Ditch Using a Spreadsheet For Your Business Financials Today - Case study On One Of Our Ecommerce Clients
The first steps to a healthy E-commerce business and healthy profits are a streamlined, digital finance system with the best suited sales platform.
But what does the term ‘E-Commerce’ mean? E-commerce, also known as electronic commerce or internet commerce, referring to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions.
There are several benefits of having an E-commerce business, ranging from the likes of reducing your costs to going global and better marketing opportunities. E-commerce has increasingly become a vital component of business strategy. The world is moving more and more into the digital realm every day. According to the marketing research firm Coleman Parkes, 21-40% of a business’ contributions are a direct result of E-commerce and that number is expected to grow rapidly over the coming years.
I was introduced to a client within the E-commerce sector who is the founder of a design studio, based in London. They work with and source natural materials which are then made into home and lifestyle products. They are currently using platforms to sell their goods. Such as popular and well-known platforms Etsy, Shopify, and Amazon. Before being introduced to this client, they managed their financials via a spreadsheet and referred to the sales platforms for their daily takings. They had no system in place to monitor their live data or their direct sales.
Due to this process, it was difficult for them to know what position the business was in, especially around their profits and cashflow. After meeting with the client, I realised that the main challenge was finding a compatible software which the client felt comfortable using and monitoring, as well as being the most appropriate software for the size of the business. Due to the finances being managed via a spreadsheet, I wanted to ensure the client felt comfortable in adopting new tech.
As well as that, I did not want the director of the company wearing too many hats, so I wanted to ensure that the system was streamlined as possible and that we here at Raffingers were introducing as many solutions and assisting in certain areas as much as we can.
So, what was my decided solution? Based on the requirements of our client, I felt it was in the company's benefit to move to the cloud-accounting software Xero, to manage the monthly bookkeeping, whilst being MTD compliant and submitting the quarterly VAT returns via the platform. Alongside this, we have integrated Dext Commerce. Dext Commerce integrates with selling platforms such as Etsy, Shopify, and Amazon, and pulls through the sales from each platform and sends them to the specific accounting software, which in this case, is Xero. This makes the system a lot more streamlined and efficient, as we can maintain a sales ledger, whilst accurate data is pulled through from the platform from totals to the correct VAT tax rates.
For the purchase side of the business, we are using Dext Prepare, which integrates with Xero and allows automatic expense reconciliation. The director can also take pictures of receipts whilst on the go and upload these for our review.
Invoices to direct companies also required raising. We decided it would be best to raise these invoices on Xero and send these out via the platform. This way, it meant we were able to have a central place, with systems talking to one another, to tackle all obstacles. Now that we have an efficient system in place, neither us nor our client are spending long hours preparing the VAT return or updating the bookkeeping on spreadsheets or using manual records.
We have a system in place which is accurate, streamlined and reflecting true, live data.
I have since spoken with the director, regarding the current system, and she has expressed how grateful she is that we are now assisting with the system and have streamlined it, allowing her to raise sales invoices easily and accessibly.