industry Faces

 

An accountant working on her laptop

Did you know that in 2021, the electronics e-commerce sector in Canada made the highest amount of sales at 27.38 percent? The lowest amount of sales was at about 2.08 percent.

Whether you understand these numbers or not, they wouldn’t have been possible to calculate without an accountant. Accounting is an important part of any business—without it, businesses might not stay afloat for too long. However, there are several accounting challenges that the e-commerce industry faces.

Learn more about them and how accounting for eCommerce businesses works.

Inventory Management

Inventory management can be tricky for small and big business owners alike. We wish it was as simple as selling brownies at our school’s bake sale; all you needed was a notebook to track your orders, sales, and stock items. However, in the practical world, inventory management is a lot more complex.

There is so much that goes on when managing an inventory. From tracking the number of items to calculating their worth, it’s quite a task. Moreover, you need to be aware of all the locations your items are at. That isn’t all; your inventory’s status also changes every time there’s a sale or return of a product.

Tracking Seller Fees

As an e-commerce business owner, you must be familiar with platforms such as Amazon eBay, Etsy, and more. Most such platforms will need a monthly seller fee from you, making it difficult to track other fees. The fee structure of these platforms is enough to throw you off. For instance, Amazon requires listing, advertising, and transaction details to confirm orders.

While this all might seem like just a few steps, there's a lot more. The fee charges depend on the products, their type, size, weight, and other factors for shipping. In the end, these charges come under “Amazon Fees." This can be quite a lot for online sellers, but the help of online bookkeeping services can make it easier.

Managing Returns

Tracking returns can be inconvenient for e-commerce businesses. Nearly all sellers have return policies that allow customers to return items that are damaged, incorrect, or don't fit. This is also a great and proven way to increase loyalty and conversions for a brand.

However, handling returns can be a hassle for the e-commerce industry. The best way to handle returns is to be very careful while handling everything. Whether it’s writing off or adding items to the inventory, everything needs to be recorded. This is to avoid mistakes that can make the process harder for you. 

An accountant counting money

Summing It Up

The e-commerce industry faces many accounting challenges. However, with the aid of a professional accounting and bookkeeping service, it can be a breeze to do. Accounting Plus provides professional accounting and tax services in Canada. If you’re searching for expert online bookkeeping services in Toronto, get in touch with them now.


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