Resolving E-Commerce issues

Case Study: Resolving E-commerce Issues

1. Introduction:

This case study outlines how an accounting firm, Numbers Matter Accounting & Bookkeeping LLC (NMAAB) improved financial processes, increased compliance, and enhanced operational effectiveness for E-Commerce Client ABC (actual name withheld for confidentiality reasons).

2. Client Background:

E-Commerce Client ABC is an online retail company specializing in consumer merchandise tied to social media or other media and entertainment industries. The company experienced rapid growth in recent years, leading to an increased volume of sales and financial transactions. However, the expansion placed significant strain on their accounting and financial operations, leading to various challenges.

3. Key Challenges:

3.1. Financial Management: E-Commerce Client ABC struggled with accurately tracking and managing financial transactions, such as sales, refunds, and inventory valuation. Their existing manual accounting processes were time-consuming and prone to errors, causing delays in financial reporting and decision-making.  When ABC engaged with NMAAB they had no financial reporting produced in over six months and did not have an easily reproducible, correct, and transparent way in which to recognize revenue, COGS or Inventory.

3.2. Tax Compliance: The company faced complexities in complying with tax regulations, including sales tax collection and remittance across different jurisdictions using Avalara.  While client used Avalara, they needed someone familiar with Avalara to ensure that software was running effectively.

3.3. Operational Efficiency: E-Commerce Client ABC encountered inefficiencies in their order fulfillment process, inventory management, and financial reconciliation. They needed a streamlined system to automate these processes, reducing errors, and improving overall operational efficiency.

4. Approach:

NMAAB collaborated closely with E-Commerce Client ABC to understand their e-commerce operations, financial systems, and pain points. Based on this analysis, the following steps were taken:

4.1. Accounting Data: NMAAB cleaned up the existing Quickbooks Online data so that it was correct.   There were substantial issues with the chart of accounts, balance sheet, etc. all of which were resolved.

4.2. Process Automation: Testing various process automation integrations for eventual process and KPI automation.

4.3. Tax Compliance Solution: NMAAB ensured compliance with completing Avalara setup.

5. Results and Benefits:

5.1. Improved Financial Management: With the implementation of the new accounting system, E-Commerce Client ABC gained real-time visibility into their financial transactions. Accurate and up-to-date financial reports allowed for informed decision-making and effective financial management.In addition, client identified key Key Performance Indicators (KPI) that they wanted to review on an ongoing basis.  In order to set up KPI reporting, NMAAB edited the inflow of financial data so that each client brand was able to be identified for revenue and cost.  In addition, KPI information was connected to the payroll systems allowing for cross-matrix KPI reporting on all key elements identified as important by the client.

5.2. Enhanced Tax Compliance: The sales tax automation solution reduced the risk of non-compliance and penalties for E-Commerce Client ABC. The system accurately calculated and recorded sales tax on each transaction, simplifying the tax remittance process across different jurisdictions.

5.3. Streamlined Operations: Process automation significantly improved operational efficiency for E-Commerce Client ABC. An integrated way to pull the data needed for accurate financials was introduced.

5.4. Time and Cost Savings: The implementation of the new accounting system and process automation saved E-Commerce Client ABC considerable time and effort. Manual data entry was eliminated, reducing the likelihood of errors and freeing up staff to focus on more value-added activities. This resulted in cost savings and improved overall productivity.

Conclusion: By leveraging advanced technology solutions and implementing process improvements, NMAAB successfully resolved e-commerce challenges for E-Commerce Client ABC.