New survey results are revealing the impact of ecommerce transaction accounting processes on businesses. The survey included nearly 700 US businesses across small, midmarket, and enterprise-sized sectors in retail, restaurant, nonprofit, and accounting industries.
The survey (download the part 1 report here) conducted by marketing strategist Paradoxes, Inc. focused on companies deploying e-commerce solutions. What did they find?
- Ecommerce platforms have increased manual bookkeeping work for three-quarters of businesses, with companies estimating that these extra processing steps cost them 5-7 staff days each month.
- Due to growing stress from e-commerce accounting complexities, one-third of all businesses now outsource their bookkeeping.
- Every month, 45% of organizations must manually adjust ecommerce payment data, and a similar number must run manual reports for each ecommerce platform.
- Two out of every five survey respondents indicated they have to manually reorganize or recalculate sales expenses, taxes, or other things on a monthly basis, as well as manually re-enter revised totals as journal entries into their accounting platforms.
- Businesses of all sizes are upset by data inconsistencies and reporting cycle variances among ecommerce platforms, and they have little faith that ecommerce interfaces will reliably input data into their accounting systems.
These results may not be a surprise to you if you have ecommerce clients. You know ecommerce involves highly challenging accounting processes, often requiring manual calculations and tasks. And if accounting professionals like you are frustrated with the manual processes you complete to process your clients' work, what about the ecommerce business teams themselves?
“The new reality of (ecommerce) accounting requires additional hours of manual work – up to 60 hours each month, according to our survey – to capture and process data properly into accounting systems. Not only is this contributing to high burnout in the industry, but it’s costing businesses thousands of dollars in lost staff time and revenue each month,” said Jason Richelson, CEO & Co-founder of Bookkeep.
Here are some questions to ask yourself if you have ecommerce clients.
1. How many staff hours does each client spend weekly on manually processing ecommerce transaction accounting?
2. What is the cost of this manual work to your clients?
3. How many staff hours do you and your team members spend weekly on manually processing ecommerce transaction accounting?
4. What is the cost of this manual work to your practice?
“While the majority of business leaders surveyed said they measure losses due to manual work, still one-third said they aren’t tracking and examining these costs – which is concerning,” said Eric Jepsky, Chief Revenue Officer at Bookkeep. “Sticking with the status quo and relying on legacy systems is no longer an effective approach to accounting, and there are alternative solutions beyond offshoring that are more affordable and empowering to your staff. With the right automation, the challenges of proper revenue reporting and payment reconciliation can be eliminated.”
More information about the economic impact of ecommerce transactions on the accounting industry with insight into practices, perspectives, and priorities of accounting firms will be coming in part 2 of the survey commissioned by Bookkeep. Make sure you are subscribed to The Woodard Report for this information!
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