Inventory management and eCommerce accounting can be very challenging for small business owners. Tracking products by using a spreadsheet usually suffices at first but can become burdensome as your business grows. As experienced eCommerce accountants, Basis 365 recommends DEAR Systems because it provides several advantages over tracking inventory using spreadsheets.
Are you interested in learning more? Here are five essential features of DEAR explained.
Did you know DEAR can create purchase orders? The POs can be for components or finished goods and can be emailed from DEAR to the supplier. There is also a receiving function in DEAR that adds the goods’ cost to the inventory balance. If components are purchased, the cost can be determined in the program. DEAR calculates the average unit cost throughout the purchase/assembly cycle, so that cost of goods sold is accurate when a product is sold.
Supplier invoices can be processed in DEAR by your eCommerce accountant. They are matched to open POs, and any quantity or unit cost adjustments can be made. At this time, any additional shipping costs, duties, etc., can also be added to the purchase. These additional costs increase the total purchase and equate to the landed cost of the purchased goods.
The final step in the supplier invoice process is payment. The order in DEAR will show as unpaid until payment is made. Once the payment is recorded, the purchase is marked complete.
DEAR has filters so that the status of all purchases can be tracked. The most common states that a purchase may be in are, ordered, pending fulfillment, pending payment.
3.Inventory Control and Sales
eCommerce businesses usually sell their products in multiple ways, and inventory may be located in several different places. Some may be at an Amazon warehouse because FBA is used. A local storage site or 3PL may also hold inventory. DEAR can provide inventory levels at each separate location. The number of units available and their cost is easily accessible.
Sales are either processed manually or fed in automatically and reduced the inventory at the applicable location. If sufficient inventory is not available at a given location, DEAR will prevent the sale from completing. A business owner or eCommerce accountant can easily transfer inventory between locations. Once there is enough inventory, a sale can be completed.
Shipping charges and sales tax can be added to a sales order. DEAR also has a customer database that allows for quicker processing of repeat customers.
DEAR also has sales fulfillment and payment functionality so that the status of a sale is readily available. Sales orders and invoices can be emailed to a customer directly out of the system.
Key metrics, like top-selling SKUs and SKU profit margin, are readily available. DEAR has a customizable dashboard that allows business owners and eCommerce accountants to track key performance indicators
DEAR allows for manual processing, but a beneficial feature is the ability to integrate with other systems. Most importantly, DEAR can be connected to other large eCommerce systems. Amazon, eBay, Shopify, Woo Commerce, and Bigcommerce are just some of the sites. This integration allows sales to be automatically loaded into DEAR. As a result, the financial reporting discussed below is accurate and timely. Your eCommerce accountant can spend time reviewing financial statements instead of processing manual transactions.
Almost as important as linking to where your products are sold is connecting to your accounting system. DEAR integrates with both QuickBooks Online and Xero. Your eCommerce accountant can load purchases, sales, and adjustments, into your accounting system, with a click of a button.
There are other integrations made available by DEAR. These include shipping applications, payment processors, point of sale software, and tax management tools.
Accurate financial statements are critical for effective eCommerce accounting. Ending inventory amounts are reported on the balance sheet, and the cost of goods sold is reported on the income statement. All inventory purchases and sales can be processed in DEAR to obtain these amounts from the system quickly.
The Wrap Up
DEAR has good reporting capabilities. An eCommerce accountant can use the reports to ensure that the accounting system is in agreement with DEAR. If a difference is identified, it can be quickly corrected.
eCommerce accountants use DEAR to ensure that your financial statements are following generally accepted accounting principles and provide the information for your tax returns to be accurately prepared.
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Author Of this post: Paul Burke