We know ecommerce accounting can be challenging, and quantitative research supports that fact. A recent survey of accounting firms shows just how bad it can be.
Not long ago, we reported on the impact of ecommerce transaction accounting processes on retail, restaurant, nonprofit, and accounting industries. The survey (download the part 1 report here) was conducted by marketing strategist Paradoxes, Inc. and included this drill down into the accounting industry. Here is what they learned.
You can access the full executive summary of part 2 here.
Ecommerce platforms challenge standard accounting processes.
The poll included individuals who perform ecommerce reconciliations themselves (67%) and those who supervise, review and approve the reconciliations (the other third). They reported that the volume of transactions, data inconsistencies, and reporting differences between ecommerce platforms force manual data entry.
Depending on the size of the practice, the added manual work translates into many hours each and every month. The individual team member handling ecommerce clients spends an average of 38 hours per month on manual labor. This amounts to around a fourth of their monthly time!
What are the most common manual accounting activities performed for ecommerce clients?
The most common manual activity is running manual monthly activity reports for each revenue source. A total of 82% of those polled reported that they must run these manual reports at least some of the time, and well over half report that they must run the reports all of the time.
More than a third of firms indicated that they needed to adjust data manually to associate product or SKU order details with the correct payments or dates. Nearly as many needed to manually calculate or process other details such as inventory information, promos, sales cost or taxes into standard journal entries.
Nearly 40% reported they needed to manually finalize ecommerce revenue and cost with revenue and cost data from other transactions.
How do some accounting firms manage the volume of data entry work?
Nearly half of the firms surveyed reported that they outsourced manual data entry support. The majority of respondents used a domestic outsourcing partner with just under 25% using an offshore partner.
Is ecommerce bookkeeping a strain on your firm?
Let us know! Please use the comment form at the bottom of this page to share your experience. Alternatively, feel free to email me to share your experience. I'm looking for feedback for a follow-up article.
- What percentage of your clients have ecommerce transactions? What manual tasks make your list of the most time-consuming tasks you do for your ecommerce clients?
- What percentage of the work that you do for ecommerce clients is manual work?
- Do you price clients who require manual work differently than clients who are more automated?